The streaming media leader remains a divisive investment.Roku (ROKU 2.25%) minted a lot of millionaires in its first four years as a public company. The streaming device and software maker went public at $14 on Sept. 28, 2017, and it soared 3,325% to its all-time high of $479.50 on July 26, 2021. A $30,000 investment in its IPO would have blossomed to $1.03 million.But today, Roku only trades at about $64. That same investment would have withered to roughly $137,000 as the company disappointed its investors ...

Shares of the streaming company are down 25% this year.After trading above $470 per share back in 2021, Roku (ROKU 5.63%) stock eventually lost over 90% of its value, and it has continued to struggle to reignite investor enthusiasm. And things got worse last week after the stock plunged following the streaming platform's third-quarter results.The latest sell-off has left its shares down 25% year to date. Let's take a closer look at the company's report to see if this is a buying opportunity or if investors ...

Earnings season is now in full swing, and over the past few quarters, that has proven to be a downside catalyst for Roku (NASDAQ: ROKU ), where investors can never really wrap their heads aroundWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has ...

The company is putting up strong growth, but is weighed down by poor profit figures.Roku (ROKU 2.53%) is a peculiar company. It is a streaming TV platform, a sector littered by big technology companies with close to unlimited budgets. And yet, Roku is the market share leader in the United States and increasingly growing in international markets such as Mexico. The company had no right to win in streaming, but today has 85.5 million streaming TV households playing 32 billion video hours a quarter.The stock h ...

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Core Viewpoint - Roku's stock experienced a significant decline despite reporting strong third-quarter earnings, which may present a buying opportunity for investors [1]. Financial Performance - Roku reported a 16% year-over-year revenue increase, reaching $1.06 billion [2]. - Gross profit rose by 30%, and adjusted EBITDA more than doubled, with all metrics surpassing Roku's guidance and Wall Street's consensus estimates [2]. Growth Concerns - Although the headline numbers were strong, there are concerns regarding the platform division's growth, which is expected to slow from 15% to 14% year-over-year [3]. - Roku will cease reporting certain business metrics starting in Q1 2025, raising concerns about financial transparency [3]. Stock Performance Context - Prior to the earnings report, Roku's stock had gained 35% over three months, but the recent drop resulted in a 6% return over the same period, aligning with the S&P 500 index [4]. Misinterpretation of Growth Slowdown - The perceived slowdown in the platform segment may be misleading, as it outperformed expectations with a 15% sales increase instead of the anticipated 9% [5]. - The growth was attributed to improved ad profitability on the Roku home screen and higher-than-expected streaming subscriptions through Roku's payment platform [6]. Investment Outlook - The recent price drop may present an opportunity to increase investment in Roku, as the business appears to be performing better than anticipated [7].

Roku (ROKU) reported third-quarter 2024 loss of 6 cents per share, narrower than the Zacks Consensus Estimate of a loss of 35 cents. The company had incurred a loss of $2.33 per share in the year-ago quarter.Revenues increased 16.47% from the year-ago quarter’s level to $1.062 billion and beat the consensus mark by 4.37%. Growth of The Roku Channel’s streaming households and streaming hours drove third-quarter performance. Roku’s streaming households and streaming hours grew 13% and 20%, respectively, year ...

