Roku revenues beat estimates as company promises action on costs

Roku Anthony Wood

Roku Anthony Wood

Streaming platform Roku has surprised analysts by beating revenues estimate for Q4, 2022. Revenues were only up marginally to $867.1 million year on year, but this is well ahead of the $803m that the market had been anticipating. Broken down, revenues comprised $731.3m from platforms and $135.8m from devices.

Other positives included a rise in active users to 70m, and an increase in streaming hours of 23% to 23.9bn for the quarter in question. For the whole of 2022, Roku streaming hours were up 19% to 87.4bn. Less welcome was an increase in costs, which led the company to report an increased operating loss of around $250m.

Roku’s share price responded positively to the results and the management has maintained an upbeat tone. In a stamen, the company said: “Despite tightening budgets, ad spend on the Roku platform outperformed the overall ad market.”

Looking ahead, the company said ad spend in verticals such as restaurants, travel, consumer packaged goods, and health and wellness appear to be improving in Q1, 2023. However, other verticals including financial services are under pressure.

On costs, Roku said it is committed to getting these under control. “We plan to improve our operating expense profile to better manage through the challenging macro environment, while building on our platform’s monetisation and engagement tools and partnerships,” said CEO Anthony Wood and chief financial officer Steve Louden. “Through a combination of operating expense control and revenue growth, we are committed to a path that delivers positive adjusted EBITDA for full year 2024.”

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