Roku topped Wall Street estimates for second-quarter revenue on Thursday, helped by its expanding user base and advertising sales.
Analysts expect connected TV to be one of the fastest-growing ad media outlets over the next three to five years as ad budgets shift from linear TV to streaming, with Roku being a key beneficiary given its leading scale and engagement.
In June, Roku announced an advertising partnership with Amazon.com, giving advertisers access to the largest authenticated connected TV footprint in the U.S., with a combined reach of 80 million U.S. households through the Amazon platform.
“Roku’s strategic focus on enhancing user experience is paying off, with the Roku Channel becoming the second most engaged app on the platform, and Roku TV operating system capturing nearly 40 per cent of U.S. TV unit sales,” said Kenneth Leon, director of equity research at CFRA.
The company reported revenue of $1.11 billion for the quarter, compared to the analysts’ average estimate of $1.07 billion, according to data compiled by LSEG.
Roku’s platform segment — which includes advertising and subscription revenue — grew 18 per cent to $975 million in the quarter, driven by video advertising and its acquisition of Frndly.
It also announced a $400 million stock repurchase program.
Roku expects third-quarter revenue of $1.2 billion, slightly above estimates of $1.17 billion.
