×

Roku Aims to Top $1 Billion in Revenue in 2019, Beats Holiday Quarter Earnings Expectations

Roku wants to become a billion-dollar company in 2019, and invest more in its ongoing international expansion. The streaming-device maker told investors on Thursday that it expects to generate between $1 billion and $1.025 billion this year, and that international growth was one of its key investment areas for 2019.

Roku made these announcements as part of its Q4 earnings release, which showed that it exceeded the market’s expectations for the holiday quarter. The company reported revenue of $275.7 million for Q4, compared to $188.3 million during the same quarter in 2017. Earnings came in at $5.5 million, compared to $9.5 million in Q4 of 2017. This translates to earnings of $0.06 per share.

Analysts had expected revenue of $262.11 million, and $0.03 earnings per share. Investors sent Roku’s share price up around 4% in after-hours trading, following a 4% decline earlier during the day.

“2018 was an excellent year for Roku, with record results and solid progress towards our long-term vision of powering every TV in the world,” said CEO Anthony Wood in the company’s letter to investors. “We believe we are well positioned to deliver another excellent year.”

Roku added close to 8 million active accounts in 2018, and now has devices in more than 27 million households. “We estimate that nearly 1 in 5 U.S. TV households now use the Roku platform to stream at least a portion of their TV viewing,” Wood said in the investor letter.

A closer look at Roku’s numbers showed that the company grew both its hardware as well as its ads and services business in Q4. On the hardware side, Roku brought in $124.3 million in revenue, compared to $102.8 million a year ago.

21% growth for this segment will please investors, who in the past have been concerned with slowing hardware revenues as usage shifts from dedicated streaming devices to smart TVs. The company’s hardware gross profit fell by 77%, suggesting a move toward cheaper hardware as the company emphasizes account growth.

Even more important for the company’s bottom line is what Roku calls its platform revenue — advertising and licensing fees, with ads making up the majority of that revenue stream. Platform revenue grew 77% year-over-year, totaling $151.4 million in Q4. Roku managed to more than double its monetized ad impressions in 2018, the company said on Thursday.

Roku told investors that one area of focus for 2019 would be international expansion: “While we continue to see a lot of headroom to grow active accounts in the U.S., we are increasing our investment internationally,” Wood said.

However, executives cautioned that these investments wouldn’t pay off over night. Instead, they expect the company to start accelerating account growth abroad in 2020, with international revenue following after that. “You need to build up scale before you can ramp up monetization,” said chief financial officer Steve Louden in an interview with Variety on Thursday.

Roku currently sells its own streaming devices in 20 countries, including North America, France, the U.K., and a number of Latin American countries.

Louden also shared some perspective on Roku’s audio efforts, which began in earnest with the launch of the Roku Wireless Speakers last fall. He said the company purposefully decided to not sell the speakers, which only work with TVs running Roku’s operating system, in retail stores. “It is a very limited offering,” he admitted, adding that the company would share further plans for the audio space in the future.

Popular on Variety

More Digital

  • westworld awakening art

    HBO Launches 'Westworld Awakening' VR Game With Survios

    Ever wanted to enter the world of “Westworld?” Now you can — except it won’t exactly be like you might have imagined it. Instead of being one of those guests living out their fantasies, you will be a host, slowly coming to grips with your life being an elaborate illusion. “Westworld Awakening” has been produced [...]

  • Spotify Announces Upgrades to Family Plan,

    Spotify Announces Upgrades to Family Plan, at No Charge in U.S. and U.K.

    Just days after reports emerged that Spotify is aiming to increase the price of its family plan in its home market of Scandinavia, the streaming giant announced an upgrade to the plan — with no price increase in the U.S. and U.K., where it remains at $14.99 and £15, respectively. A rep for the company [...]

  • Mike Vaughan

    Former Venmo COO Mike Vaughan Joins Stem's Board

    Los Angeles-based music distribution and payments startup Stem has appointed former Venmo executive Mike Vaughan to its board of directors. Vaughan was chief operating officer of Venmo from 2011 until earlier this year, and is now executive in residence at Oak HC/FT. “The music industry can benefit tremendously from innovation in the way money flows [...]

  • Streamy Awards

    Streamy Awards 2019 Return to YouTube for Exclusive Live-Stream

    The 9th Annual Streamy Awards will again be available to stream live on YouTube exclusively. The 2019 awards ceremony will take place at the Beverly Hilton in Beverly Hills on Friday, Dec. 13 and will stream live globally on YouTube via youtube.com/streamys. Videos from the 2018 Streamy Awards received over 6.9 million views on YouTube. [...]

  • Stefan Heinrich Henriquez - Cameo

    Celeb Video-Shoutout Startup Cameo Hires Ex-TikTok Exec Stefan Heinrich Henriquez

    Cameo, a startup that lets consumers purchase video shoutouts from celebrities, tapped Stefan Heinrich Henriquez as chief marketing officer and general manager of international. Heinrich, most recently head of marketing for short-form video app TikTok, will lead the company’s global growth and branding and play a key role in Cameo’s continued global expansion. He’s based [...]

  • Curiosity Stream Altice

    Altice USA Pacts With John Hendricks' CuriosityStream Service

    Altice USA has set a deal with John Hendricks’ CuriosityStream to expand distribution of the science- and history-focused subscription streaming service. The deal will make CuriosityStream available to all Altice USA’s 4.9 million customers across 21 states, including a big cluster serving New York and Connecticut. Altice also plans to add the CuriosityStream app to [...]

  • No Merchandising. Editorial Use Only. No

    Lionsgate Play Launching in India With Vodafone Idea

    Premium entertainment service, Lionsgate Play is launching in India through a partnership between telecoms operator Vodafone Idea and Starzplay, the subscription platform from Lionsgate subsidiary Starz. Lionsgate Play offers curated Hollywood content for the Indian consumers, with much of the content available in multiple Indian languages. It currently includes more than 7,500 television episodes and [...]

More From Our Brands

Access exclusive content