Roku Q3: Revenue Up 51%, Hits 56.4 Million Active Accounts – Variety

roku grew total net income 51% year-over-year to $680 million for the third quarter of 2021, but it was lighter than investors expected, with the company warning that ongoing supply chain issues , which is expected to extend into 2022, could have a “broad” negative impact on fourth-quarter results.

The streaming platform’s active accounts hit 56.4 million, a net increase of 1.3 million active accounts from the previous quarter, an even bigger slowdown from Q2 2021, when it scored 1 .5 million. Roku said the slower account growth was the result of supply chain disruptions in the US. uu. market, and that specifically US total. TV sales in the third quarter fell below 2019 (pre-covid) levels.

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Total streaming hours were 18 billion, a slight increase (by 700 million hours) from the second quarter. roku reported net income of $68.9 million (versus $12.9 million in the prior year quarter), which translates to 48 cents per diluted share.

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roku shares fell more than 8% in after-hours trading due to lost revenue.

Investors also reacted to roku’s comment in its letter to shareholders that “our business fundamentals remain strong, but we are aware that the challenges created by global supply chain disruptions are likely to continue into 2022.” In addition, the company warned that “these headwinds may have a broad impact on the holiday season in terms of consumer confidence, product prices and availability, and levels of investment in advertising.”

On average, Wall Street analysts forecast revenue of $683.36 million and EPS of 6 cents, according to Refinitiv data. Roku’s previous guidance for Q3 fixed revenue was $675 million to $685 million.

The company touted growth in its platform segment in the third quarter, even with a difficult year-over-year comparison: platform revenue rose 82% to $583 million, “reflecting significant contributions from both content distribution as well as advertising activities,” Roku said. in the earnings announcement. average revenue per user reached $40.10 (in the last 12 months), an increase of almost 50% year over year.

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“While the pandemic has had different impacts on different parts of our business, the secular shift to streaming remains intact,” CEO Anthony Wood and CFO Steve Louden wrote in the letter to shareholders.

roku’s fourth quarter outlook is for total net income of $893 million at the midpoint (which would represent a 37% year-over-year increase) and total gross profit of $385 million at the midpoint (an 26% year-over-year increase).

In 2021, viewing on the roku channel soared thanks to the company’s growing lineup of original and exclusive content, but the company did not provide an update on the roku channel’s domestic reach for Q3. Roku’s original content list includes the 75-plus shows it acquired from the now-defunct Quibi and “This Old House.” Roku’s recent opportunistic content deals include the feature film “Zoey’s Extraordinary Christmas,” set to premiere on the Roku Channel on December 1. 1, based on the canceled nbc musical comedy series “zoey’s extraordinaire playlist”.

Meanwhile, Roku remains at an impasse with Google over YouTube’s distribution on the streaming platform. According to Google, unless an agreement is reached, YouTube will no longer be available on new Roku devices starting in December. 9. Roku has complained that Google is making anti-competitive demands, including preferring YouTube search results. When asked on the third-quarter analyst call about the talks with Google, Scott Roku, senior vice president of Roku’s platform business, said he didn’t have an update but said the company wants to resolve the disagreement “in a make it a positive for roku and our customers.”

rosenberg also said that changes in the online advertising market that are affecting the ability to track consumers, such as apple’s ios 14.5 update that requires subscription for ad tracking, work in roku’s favor because the company uses its own proprietary data to serve connected TV ads.

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