Roku Posts Mixed Q1 Financials And Modest Sequential Gain To 61.3M Active Accounts

Roku reported a 28% year-over-year upswing in revenue to $734 million, ahead of Wall Street forecasts, but narrowly missed analysts’ target for the bottom line.

Losses per share reached 19 cents on a diluted basis, compared with profit of 54 cents a year ago. Wall Street had expected a penny less at 18 cents.

Battered Roku shares, which have lost more than half their value in 2022 to date, fell double digits in after-hours trading before recovering to the break-even point. They had finished the regular trading day at $91.63, up 8%.

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The company added 1.1 million active accounts, reaching 61.3 million. Growth in that area has slowed significantly in recent quarters, adding to investor anxieties about supply chain and competition, though Roku remains a dominant gatekeeper in streaming. Yesterday, top cable and broadband providers Comcast and Charter announced a joint venture for a direct competitor to Roku based on Comcast’s Flex streaming offering.

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In its quarterly shareholder letter, Roku blamed the sluggish account figures on forces beyond its control.

“Account net adds moderated given the end of government stimulus payments that served to temporarily drive discretionary consumer spend in Q1 2021. Additionally, ongoing supply chain disruptions contributed to increased U.S. TV prices in Q1 2022, resulting in industry-wide TV unit sales that were below 2019 (pre-Covid) levels,” the letter said. “Our streaming player unit sales remained above 2019 (pre-Covid) levels but were down 12% year-over-year. Importantly, our strong and growing ARPU has allowed us to strategically prioritize account acquisition and insulate consumers from rising material and shipping costs in our player business.”

The letter went on to point to an event the company considers an important milestone: streaming surpassing linear viewing. It cited a Nielsen report about viewership in March that determined 65% of adults aged 18 to 49 used their TVs for streaming compared with 63% watching legacy pay-TV.

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