Roku(US:ROKU)2021-08-05 04:03Financial Data and Key Metrics Changes - Roku reported total Q2 revenue of $645.1 million, an increase of 81% year-over-year, with platform segment revenue up 117% year-over-year to $532.3 million, representing 83% of total revenue [13][14] - Gross profit grew 130% year-over-year to $338.3 million, resulting in a gross margin of 52% [14] - Adjusted EBITDA for Q2 was $122.4 million, exceeding expectations [15] - Active accounts grew by 1.5 million in Q2, ending the quarter with 55.1 million [12][15] - ARPU (Average Revenue Per User) was $36.46 on a trailing 12-month basis, up 46% year-over-year [13][36] Business Line Data and Key Metrics Changes - Sales of player units were relatively flat year-over-year, with an average selling price decreasing by 2% year-over-year [13] - Roku users streamed 17.4 billion hours in the quarter, an increase of nearly 19% year-over-year [13] - Player gross margin was negative 6% due to global supply chain issues, while platform gross margin was 65% [14] Market Data and Key Metrics Changes - The company noted that the overall U.S. smart TV market is expected to shrink year-over-year as OEMs manage supply chain challenges [22] - Roku remains well-positioned to benefit from the long-term secular trends of audiences, content, and advertisers shifting to TV streaming globally [23] Company Strategy and Development Direction - Roku's strategy focuses on capitalizing on the shift to TV streaming, with significant investments in content distribution and advertising [9][17] - The company aims to enhance its platform's capabilities and expand its advertising tools to attract more advertisers [39][46] - Roku is also expanding internationally, with a focus on building active accounts and monetizing existing users [67] Management's Comments on Operating Environment and Future Outlook - Management acknowledged tough year-over-year comparisons due to pandemic-related outperformance in 2020 but remains optimistic about long-term growth driven by the shift to streaming [18][24] - The company expects robust growth in the platform business despite challenging comparisons in the second half of 2021 [20][24] - Management emphasized the importance of maintaining a strong market position as streaming ad spend increases [23] Other Important Information - Roku closed commitments with all seven major advertising agency holding companies during the recent upfronts, indicating strong advertiser interest [10][39] - The Roku Channel has seen significant growth, doubling streaming hours year-over-year and becoming a key driver of ad revenue [44] Q&A Session Summary Question: Can you unpack the drivers around ARPU growth in more detail? - Management indicated that ARPU growth is driven by strong platform revenue and increased interest from advertisers following viewers to streaming [36] Question: Could you provide context on The Roku Channel's impact? - The Roku Channel is performing well, doubling streaming hours year-over-year and serving as a significant source of ad inventory [44] Question: How does the company view its content strategy going forward? - Management plans to continue investing in both licensed content and originals, maintaining a balanced portfolio to support growth [54] Question: What is the impact of supply chain issues on active account growth? - Supply chain challenges are affecting player gross margins but are not expected to significantly impact active account growth [102]