Amid a flurry of Q3 results, Roku has managed to beat Wall Street expectations- and finally turn its operating income positive. To fill us in, we have entertainment lawyer Brandon Blake, at Blake & Wang P.A.
Beating Expectations
Roku declared net revenue of $1.21B. This included net income at 24.8M for the latest quarter. Both were well beyond what Wall Street expected. To add to the good news for the company, this was also the first time their operating income has been positive since 2021, reaching $9.5M.
Their platform revenue was up by 17% ($1.065B) as well. This was mostly off the back of strong video advertising as well as their premium subscriptions for the streaming service. This quarter also shows results from their recent takeover of Frndly TV. Ironically, their devices arm- which has powered much of their growth to date - declined to $146M.
Strong Popularity
The good news carried into their overall streaming hours as well. Up 4.5B since last year to finish at 36.5B, it will be interesting to see how their new $2.99 streaming service, Howdy, performs over the next few months. Launched in August, details are still a little scarce to date.
Roku also repurchased $50M of its common stock under a planned $400M stock buy-back. They expect the full year to close around $4.11B, with adjusted EBITDA of $395M. Both would be a notable increase on the previous year.
Roku has been a surprising success story during the rise of the streaming era. Previously powered mostly by sales of their set-top boxes and other hardware, they have managed to successfully shift into a smaller streaming platform with a loyal and solid core audience.
The question now is, “What’s next?” As we see even the largest streamers jockey for subscribers as the market becomes saturated, it’s good to see a smaller platform still expanding its growth, Roku, at least, seems set up for success.
