• by Wayne Friedman , October 31, 2023

Roku will see a “slower rebound in video advertising revenue growth compared to prior estimates,” MoffettNathanson Research says in a recent report.

Platform revenues -- of which advertising is a major piece -- are now forecast to grow 12.7% to $751.6 million in the third quarter.

For the year, MoffettNathanson says, it will be up 9.3% to revenue of $2.96 billion.

MoffettNathanson has estimated advertising revenue to be 85% of all "platform" revenue -- with content/distribution revenues making up the remaining piece.

Michael Nathanson, media analyst and co-founder, writes that Roku ad revenue "is still down for the six month period 2023." By way of comparison, revenues for 2022 posted a 28% gain versus the previous-year period for the first quarter, and an 18% hike in the second quarter.

In the summer of 2022, Roku warned of a major slowdown in advertising revenue, which still continues to an extent this year.

After that call, it witnessed a smaller 12% increase in revenues in the third quarter, followed by flat revenue results in the fourth quarter.

Over the last year or so, the company has made significant cost reductions.

From all of this, MoffettNathanson says, in the wake of its more focused pursuit of stronger profitability: “We are upgrading Roku from Sell to Neutral... not that this isn’t a call on a strong top-line or healthier scatter market for Roku.”

MoffettNathanson  also projects Roku "device" revenue to be up 15.3% to $108.5 million  in the third quarter period and 16% higher in overall 2023 revenue to $481 million.