Roku Hits 53.6M Active Accounts In Q1, Smashing Financial Forecasts

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Roku kept rolling in the first quarter, reporting a 35% rise in active accounts, to 53.6 million, along with stronger-than-expected financial results.

Revenue grew 79% compared with the same quarter a year ago, hitting $574.2 million, far higher than the consensus forecast by Wall Street analysts for $490.6 million.

Expected by analysts to lose money in the quarter, as it did a year ago with $55.2 million in red ink, Roku instead swung to a profit, with operating income of $75.8 million. On an adjusted EBITDA soared above estimates to $125.9 million.

While active accounts increased, the number of additions was lower in the first quarter than in recent quarters. During a call with the press prior to the company’s quarterly call with analysts, CFO Steve Louden said comparison between the fourth quarter of one year and the first quarter of the next is difficult because of the holidays. “Q1 is usually significantly slower,” he said.

The other variable, Louden said, is the coronavirus pandemic, which hit the company’s core U.S. business toward the end of the first quarter in 2020. Going back to the first quarter of 2019, he said, account growth was less than half the 2.4 million additions of the current-year first quarter, indicating no slowdown, in the company’s view.

Total streaming on Roku devices came in at 18.3 billion hours, an increase of 49% year-over-year. Average revenue per user reached $32.14, up 32%.

Advertising continues to be a strong suit for Roku. The company said 85% of the audience reach to viewers aged 18 to 49 on the Roku Channel was unduplicated with traditional TV. The company has been making its presence increasingly felt in the ad business in recent months. Roku delivered a virtual presentation to ad buyers earlier this week at the NewFronts. In recent months, it has bought Nielsen’s advanced video advertising business and acquired original programming from Quibi and the producer of home-improvement mainstay This Old House.

While the Roku Channel is a gateway for 50 subscription streaming services, its main offerings are free and ad supported. By adding a steady supply of originals, the company sees potential to benefit from an ongoing shift of ad dollars from traditional linear TV to streaming.

The company does not break out advertising as its own category but platform revenue, which includes ads, doubled from a year ago to $466.5 million.

Roku, which has recently become the leading streaming provider in the U.S. Befitting that status, it has had tension with distribution partners at times, the latest being YouTube. It recently removed Google-owned YouTube TV from its channel store, which prevents new customers from activating subscriptions but allows existing ones to access their bundles. Asked about the situation, which spilled into public view about 10 days ago, Scott Rosenberg, SVP and GM of the company’s platform business, said he didn’t have an update.

“I don’t have anything new to provide,” he said, pointing to previous arguments from Roku that the company is objecting with Google over data, not dollars. Roku maintains that Google has manipulated search results and sought to control user data and Roku had made its preferences known when it comes to a renewal of the distribution agreement. “We’re working to resolve this in a positive way for Roku and Google and, ultimately, for consumers,” he said.

This article was printed from https://deadline.com/2021/05/roku-hits-53-6m-active-accounts-in-q1-smashing-financial-forecasts-1234751276/