Is Roku Finally Slowing Down?

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Roku Inc. (NASDAQ: ROKU) released its first-quarter earnings report after markets closed Wednesday. The company posted a net loss of $0.07 per share on $136.6 million in revenue. Thomson Reuters consensus estimates had called for a net loss of $0.15 per share and $127.15 million in revenue. The same period from last year had a net loss of $0.09 per share on $100.1 million in revenue.

During the quarter, platform revenue increased 106% year over year to $75.1 million. However player revenue fell 3% to $61.5 million.

Active accounts increased by 47% to 20.8 million, while streaming hours increased 56% to 5.1 billion hours. Overall this yielded an average revenue per user of $15.07 for the quarter, which was an increase of 50% year over year.

In terms of the outlook for the second quarter, Roku expects to see a net loss in the range of $19 million to $14 million and total net revenues in the range of $135 million to $145 million. There are consensus estimates calling for $0.16 in EPS on $135.29 million in revenue for the coming quarter.

Anthony Wood, founder & CEO, commented:

We saw strong momentum across our key operating metrics. Roku ended Q1 2018, with 20.8 million active accounts, up 47% year-over-year. Half of the new accounts in the quarter came from licensed sources, primarily Roku TVs. Roku users streamed 5.1 billion hours in the quarter, up 56% year-over-year, with the fastest growth coming from ad-supported content. Trailing 12-month ARPU in the first quarter increased 50% year-over-year to a record $15.07, the fastest ARPU growth rate in over 18 months as we continue to expand platform monetization and capture a larger share of TV ad budgets. We believe there is a long runway for upside to ARPU from content distribution, audience development and advertising growth, as consumers spend time streaming more ad-supported content, and as Roku gains access to a greater share of overall ad impressions.

Shares of Roku closed Wednesday up about 9% at $36.08, with a consensus analyst price target of $36.57 and a 52-week range of $15.75 to $58.80. Following the announcement, the stock was initially up 2.5% at $37.00 in the after-hours session.

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