Roku on Wednesday reported impressive revenue growth during the second quarter, but lagged account growth and a dip in the amount of time viewers spent streaming led to the company’s stock taking a hit on Wall Street.
The key numbers to know: Roku reported $645 million in quarterly sales, which topped Wall Street estimates of $618 million in revenue. The bulk of those sales stemmed from Roku’s platform revenue, which is driven mostly by ad sales, increasing 117% year-over-year to $532 million.
Roku also reported earnings of 52 cents per share, easily lapping analyst projections of 12 cents per share. The Los Gatos, Calif.-based company’s gross profit increased 130% from last year to $338 million.
The company’s stock price took a hit in early after-hours trading, though, likely because Roku said its customers watched less content than they did earlier in the year. Overall, Roku’s viewers streamed 17.4 billion hours of content, which was 1 billion hours less than Q1, but still up 19% year-over-year.
Roku’s account growth slowed down during Q2 as well. Roku added 1.5 million new accounts, bringing the company to 55.1 million. For comparison, Roku added. 2.4 million new accounts last quarter.
About 20 minutes after the market closed, Roku’s stock price was down 8.4% to $385 per share. Heading into Roku’s earnings, the company’s stock price was up 32% since the start of the year and had recently hit a new all-time high of $490.76 per share.
Most notably during the second quarter, Roku started to roll out its slate of original content, following its acquisition of more than 75 shows and movies from Quibi earlier this year. Roku didn’t offer much insight into how its initial batch of 30 shows performed, but the company did say that in the two weeks following their launch on May 20, “a record number of unique accounts streamed The Roku Channel.” The company also said “the top ten watched programs on The Roku Channel were all Roku Originals” during that same timeframe.
Looking ahead, Roku projected $675-$685 million in Q3 revenue.