- Roku Inc. (ROKU) stock surged over 11% after hours following a better-than-expected Q4 earnings report, with a loss of $0.24 per share compared to the consensus of ($0.41), and revenue hitting $1.2 billion, up 22% year-over-year.
- Platform revenue increased by 18% to $3.5 billion, with gross profit up 19% to $1.8 billion, and Average Revenue Per User (ARPU) rising 4% to $41.49, showcasing strong monetization and platform growth.
- Roku’s guidance for Q1 and FY25 was in line with expectations, forecasting Q1 revenue at $1.005 billion and FY25 at $4.610 billion, with adjusted EBITDA projections of $55 million and $350 million respectively.
Roku Inc. (ROKU) shares soared over 11% to $87 p/sh in after-hours trading on Thursday, driven by an optimistic outlook for the current quarter which pleased Wall Street analysts. Despite reporting a Q4 loss of $0.24 per share, this figure was $0.17 better than the anticipated consensus loss of $0.41, showcasing a more robust performance than expected. The company’s revenue for the quarter was $1.2 billion, marking a 22% increase year-over-year and surpassing the consensus estimate of $1.15 billion.
Platform revenue, a critical component of Roku’s business model, reached $3.5 billion, an 18% increase from the previous year and up 15% when excluding political ad spending. This growth reflects Roku’s expanding user base and the effectiveness of its advertising platform. Gross profit also saw a significant rise, climbing 19% year-over-year to $1.8 billion, underscoring the company’s ability to monetize its expanding platform.
The Average Revenue Per User (ARPU) on a trailing 12-month basis increased to $41.49, up by 4% from the previous year, indicating a healthy growth in monetization per user. This metric is particularly important for Roku as it reflects the company’s ability to generate more value from its growing audience through increased engagement, better ad sales, or higher service fees.
For the first quarter, Roku provided guidance that was in line with analyst expectations, projecting revenues of approximately $1.005 billion, closely matching the consensus estimate of $1.01 billion. Adjusted EBITDA is expected to be around $55 million. Looking further ahead, Roku offered full-year 2025 guidance, expecting revenues to hit $4.610 billion, aligning with the consensus, and an adjusted EBITDA of $350 million, indicating a strategic focus on profitability alongside growth.
Roku’s performance and outlook suggest a company that is navigating the competitive streaming landscape with some success, particularly in enhancing its platform’s revenue capabilities and user engagement. However, the streaming industry continues to be a battleground with players like Amazon, Netflix, and Disney+ vying for market share, not to mention the ongoing shift towards ad-supported models in streaming services. Roku’s ability to maintain growth in ARPU, expand its platform revenue, and manage costs will be crucial in maintaining this positive momentum, especially as it balances between growth investments and profitability.
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