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Roku Posts Surprise Q4 Profit on Surge in Revenue Per User

Roku reported an adjusted profit of 49 cents per share in a quarter in which it was expected to lose money.
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Roku  (ROKU) - Get Roku Inc. Report shares rose after reporting a surprise profit in the fourth quarter as the streaming platform surpassed 51 million active accounts.

The San Jose, California-based company reported fourth quarter earnings of 53 cents per share, or 49 cents per share adjusted, on revenue of $649.9 million, a 58% year-over-year increase. Analysts were expecting an adjusted net loss of 5 cents per share on revenue of $617.7 million.

Roku shares traded flat in after-hours trading Thursday.

"Our strategy and execution are working well, and we are seeing the results in our financial performance, our continued position as America’s No. 1 TV streaming platform by streaming hours, and our early international successes," CEO Anthony Wood said.

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Average revenue per user rose 24% year-over-year to $28.76 in the fourth quarter. The company said it benefited from increased advertising revenue as its six largest ad buyers more than doubled their spending on Roku year-over-year. 

The company said that it will begin launching Quibi content later this year after purchasing the online media network's content in January following Quibi's shuttering last year.

As was previously announced, Roku users streamed 17 billion hours of content in the fourth quarter and over 58 billion hours in 2020 overall. Both periods were up 55% year-over-year. 

Streaming player unit sales grew 28% in 2020, resulting in revenue from that segment increasing 32% over the previous year. 

For the first quarter, Roku expects revenue of $485 million, keeping in line with the company's historical 25% sequential revenue dip in the quarter. Analysts are expecting revenue of about $463 million.