Financial Data and Key Metrics - Total net revenue reached $1.06 billion, up 16% YoY, marking the first quarter with over $1 billion in revenue [6][10] - Platform revenue grew 15% YoY to $908 million, driven by streaming services distribution and advertising activities [10] - Devices revenue increased 23% YoY, driven by the expansion of Roku-branded TVs [11] - Gross profit was $480 million, up 30% YoY, with a total gross margin of 45%, up 480 basis points YoY [13] - Adjusted EBITDA was $98 million, significantly above expectations, driven by the Platform segment [14] - Free Cash Flow was $157 million on a trailing 12-month basis, with $2.1 billion in cash at the end of the quarter [14] Business Line Performance - Streaming Hours increased 20% YoY, with 4.1 hours per Streaming Household per day, up from 3.9 hours in the year-ago period [10] - The Roku Channel was the 3 app on the platform by reach and engagement, with Streaming Hours up 80% YoY [6] - Advertising outperformed expectations, particularly in Political advertising, with early positive impacts from integration with The Trade Desk [11] - Roku-billed subscriptions grew, with the Olympic Zone driving significant Peacock signups through Roku Pay [23] Market Performance - Roku OS remained the 1 selling TV OS in the U.S., Canada, and Mexico [6] - International markets are growing, with Mexico being one of the fastest-growing countries, though monetization is still in early stages [12][26] - U.S. ARPU continued to grow, but total ARPU remained flat at $41.10 due to the mix of international Streaming Households [25] Strategy and Industry Competition - The company is focused on growing Platform revenue through Home Screen innovation, deeper third-party platform integrations, and Roku-billed subscriptions [7][8] - Roku is deepening relationships with third-party platforms like The Trade Desk to better serve advertisers' programmatic needs [8][41] - The company is investing in international expansion, with a goal of reaching 100 million Streaming Households in the next 12-18 months [24][112] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to drive Platform revenue and free cash flow growth, despite challenges in the M&E (Media & Entertainment) advertising market [19][129] - The company expects Q4 total net revenue of $1.14 billion, with Platform revenue growing 14% YoY and Devices revenue growing 25% YoY [15][16] - Adjusted EBITDA for Q4 is expected to be $30 million, with full-year 2024 adjusted EBITDA projected at $213 million [18] Other Important Information - The company removed Streaming Households as a key performance metric, focusing instead on Streaming Hours, Platform revenue, Adjusted EBITDA, and Free Cash Flow [24][27] - Roku is exploring new ad products, including Home Screen video advertising, which is currently in beta and expected to go GA in Q4 [42][43] Q&A Session Summary Question: Drivers of Platform revenue acceleration and rationale for removing Streaming Households as a KPI [20] - Platform revenue growth was driven by deeper third-party integrations, Home Screen innovation, and subscription growth [21][22] - Streaming Households were removed as a KPI because they no longer represent Platform revenue growth, especially with international markets at different stages of monetization [24][25] Question: Outlook for growth acceleration in 2025 and OpEx investment [31] - Growth in 2025 may not accelerate in all quarters due to comps from price increases and political spend, but the company remains optimistic [33][34] - OpEx is expected to grow modestly in 2025, with a focus on high-impact projects and operational discipline [35][36] Question: Impact of Trade Desk integration and Home Screen video advertising [39] - The Trade Desk integration is showing early positive impacts, with growth in advertiser types and share of wallet [40][41] - Home Screen video advertising is a significant opportunity, with new ad units and zones being tested [42][43] Question: Connected TV CPM pressure and Generative AI integration [49] - Roku is not significantly impacted by CPM pressure due to its diversified revenue streams and unique ad products [51][52] - Generative AI is being explored for self-service ad platforms, with the recent launch of Roku Ad Manager targeting small and medium businesses [56][57] Question: Fill rates and CPM guardrails with third-party DSPs [61] - There is no correlation between DSP integration and margin degradation, with opportunities to price across the value chain [62][63] Question: Investment priorities for the next 12 months [68] - Investments are focused on platform monetization, international expansion, and improving the subscription journey [69][70] - Original content is not a significant cost driver, as most content is variable-based [73] Question: Distribution of The Roku Channel on non-Roku devices [77] - The Roku Channel is available on non-Roku devices but is more profitable on the Roku platform [79] Question: Outlook for 2025 revenue growth and gross margins [84] - The company expects strong growth in 2025 but is cautious about acceleration due to comps from political spend and price increases [87][88] - Platform gross margins are expected to remain consistent with 2024, around 52%, excluding 606 adjustments [89][90] Question: Drivers of Q4 platform revenue deceleration and Home Screen monetization [93] - Q4 deceleration is due to political spend being concentrated in October and 606 adjustments in Q3 [95] - Home Screen monetization is expected to grow, with video ads and non-M&E brand advertising driving revenue [96][99] Question: OpEx growth and margin targets for 2025 [101] - OpEx growth is expected to be modest, with mid-single-digit increases, while maintaining investment in key initiatives [102] Question: Exposure to specific streaming services and international expansion [105] - Roku is a large distributor for all major streaming services, with no single service driving outsized impact [106] - International expansion is progressing well, with strong growth in Mexico and Canada, and scale-building in other markets [108][110] Question: Political ad revenue contribution and SSD headwinds in Q4 [125] - Political ad revenue exceeded expectations in Q3 but is factored into Q4 guidance, with only one month of political spend in Q4 [126] - SSD headwinds are not significant, with brand advertising ex-M&E continuing to accelerate [127] Question: Impact of M&E and auto ad verticals from strikes [125] - M&E remains a challenging vertical, but Roku is well-positioned to benefit from any recovery in the sector [128][130]

For the quarter ended September 2024, Roku (ROKU) reported revenue of $1.06 billion, up 16.5% over the same period last year. EPS came in at -$0.06, compared to -$2.33 in the year-ago quarter. The reported revenue represents a surprise of +4.37% over the Zacks Consensus Estimate of $1.02 billion. With the consensus EPS estimate being -$0.35, the EPS surprise was +82.86%. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street ex ...

Roku (ROKU) came out with a quarterly loss of $0.06 per share versus the Zacks Consensus Estimate of a loss of $0.35. This compares to loss of $2.33 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 82.86%. A quarter ago, it was expected that this video streaming company would post a loss of $0.45 per share when it actually produced a loss of $0.24, delivering a surprise of 46.67%.Over the last four quarters, the company has sur ...