Roku Sees Q3 Growth In Revenue, Active Accounts, But Net Losses Mount

Roku, the big OTT platform for TV networks and streaming content, continues to tout steady financial growth in revenue, active accounts, and average revenue per user. But it also continues to see nagging losses.

The company's net losses were $25.2 million in the third quarter of this year -- versus $9.5 million in the third quarter of 2018. 

After-market Wednesday trading of its stock tumbled by over 15%. Roku released its third-quarter results after the stock market closed on Wednesday, where its stock closed up 1.5% to $141.05.

Looking more closely, the company continues to say its yearly cash flow -- earnings before interest, taxes, depreciation and amortization -- will be break-even in 2019.



In positive news, the company grew its active accounts to 32.3 million from 30.5 million during the previous quarter (and against 23.8 million in the third quarter of 2018). Its average revenue per user in the current period was $22.58 compared to $21.06 in the second quarter of this year -- and up 30% (from $17.34) in the third quarter of 2018.

During its earnings call, executives said the company’s Roku Channel witnessed double the number of advertising impressions compared to a year ago.

With regard to overall advertising, Scott Rosenberg, senior vp/general manager of platform business, said:

“We think our biggest competition is in attracting linear TV ad spend into OTT... Roku is uniquely situated to serve advertisers. We can prove incremental reach; we have a first party relationship with our consumers.”

Roku believes its recently announced purchase of demand-side platform dataxu will help ramp up advertising spending into OTT. eMarketer estimates that Roku will get to $433 million in ad revenues in 2019.

Roku's total quarterly revenue grew 50% to $260.9 million in the period, with revenues from platform deals -- on smart TVs and other devices -- up 79% to $179.3 million. Sales of set-top box players were up 11% to $81.6 million.

For the full year 2019, it is estimating around $1.1 billion, with gross profit about $490 million. It projected an overall net loss of between $61 million and $66 million.

Overall streaming hours grew 70% to 10.3 billion versus the year-ago period.

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