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.”
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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.