Roku announced the addition of 1.8 million active users in the second quarter, upping its U.S.-leading base of connected TV customers to 63.1 million.
The figure represented re-accelerated growth for Roku, which only added 1.2 million active users in the first quarter and 1.5 million in the second quarter of 2021. Roku attributed that spry growth to improved smart TV shipments and pricing.
Roku also saw its advertising revenue grow by 4% sequentially, and 26% year over year, to $673.2 million, partially driven by record upfront commitments that exceeded $1 billion.
Also read: Roku Drew Record $1 Billion In ad Commitments in Upfront
Roku reported 21% year-over-year growth in average revenue per user, with that figure reaching a record $44.10.
There's the good news. Pretty much all of it.
Roku also reported a narrow decline in the number of hours its users spent on its platform -- the first time we've ever seen that -- and the streaming company fell short of the consensus forecasts conjured by TMT equity analysts, particularly in the area of ad-driven platform revenue. Roku projected only weak platform revenue growth to $700 million for the third quarter, for example (it's all in the pullout chart from the shareholders letter at the bottom of this story).
Indeed, with Roku caught off-guard and comparing the suddenly stalled TV ad market to the early pandemic days of 2020, the after-hours trading picture was nothing like the redemptive narrative experienced by Netflix last week.
Roku stock was down another 25-plus percentage points in after-hours trading, as denizens of the Wall Street casino again look at the company that makes most of the gadgets we use to stream video in the U.S., while arbitrating many of the advanced ads we see on those devices, and says, "meh."
Before the latest after-hours bloodbath on the Nasdaq, Roku stock closed normal trading Thursday at around $85 a share. It was priced at just over $428 a share at its zenith exactly a year ago. At the time, the streaming company had 8 million fewer active users and generated $120 million less in total quarterly revenue.
“There was a significant slowdown in TV advertising spend due to the macro-economic environment, which pressured our platform revenue growth,” Roku executives said in a letter to shareholders. “Consumers began to moderate discretionary spend, and advertisers significantly curtailed spend in the ad scatter market (TV ads bought during the quarter). We expect these challenges to continue in the near term as economic concerns pressure markets worldwide.”
Assessing the damage, Insider Intelligence analyst Ross Benes said, “These signs indicate that exuberance over streaming video advertising is tamping down due to challenging economic conditions."
Roku reported a net loss of $112.3 million in Q2 compared with a net loss of $149.8 million in the same quarter last year. It lost $22 million selling gadgets vs. $6.7 million in Q2 2021. ■
