It may not be the easiest ad environment in the world at present, but Roku’s Q2 earnings show that there’s still plenty of optimism to be had in the state of the entertainment world. Blake & Wang P.A. entertainment Lawyer Los Angeles, Brandon Blake, unpacks their results.
Revenue Earnings Up, Net Loss
The company reports revenue of $847.2M, inclusive of its platform revenue. Of this, the Roku Channel and its advertising-based model pulled in $743.8M. Overall, it still comes to a net loss of $126M, but even that is a decided improvement on its Q1 losses of $212M, and holds mostly even with the $110M loss from the same quarter last year.
They also report 73.5M active accounts on the platform, a distinct improvement from 63.1M last year. While streaming hours were flat between the quarters, they’re up just short of 5B hour from last year as well.
They anticipate revenue of $815M for the next quarter, and a gross profit in the region of $533M.
On the Ad Environment
It is no secret that the advertising environment has been soft over the last year, with the total US advertising market staying flat for Q2. Roku reports seeing the strongest dips in technology and the media entertainment categories. This has been partially offset by rises from the consumer packaged goods and health/wellness categories. And this in an environment where the Upfront negotiations have been slower and shakier than anticipated.
Interestingly, despite some solid performances from the Roku Originals we’ve seen over the last year, they have re-committed to a foundation of content spend based on third-party licensed content.
With a notably different operating model from most of the competitive streaming services, it is always intriguing to see how the mercurial nature of the advertising environment has impacted Roku. So far, so good, it seems.
