Roku shares rose (temporarily) in after-hours trading Thursday as the streaming company reported markedly better-than-expected revenue growth in the first quarter, with sales increasing by 19% to $881.5 million.
Equity analysts had forecasted revenue growth of only around 14.8%.
Active accounts (rechristened in Roku’s Q1 quarterly shareholder letter as ”streaming households“) rose by 1.6 million, reaching 81.6 million homes.
And engagement on the Roku platform rose 23% year over year to 30.8 billion streaming hours.
Roku reported a net loss of $65 million for the first quarter versus a $175 million loss from January to March 2023, but did report adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $30 million. It was the third consecutive quarter in which the company touted positive adjusted EBITDA and free cash flow.
"The biggest top-line driver here should be advertising revenue, which appears to have rebounded nicely in the first quarter, as subscription streaming distribution revenue decelerated," noted equity analyst Michael Nathanson.
As has often been the case with recent Roku earnings reports, solid growth data for revenue and active accounts is met with downer forward-looking guidance.
“Looking ahead, we face difficult year-over-year growth rate comparisons within streaming service distribution activities,” Roku CEO Anthony Wood and chief financial officer Dan Jedda wrote in Roku’s shareholder letter. “This headwind is due to past price increases and a higher mix shift toward ad-supported offerings. In Q2, we estimate total net revenue of $935 million, total gross profit of $410 million and Adjusted EBITDA of $30 million.”
Update: Shares were down more than 8% as of regular-day trading Friday.
