Roku exceeded its third quarter revenue and profit outlook, driven by continued strength in its advertising business and better-than-expected demand for its streaming players.
Adjusted EBITDA of US$2.0 million and a net loss of US$9.5 million were also ahead of Roku’s outlook, with the company noting that “operating trends remain strong”.
The company ended Q3 with 23.8 million active accounts, up 43% year-on-year, with more than half of new accounts coming from licensed sources, primarily Roku TVs. User engagement also increased during the quarter with users streaming 6.2 billion hours, up 63% year-on-year.
Platform revenue represented 58% of total revenue compared 46% a year ago, with more than two-thirds coming from advertising services such as video ads, audience development and brand sponsorship on the Roku user interface.
Streaming player revenue increased 9% year-over-year, driven by 15% unit growth, offset in part by a 5% decrease in average sales price. Demand for Roku’s low-priced players remained robust.
“Based on our strong Q3 results and slightly higher expectations for Q4 revenue, we are again raising our full-year 2018 outlook,” said the company in its letter to shareholders.
“We now see full-year revenue growth of 42% year-over-year at the midpoint, up from 40% year-over-year provided last quarter and from 31% year-over-year when we provided our outlook at the beginning of 2018.
“We are also raising our full-year gross profit outlook growth to 63% year-over-year, up from 61% previously and from 43% year-over-year when we provided our outlook at the beginning of 2018.”