Roku reported a wider net loss as the COVID-19 pandemic had more people streaming for more hours.
The company’s loss was $43.1 million, or 35 cents a share, compared with a $9.3 million loss, or 8 cents a share a year ago.
Revenue grew 42% to $356.1 million as advertisers invested in connected TV. Average revenue per subscriber rose 18% to $24.92.
“As economic pressures caused advertisers to further re-evaluate how much and where to invest media dollars, Roku delivered strong growth in our ad business, particularly relative to the overall TV ad market that was down,” the company said in a letter to shareholders.
The company said its active account grew 41% from a year ago to 43 million, the biggest net increase outside of a fourth quarter holiday period.
Streaming hours grew 65% to 14.6 billion.
Roku announced that Steve Louden will remain the company’s CFO. Last December, Louden announced plans to relocate and leave the company. The company has decided that he can do the job from Seattle.
The company saw increases in revenue in both its platform business and its player business. Platform revenues were up 46% to $244.8 million and player revenue was up 35% to $111.3 million.
“Demand for our players increased following the start of shelter-at-home orders in mid-March. Despite the pandemic’s adverse impact on global supply chains, we have largely managed to keep our products in stock, albeit with a greater use of air freight than originally planned. Due to strong demand and tight inventory levels of certain products, we ran fewer promotions than we normally would which benefited player margins,” the company said.
At the same time streaming hours were going up, Roku was seeking more demand for advertising on its platform. Monetized video impressions grew 50% year over year. First time ad clients were up 40% in the quarter from a year ago and in the first half of 2020, Roku retained 92% of advertising clients that spent $1 million or more in the first half of 2019.
Direct response advertisers using Roku’s new performance advertising business grew 346%, with many of those advertisers cutting back on social media spending.
Roku also said that some programmers increased marketing investments aimed at Roku users. It pointed to fuboTV, which promoted itself as a cable replacement for sports fans. From June to July, new monthly sign ups more than doubled for fuboTV, with 50% attributable to promotional spending on the Roku platform.
Looking ahead, the company said it believes overall revenue will grow “substantially” in the second half and for the full-year 2020, although not as strongly as they had anticipated prior to the pandemic.
“Given the size of the streaming opportunity, we remain committed to our strategic investment areas and are continuing to hire, albeit at a slower pace than pre-COVID-19 levels. We plan to continue to monitor the trajectory of the business, and prudently manage expenses and capital expenditures. This approach of investing to enhance our competitive advantages and future growth while managing through external headwinds will likely mean that we run at an adjusted EBITDA loss for the year,” the company said.
