Roku Stock Climbs 75% After Strong Earnings, Home Audio Investment

Roku’s stock price surged a second day in a row Friday, closing at $33.25 per share and gaining close to 14% over Thursday’s closing price. Altogether, Roku has gained a whopping 75% over Wednesday’s closing price following the company’s strong earnings report posted after close of markets that day.

News of an investment in home audio, which Variety first broke Thursday afternoon, likely benefited the company’s stock as well.

Following its September IPO, Roku reported its first-ever quarterly earnings Wednesday. The report showed that the company handily beat analyst expectations with strong growth in its advertising revenue.

“Roku’s first quarter following its IPO highlighted the secular tailwinds driving user growth and monetization,” wrote Morgan Stanley Analyst Morgan Swinburne in a note to investors following the earnings report. “Specifically, active account and (average revenue peer user) growth accelerated YoY from 2Q, fueled by strong smart TV and Roku player sales, and strong advertising growth.”

Roku reported Wednesday that its platform revenue — a segment that includes advertising and licensing fees — grew 137%, year-over-year. That was good news to investors, since the gross margin on platform revenue is a lot higher than the margin on hardware sales.

It’s also key to Roku’s business model, which CEO Anthony Wood described this way in a recent interview with Variety: “Our business model is focused on growing active accounts, and then monetizing those active accounts through our platform business. The way we grow active accounts is we sell streaming players, we license to TV companies and we license to operators.”

There are growing indications that Roku is looking to expand this model to a new class of devices soon. Variety was first to report Thursday that Roku acquired the Danish multi-room audio startup Dynastrom for $3.5 million in September. This follows an earlier Variety report that Roku has assembled a team of home audio and far-field microphone experts — all pointing towards the development of an Amazon Echo-like audio product.

Roku confirmed the acquisition of Dynastrom Friday, but declined to comment further on the transaction.

More Digital

  • Pandora Shares Surge as Fourth-Quarter Subscription

    Pandora Shares Surge as Fourth-Quarter Subscription Revenue Climbs 63%

    Roku’s stock price surged a second day in a row Friday, closing at $33.25 per share and gaining close to 14% over Thursday’s closing price. Altogether, Roku has gained a whopping 75% over Wednesday’s closing price following the company’s strong earnings report posted after close of markets that day. News of an investment in home audio, […]

  • Roku headquarters

    Big Q4 Advertising Revenue Jump Helps Roku to Another Earnings Beat

    Roku’s stock price surged a second day in a row Friday, closing at $33.25 per share and gaining close to 14% over Thursday’s closing price. Altogether, Roku has gained a whopping 75% over Wednesday’s closing price following the company’s strong earnings report posted after close of markets that day. News of an investment in home audio, […]

  • https://pmcvariety.files.wordpress.com/2016/03/snapchat-survey-results.jpg

    Snapchat to Redesign Critics: Keep Using the App -- It Will Get Better

    Roku’s stock price surged a second day in a row Friday, closing at $33.25 per share and gaining close to 14% over Thursday’s closing price. Altogether, Roku has gained a whopping 75% over Wednesday’s closing price following the company’s strong earnings report posted after close of markets that day. News of an investment in home audio, […]

  • David Hogg - YouTube

    YouTube Removes Parkland-Shooting Conspiracy Video Accusing Teen Survivor of Being Actor

    Roku’s stock price surged a second day in a row Friday, closing at $33.25 per share and gaining close to 14% over Thursday’s closing price. Altogether, Roku has gained a whopping 75% over Wednesday’s closing price following the company’s strong earnings report posted after close of markets that day. News of an investment in home audio, […]

  • The Looming Tower

    Behind Hulu's Next Big Bet: 9/11 Espionage Drama 'The Looming Tower'

    Roku’s stock price surged a second day in a row Friday, closing at $33.25 per share and gaining close to 14% over Thursday’s closing price. Altogether, Roku has gained a whopping 75% over Wednesday’s closing price following the company’s strong earnings report posted after close of markets that day. News of an investment in home audio, […]

  • What the Adult Entertainment Industry Thinks

    Porn Producers Offer to Help Hollywood Take Down Deepfake Videos

    Roku’s stock price surged a second day in a row Friday, closing at $33.25 per share and gaining close to 14% over Thursday’s closing price. Altogether, Roku has gained a whopping 75% over Wednesday’s closing price following the company’s strong earnings report posted after close of markets that day. News of an investment in home audio, […]

  • Vox Media

    Vox Media Lays Off 50 Staffers, or 5% of Workforce

    Roku’s stock price surged a second day in a row Friday, closing at $33.25 per share and gaining close to 14% over Thursday’s closing price. Altogether, Roku has gained a whopping 75% over Wednesday’s closing price following the company’s strong earnings report posted after close of markets that day. News of an investment in home audio, […]

More From Our Brands

Access exclusive content