Roku Stock Falls After Slight Q3 Revenue Miss, But Per-User Proceeds, Active Accounts & Other Metrics Keep Climbing


Roku stock dropped sharply in after-hours trading after the company reported third-quarter revenue that fell just short of Wall Street analysts’ consensus estimate.

Revenue of $680 million missed the Street number by a bit more than $3 million. On the bottom line, though, earnings per share of 48 cents far outpaced the estimate of six cents.

Shares in Roku fell almost 9% to about $287 after hours. They had ended the regular trading day at around break-even at $313.66.

Results across the board were healthy for Roku, which reached 56.4 million active accounts, up 1.3 million from the year-earlier quarter.

Other highlights in the quarter included an 82% jump in platform revenue (a category that includes advertising) to $582.5 million. Average revenue per users, or ARPU, a key metric in streaming, grew 49% to reach $40 on a trailing 12-month basis. Overall streaming hours increased 21% to 18 billion hours in the period.

On the downside, supply chain issues contributed to a 26% player revenue slide, as the current-year quarter faced a tough comparison with pandemic-driven demand in 2020.

In its quarterly letter to shareholders, the company warned of potential bumps during the holiday period.

“The challenges created by the global supply chain disruptions will likely continue into 2022,” the letter said. “These headwinds may have a broad impact on the holiday season in terms of consumer confidence, product pricing and availability, and advertising spend levels.”

Covid-19 has had “different impacts on different parts of our business,” the letter continued, but “the secular shift to streaming remains intact.” In the fourth quarter, the company expects revenue of $893 million at the midpoint, up 37% year-over-year, and total gross profit of $385 million, up 26% year-over-year.

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