×
You will be redirected back to your article in seconds

Roku Earnings Beat Expectations as Ads, Services Surpass Hardware Revenue

Meet the new Roku: The company best known for its streaming devices made more money with ads and licensing fees than with hardware sales for the first time in its corporate history this past quarter. Roku generated $61.5 million with the sale of streaming pucks and sticks during the first quarter of this year, and $75.1 million with advertising and licensing fees.

“That shows clearly that our business model is working,” said Roku CEO Anthony Wood in an interview with Variety Wednesday. The company has long had the strategy to use its hardware as a way to grow its audience, and monetize that audience through advertising. “Our scale is growing,” Wood said.

Roku generated a total revenue of $136.6 million during the first quarter, compared to $100.1 million during the same quarter last year. The company had net losses of $6.9 million, compared to $7.8 million a year ago. This translates to adjusted losses of $0.07 per share, compared to $1.79 a year ago.

Analysts had expected revenue of $128 million for the quarter, and losses of $0.15 per share. Roku’s stock price was up around 5 percent in after-hours trading.

The company ended the quarter with 20.8 million active accounts, with consumers streaming a collective 5.1 billion hours of audio and video via Roku’s platform in Q1. That’s up from 14.2 million active accounts, and 3.3 million streaming hours a year ago.

Half of Roku’s new users came from Roku smart TVs built by companies like TCL, with Wood telling Variety that 1 in 4 TVs sold in the U.S. during the quarter were Roku TVs.

The company also revealed in its letter to investors that almost half of Roku’s active users have cut the cord, or never had a pay TV subscription to begin with. It went on to argue that media companies would increasingly target those consumers by licensing their content to players like Roku instead of trying to build out their own streaming services.

“It’s hard to build a direct-to-consumer service,” said Wood. “A typical media company really doesn’t have those skills.”

Roku’s stock price came under pressure last month after Amazon announced a partnership with Best Buy to sell Insignia TVs powered by Amazon’s Fire TV operating system. Insignia, Best Buy’s house brand, had previously made a number of TVs powered by Roku’s software.

But on Wednesday, Wood seemed confident that the partnership between Best Buy and Amazon wouldn’t have too much of an impact on Roku, arguing that consumers would still be able to buy Roku TVs from a number of other manufacturers at Best Buy. “We are confident that (..)  the number of models of Roku TVs at Best Buy will go up this year,” he said.

More Digital

  • hdhomerun roku app

    HDHomerun App Brings Live TV to Roku Devices

    Roku users are getting another way to watch live television with the help of their favorite streaming devices: Silicondust, maker of the HDHomerun TV tuners, has released a beta version of its HDHomerun app for Roku TVs and streaming devices. “We need to start out by saying this is very much a beta product,” the [...]

  • Vox Media

    Vox Media Staff Ratifies First Union Contract, Negotiated by Writers Guild

    Staffers at Vox Media, which includes Curbed, Eater, Polygon, Recode, SB Nation, The Verge and Vox.com, have ratified their first collective bargaining agreement with more than 90% in support. The staffers are represented by the Writers Guild of America East. Vox Media’s 350-member unit began bargaining their first contract in April 2018. The campaign to [...]

  • Joslyn Davis, Lily-Marston - Shared Media

    Clevver’s Joslyn Davis, Lily Marston Launch Their Own YouTube Media Venture (EXCLUSIVE)

    Here’s the latest chapter in the saga of Clevver, the entertainment/lifestyle YouTube network marooned by the shuttering of former parent Defy Media and subsequently snapped up by Hearst Magazines. Two of the principal creatives behind Clevver — Joslyn Davis and Lily Marston — together with Clevver Media co-founder Jorge Maldonado have launched Shared Media, their [...]

  • Money-Diaries-Refinery29

    Refinery29 to Produce Interactive Series Funded by Eko (EXCLUSIVE)

    Refinery29 has been bitten by the “Bandersnatch” bug. The millennial-female-focused digital media and entertainment company inked a pact with Eko, an interactive-video platform developer whose backers include Walmart, to produce several “choose-your-own-adventure”-style series based on Refinery29 content properties. The companies have started development on their first project: an interactive scripted adaptation of Refinery29’s popular “Money [...]

  • Dan Howell

    YouTube Star Dan Howell Comes Out as Gay: 'It Gets So Much Better'

    It’s Pride Month, and popular YouTube vlogger Dan Howell had a message for fans that he’d been working on for a year: “Basically, I’m Gay,” he shared in a video Thursday. In the 45-minute video, Howell discussed coming to terms with his sexual orientation and his thoughts on labels that people use to define themselves [...]

  • Netflix Expands Korean Content Commitment

    Netflix Expands Korean Content Commitment as Industry Deepens

    Global streaming giant, Netflix is expanding its involvement in the Korean film and TV industries by greenlighting several new shows and renewing others. “When we started three years ago, we had a high degree of confidence that Korean drama would work well in Asia, but we had no internal metrics of our own,” Korean content [...]

  • Instagram Logo

    Instagram Outage: Facebook’s Photo Sharing Service Went Down For Multiple Hours

    Instagram faced another major outage Thursday afternoon, with users from around the world reporting that they weren’t able to access Facebook’s photo sharing service via its app and website. An Instagram spokesperson told Variety around 5pm PT that the issue had been resolved: “Earlier today, a technical issue caused some people to have trouble accessing [...]

More From Our Brands

Access exclusive content