More people are streaming than ever before — and that’s paying off big for Roku, with the device maker beating revenue expectations and posting major user growth in its first quarter financials on Wednesday.
For the three months ended March 31, Roku reported revenue of $136.6 million and a loss of 7 cents a share — easily lapping Wall Street projections of $127.4 million in sales and a loss of 15 cents a share. Revenue jumped 36 percent year-over-year.
Perhaps most importantly for investors, however, was the company’s growing user base. Roku reported a 47 percent year-over-year jump to 20.8 million active accounts.
Users are also streaming more — a lot more, it turns out, with 5.1 billion hours of content watched during the quarter. That compares to 3.3 billion hours for the same quarter last year.
Investors liked what they saw. Shares of Roku jumped 1.64 percent to $36.67 in after-hours trading, after climbing nearly 9 percent on Wednesday heading into earnings.
As Netflix and other streaming giants continue to churn out content, Roku pointed to its “strategic position” as a leading device maker as a reason for its success.
“The secular shift from legacy TV distribution to streaming continues unabated. Our purpose-built TV operating system and advertising platform continue to lead the market,” said the company in a statement accompanying its Q1 report. “Moreover, our advertising and content partners are benefiting from our increasing scale. Nearly half of our roughly 21 million active users have cut the cord or have never had a traditional pay TV subscription, which means that they simply cannot be reached through linear TV.”
One clear sign Roku’s business is evolving was its revenue breakdown: the company made more from ad sales than hardware sales for the first time in its history during Q1. Roku also raised its revenue projections for the rest of 2018, adding the company expects to “break-even” by the end of the year.
The Los Gatos, California-based company went public last year, competing with industry heavyweights like Apple and Amazon for a share of the growing streaming market.
A report from research group Convina on Wednesday showed television streaming had tripled since 2015 — passing computer viewing as the go-to way to stream.
Roku will hold a call at 5 p.m ET to discuss its first quarter financials.