Roku’s stock climbed on Wednesday afternoon, after the device maker beat Wall Street revenue expectations and reported that its customers watched nearly 9 billion hours of content during the first quarter.
Roku reported Q1 revenue of $206.7 million and a loss of 9 cents per share, surpassing analyst estimates of $192 million in sales and a loss of 24 cents per share.
The company also beat analyst estimates when it came to total accounts, with the company adding 2 million accounts, hitting 29.1 million overall. Analysts had projected about 28.4 million active accounts at the end of the first quarter.
Roku reported its viewers watched 8.9 billion hours worth of content during the first quarter on its devices — coming out to about 3.4 hours per day on average across its 29.1 million accounts. Streaming hours noticeably jumped from the same time last year, increasing 74% year-over-year.
The company’s stock popped in early after-hours trading, increasing 7% to $69.30 per share.
“The shift to streaming and away from linear TV and legacy distribution platforms has enormous momentum. We estimate that in Q1 2019 more than one-in-three smart TVs sold in the U.S. were Roku TVs, making the Roku OS the #1 selling smart TV OS in the U.S,” the company said in its letter to shareholders.
The Los Gatos, California-based company is best known for devices like the Streaming Stick, but the first quarter was another step in Roku’s evolution from a hardware-focused business to a company that leans on advertiser revenue. Roku made $134 million in Q1 ad revenue, an increase of 79% year-over-year.
Heading into Wednesday, signs have pointed to entrenched TV providers losing ground to streaming services at an accelerated rate — a trend that would benefit Roku and other device makers. Cord-cutting hit a record high during the first quarter, with more than 1.2 million U.S. customers ditching traditional cable and satellite providers like DirecTV, Comcast and Dish. Roku started directly selling premium streaming subscriptions during the first quarter to services like Showtime and Starz.
And while subscription services like Netflix and Hulu have led the shift towards streaming, Roku has started to double down on free, ad-supported channels to expand its business.
“Nine out of 10 people are looking for free content on our platform,” Rob Holmes, Roku’s VP of programming, told TheWrap back in March when asked about the company’s shift toward ad-supported content.
Roku’s stock had already been on a hot streak since the beginning of the year, and increased 100% in value during that time period to hit $65 per share as trading came to a close on Wednesday.
The company will hold a conference call to discuss its earnings at 5:00 p.m. ET.