Riding a big wave of stay-at-home streaming usage, Roku boosted revenue in the fourth quarter 58%, to a record $649.9 million — and posted a $65.2 million net profit for the quarter, whereas Wall Street had expected a loss.
The company already announced last month that it ended 2020 with 51.2 million active accounts, up 39% year over year, and that the ad-supported Roku Channel more than doubled its audience to reach U.S. households with an estimated 61.8 million people in Q4.
Analysts on average expected Roku to post revenue of $617.7 million and a loss of 5 cents per share for Q4, according to research firm Refinitiv. Roku’s stock, which has increased more than 42% year to date, was up more than 3% in after-hours trading Thursday.
Driving Roku’s topline growth was its platform business, which increased revenue 81% during the quarter to $471.2 million. The platform segment encompasses the company’s advertising and subscription/transactional businesses, and Roku said monetized video ad impressions more than doubled in Q4 year-over-year with the ongoing shift of audiences from pay TV to streaming.
“It was all aspects of the company hitting at once,” Scott Rosenberg, SVP and GM of Roku’s platform business, said about the better-than-expects Q4 results in an interview with reporters.
For the full year, streaming hours on Roku hit a record 58.7 billion, increased by 55%. In Q4, streaming hours by Roku users hit an all-time high of 17 billion hours (also up 55%).
Last month, as part of bulking up its free, ad-supported Roku Channel lineup, the company inked a deal to acquire global rights to more than 75 of Quibi’s original shows. That came after the startup led by Jeffrey Katzenberg and Meg Whitman folded six months after launch. Roku says it plans to add the Quibi shows, representing several hundred hours of content, on the Roku Channel in 2021. The company paid “significantly” less than $100 million under the deal with Quibi, a source familiar with the deal said.
In discussing Q4 earnings, Roku execs didn’t provide an update on when the Quibi content would be released.
“We think the Quibi content will perform well, but we’ve added a significant amount of content” to the Roku Channel from other partners in the past several months, Rosenberg said, including Disney, NBCUniversal, A+E Networks and Discovery.
For the current quarter, Roku expects continued revenue growth, projecting $478 million to $493 million in revenue for Q1 2021 (up 49%-54%). It expects a net loss of $16 million to $23 million for Q1.
Given the burst in streaming activity Roku saw in the second half of 2020, Roku cautioned that growth for the full year 2021 will fall below levels it expects to see in the first and second quarters of 2021.
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