Roku Ad Revenue Rises 82% in 3rd Quarter as Platform Adds 1.3 Million Accounts
Active accounts now total 56.4 million as growth slows down
Roku narrowly missed revenue expectations Wednesday as it reported a net revenue of $680 million for Q3.
The company added 1.3 million active accounts to total 56.4 million. Platform revenue mostly coming from ad sales increased 82% to $583 million, while net revenue spiked 51% year-over-year to $680 million, slightly missing analyst predictions by $3 million. Gross profit was up by 69% year-over-year to $364 million.
Roku reported earnings of 48 cents per share, easily beating analyst projects of 6 cents per share, but the company stock price dropped by 8.56% to $286.70 per share in early after-hours trading.
Analysts projected active accounts and revenue to rise, but at a slower growth rate after last year’s boost during the global pandemic.
A key metric for Roku is its active accounts, which gives investors an idea of the user base. Roku considers active accounts to be distinct user accounts that have streamed on its platform within the past 30 days. The company’s active accounts have grown rapidly in recent years — increasing from 19.3 million in 2017 to 51.2 million by 2020.
But the number of accounts is slowing down after the pandemic surge in the last year winds down. Analysts expected Roku’s active accounts to grow 23.3% in Q3, the slowest pace out of any quarter in the last four years. This growth had already been slowing down throughout Q2 when it added 1.5 million accounts. By comparison, it added 2.4 million new accounts in Q1 this year.
Driven by increased demand during the pandemic last year, Roku has recently been boosted by new streaming services — from Apple TV to Disney+ — that have added to the slate of apps on its channel offerings. Last quarter, Roku also started to roll out its slate of original content, following its acquisition of more than 75 shows and movies from Quibi earlier this year.
There are some other factors at play as Roku battles a recent dispute with YouTube. Roku contends that Google sought preferential treatment for its video platform, while Google said in October that Roku users could no longer download the YouTube apps on their streaming devices starting in December.
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