Roku Shares Jump as Firm Tops Estimates for Earnings, Revenue and Subscribers

Roku shares jumped after the streaming-equipment and -content company reported a fourth-quarter loss and increases in revenue and subscribers that all were better than analysts estimates.
Author:
Updated:
Original:

Roku (ROKU) - Get Report shares jumped after the streaming-equipment and -content company reported a fourth-quarter loss and increases in revenue and subscribers that all were better than analysts estimated.

The revenue outlook also exceeded Wall Street's expectations.

The company posted a loss of 13 cents a share on revenue of $411 million. Analysts surveyed by FactSet were expecting a net loss of 14 cents a share on revenue of $391.6 million.

The company also reported 36.9 million subscribers, ahead of Wall Street's expectations of 36 million subscribers.

The streaming content aggregator sees a boon from the proliferation of over-the-top streaming options like Disney+ (DIS) - Get Report and HBO Max. (T) - Get Report

“These developments were a clear indication that traditional media, as well as new entrants, plan to compete aggressively in over the top, and we believe Roku is the best platform for them to engage streamers,” the company said in a news release.

Roku added 4.6 million incremental active accounts in the fourth quarter, a record number of additions for the company. Engagement on the platform from users rose 60% year over year to 11.7 billion hours.

For the first quarter, the company's historically softest period for revenue, Roku pegs revenue at the midpoint up 48% at $305 million. It sees a loss before interest, taxes, depreciation and amortization of $20 million.

Roku for all of 2020 is looking for revenue to rise 42% to $1.6 billion.

FactSet's survey is looking for revenue of $299.7 million for Q1 and $1.56 billion for all of 2020.

On Wednesday, analysts at Needham called Roku the “winning aggregator” in the U.S. for subscription video on demand and advertising-based video on demand services.

The firm estimated that streaming viewing makes up 20% of total viewership in over-the-top-capable households.

At last check Roku shares were up 4.1%. They'd closed the regular session Thursday up 0.6% at $139.05.

Roku shares more than quadrupled in 2019, compared with an average return of 37% for the rest of the Nasdaq. 

The shares had dropped 16% in the session after the company reported third-quarter earnings that missed expectations.