• by Wayne Friedman , February 17, 2022

Supply-chain issues hit Roku hard, impacting its advertising business and TV set sales in the fourth quarter.

The streaming platform and set-top-box maker reported revenue of $865 million in the period, compared with estimates of $894 million. Its stock sank a massive 22% in after-market trading.

Roku's co-branded TV set sales were weaker than during the pandemic due to chip shortages. Sales are down 4% year-over-year. Roku designs its TV set with a proprietary smart TV software/operating system, and then licenses the product to traditional TV set makers.

“Overall TV unit sales are likely to remain below pre-COVID levels, which could affect our active account growth,” says Roku in a letter to shareholders.

With regard to advertising business, Roku says: “Auto and CPG (consumer packaged goods) experienced supply chain disruptions that had a negative impact on their product availability and therefore led to fourth quarter softness in advertising spend.”

Speaking to CNBC on Thursday, Anthony Wood, founder and chief executive officer of Roku, said some of this will continue in the first quarter of 2022.

'>Roku does not break out advertising revenue in its earnings releases. Advertising is part of its “platform” revenue -- which grew 49% to $703.6 million. Its set-top-box player revenue dipped 9% to $161.7 million.

Wood is optimistic about future advertising business. “The number of monetization impressions doubled [in the fourth quarter],” he said, largely via The Roku Channel on its platform.

Year-over-year, Roku's impressions grew 67%. For the year, the number of advertisers grew by more than 20% -- excluding political advertising. The company said it retained over 95% of advertisers who spent $1 million or more compared to 2020.

“We believe all TV advertising is moving to streaming, but only 18% of the dollars has moved so far,” he adds. Wood says 45% of all TV viewing comes from streaming. He did not provide specific details.

Roku says monthly active accounts are now at 60.1 million, an increase of 8.9 million active accounts from a year ago.