Roku’s fourth-quarter 2022 earnings came in above previously lowered expectations, as the company continued to see growth in its platform business.

The streaming device and platform company posted revenue of $867.1 million, essentially flat year over year, and a net loss of $237.2 million (or $1.70 per share) for the period compared with net income of $23.7 million in Q4 2021. That was a healthy beat on the top line: Wall Street analysts on average expected revenue of $801.69 million and a loss of $1.73 per share, according to Refinitiv data.

“Despite tightening advertising budgets in Q4, ad spend on the Roku platform outperformed the overall ad and traditional TV markets in the U.S.,” Roku said in its quarterly earnings letter to shareholders. Roku had previously warned investors it was facing weaker-than-expected Q4 results because of inflationary pressure and an ad-spending slowdown, projecting total net revenue of about $800 million.

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Roku also touted a new milestone: In Q4, the Roku Channel reached U.S. households with an estimated 100 million people (up 25% from 80 million a year prior), according to the company.

In 2022, Roku grew overall Platform segment revenue 20%, to $2.7 billion, through higher ad sales, distribution of streaming services and FAST channels, Roku Pay and its media and entertainment (M&E) promotional offerings. Platform revenue in Q4 was up 5%, to $731 million. Revenue in Roku’s newly renamed Devices segment (previously called Player) fell 18%, to $135.8 million; the Devices segment now includes licensing arrangements with service operators and TV brands in addition to hardware sales.

Meanwhile, operating expenses jumped 71% in the fourth quarter, to $614.3 million. Roku said it has been “adjusting our operations and operating expense profile to better manage through the challenging macro environment.” It expects operating expense growth to decline over the course of the 2023, from a roughly 40% increase in Q1 to a “single-digit” uptick by Q4.

In November, Roku said it was eliminating 200 jobs in the U.S., cutting about 7% of its overall workforce. The company recorded restructuring charges of $38.1 million in Q4, which included $30.6 million in severance and related charges.

For Q1, Roku said the outlook “reflects normal seasonality” with total net revenue projected to be roughly $700 million, down about 5% (but slightly better than analyst forecasts). The company expects total gross profit of roughly $310 million with adjusted EBITDA of negative $110 million. “Given our ongoing work to carefully manage expenditures, we are committed to a path that delivers positive adjusted EBITDA for full year 2024,” the company said.

Last month Roku announced that it had 70 million active streaming accounts at the end of 2022, gaining about 4.6 million in Q4. Total streaming hours on Roku devices in Q4 hit 23.9 billion (up 23% on an annual basis) and 87.4 billion for full-year 2022 (up 19%).

The Q4 financial results come as Roku has stepped up its focus on content, including original productions, for the Roku Channel. Last fall, the company hired Charlie Collier, former CEO of Fox Entertainment, as president of the newly established Roku Media division.

This spring, the Roku Channel plans to launch a suite of Warner Bros. Discovery free, ad-supported streaming television (FAST) channels, stocked with titles including HBO’s “Westworld,” HBO Max’s “F-Boy Island,” TLC’s “Cake Boss” and “Say Yes to the Dress,” and “The Bachelor” from Warner Horizon Unscripted Television. In addition, the Roku Channel will add about 2,000 hours of on-demand content featuring hundreds of WBD’s TV series and movies. In Q4, the Roku Channel added FAST channels from NBCUniversal and the NHL as well as an exclusive AMC channel featuring “Mad Men.”

In another new initiative, Roku this spring is set to launch its own line of Roku-branded smart TVs, after years of working with TV manufacturing partners on co-branded Roku TVs. Asked on the earnings call about the impact of Roku competing with TV makers that have licensed its operating system, CEO Anthony Wood said, “We feel pretty strongly that the Roku-branded portion of the [Roku TV] program is additive to our overall business.” He added that the move was similar to Google selling its own Pixel phone while also supporting the Android device ecosystem, with the overall effect of driving “innovation” and increasing consumer choice.

The company also announced a pact with food-delivery service DoorDash to let Roku users place orders via interactive ads, with Wendy’s on board as the first partner.

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