• by Wayne Friedman , February 19, 2021

Set-top-box and smart TV app platform Roku continues to ramp up business in the fourth quarter -- with revenue soaring 58% to $649.9 million -- thanks to a big boost in advertising revenue.

Although Roku did not provide specific advertising financial details, the company said it had a “more than doubling” of ad impressions, as well as increased activity from traditional TV brand advertisers.

Roku also said “six largest [media] agency holding companies more than doubled their investment” year-over-year, while also “committing to significantly larger 2021 upfronts with Roku.”

MoffettNathanson Research had estimated Roku took in $566 million in video advertising dollars for 2020.

Concerning possible advertising competition from some of the app/platforms carried on Roku, Scott Rosenberg, senior vice president and  general manager, platform business, said to analysts on Thursday:

“These content partners are our partners and our goal as an ad business is to complement, not compete with them... [we have] the ability to reach users that aren't going to be reached just through those select couple of publisher direct buys.”

He added: “So if you got to buy ‘The Office’, you got to buy a specific show, you're going to do that directly with the network. But if you're optimizing for reach and frequency and performance, investing with Roku is a key factor.”

Roku posted a net income rising 18% of $65.2 million. Roku’s stock was higher, as much as 4%, in after-market trading on Thursday.

Other key business metrics also went higher -- 51.2 million active accounts, up 39% over the same period a year before (36.9 million). Accounts were also up from 46 million in third-quarter 2020.

Total streaming hours grew 24% to 28.8 billion in the most recent reporting period.

Platform revenue -- Roku’s TV on-screen interface on smart TV and other devices -- continues to dominate its overall business, growing 81% in revenue to $471.2 million. Roku’s physical set-top box revenue grew 18% to $178.7 million.

in addition, its highly watched average revenue per set (ARPU) increased significantly -- 24% ($5.62) to $28.76 over the previous 12-month period.
Last year 38% smart TVs sold in the U.S. were TV models featuring the Roku app platform.

While Roku expects continued high growth in the first three months of 2021 --revenue projected to be $478 million and $493 million -- there is some concern for the rest of the year, in large part due to questions over the “timing of the vaccine rollouts” and “lasting economic impacts of the pandemic.”