Yahoo Finance ROKU Q1 Loss Narrower Than Expected, Revenues Increase Y/Y
Roku ROKU reported first-quarter 2024 loss of 35 cents per share, narrower than the Zacks Consensus Estimate of a loss of 64 cents. The company had incurred a loss of $1.38 per share in the year-ago quarter.
Revenues increased 18.9% from the year-ago quarter’s level to $881.47 million and beat the consensus mark by 3.58%. Growth of The Roku Channel’s streaming households and streaming hours drove first-quarter performance.
Streaming households’ net adds were 1.6 million in the first quarter, taking the total to 81.6 million globally, reflecting greater engagement and more monetization opportunities.
Roku has become the No. 1 TV streaming platform by hours streamed in the United States, Canada and Mexico. Globally, users streamed a record of 30.8 billion hours in the first quarter, up 1.7 billion hours from the prior quarter.
The average revenue per user declined 0.05% from the prior-year quarter’s level to $40.65 (on a trailing 12-month basis).
For the ninth consecutive quarter, The Roku Channel was among the top five channels by both streaming households’ reach and streaming hour engagement on the platform in the United States. The Roku Channel’s streaming households are approaching half of all broadband households in the United States.
Roku, Inc. Price, Consensus and EPS Surprise
Roku, Inc. price-consensus-eps-surprise-chart | Roku, Inc. Quote
Quarter Details
Platform revenues (85.6% of revenues) increased 19% year over year to $754.9 million through strong contributions from content distribution and video advertising.
Devices revenues (14.4% of revenues) rose 18.9% from the year-ago quarter’s level to $126.5 million.
Roku operating system (OS) was the #1 selling TV OS in the United States for the fifth year in a row. In the first quarter, Roku OS was the #1 selling TV OS in both Canada and Mexico.
In the first quarter, the company partnered with NBCUniversal to make popular short-form video clips from Saturday Night Live, The Tonight Show Starring Jimmy Fallon and Late Night with Seth Meyers available on Roku. Clips from NBC Sports were also added.
Operating Details
Gross margin, as a percentage of total revenues, contracted 150 basis points from the year-ago quarter’s level to 44.1%.
Operating expenses decreased 16.3% year over year to $460.3 million. As a percentage of total revenues, the metric contracted to 52.2% from 74.2% reported in the year-ago quarter.
Research & development expenses decreased 18% to $180.5 million. Sales & marketing and general & administrative expenses contracted 13.6% and 19.1% on a year-over-year basis to $202.1 million and $77.7 million, respectively.
In the first quarter, adjusted EBITDA was $40.9 million against negative adjusted EBITDA of $69.1 million in the year-ago quarter.
Operating loss was $72 million in the reported quarter compared with an operating loss of $212.5 million in the year-ago quarter.
Balance Sheet
As of Mar 31, 2024, cash and cash equivalents were $2.05 billion compared with $2.02 billion as of Dec 31, 2023. As of Mar 31, 2024, Roku had no long-term debt.
Guidance
For second-quarter 2024, ROKU expects total net revenues of $935 million, total gross profit of $410 million and adjusted EBITDA of $30 million.
The company expects to deliver growth in adjusted EBITDA and free cash flow for full-year 2025.
Zacks Rank & Stocks to Consider
Roku currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks that investors can consider from the broader sector are Disney DIS, Electronic Arts EA and Roblox RBLX. DIS, EA and RBLX carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Disney have risen 25.1% year to date. DIS is set to report second-quarter fiscal 2024 results on May 7.
Shares of Electronic Arts have lost 6.9% year to date. EA is slated to report fourth-quarter fiscal 2024 results on May 7.
Shares of Roblox have plunged 21.6% year to date. RBLX is set to report first-quarter 2024 results on May 9.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Walt Disney Company (DIS) : Free Stock Analysis Report
Electronic Arts Inc. (EA) : Free Stock Analysis Report
Roku, Inc. (ROKU) : Free Stock Analysis Report
Roblox Corporation (RBLX) : Free Stock Analysis Report
