Roku is feeling the impact on its first-quarter advertising revenue results as marketers have scaled back efforts.
“While our advertising business has seen higher than normal cancellations as overall advertising budgets have declined, this has been partially offset by ad-spend that has moved to Roku from traditional TV budgets,” according to a company earnings release.
After-market trading of Roku’s stock was down 9%.
Roku added: “We anticipate that our ad business will deliver substantial revenue growth on a year-over-year basis, albeit at a slower pace and lower gross profit than we originally expected for the year.”
The company did not provide specific details. Roku doesn’t break out advertising revenues in its financial data.
Overall first-quarter revenue was up 55% to $321 million -- better than expected, with net losses widening to $55.2 million from $10.7 million.
Revenue from its "platform" business -- the software interface on smart TVs and the like -- was up 73.4% to $232.6 million, while set-top-box device revenues grew 21.7% to $88.2 million.
Overall active accounts grew 37% versus a year ago to 39.8 million (from 29.1 million in the first quarter of 2019).
Active accounts totaled 36.9 million in the fourth quarter of 2019.
Streaming hours climbed 80% year-over-year -- and 1.6 billion hours over last quarter -- to a record 13.2 billion. Streaming hours per account grew 30%.
Roku said: “While our advertising business faces near-term challenges, our content distribution business, as well as overall consumer engagement, have benefited from a surge in OTT usage.”