Roku's platform drives quarterly revenue beat, shares jump
Roku Inc on Wednesday topped Wall Street estimates for quarterly revenue as its strategy to focus on its ad-supported platform paid off, with more viewers spending longer hours streaming content.
Shares of Roku, which made a spectacular debut on the Nasdaq last year, rose as much as 9.2 percent in after-hours trading after the company said it added 22 million active accounts in the second quarter.
Roku is known for its device that connects televisions to streaming services from companies such as Hulu, Netflix Inc and Amazon.com Inc.
However, the company has been witnessing intense competition in this space from Apple Inc's Apple TV, Alphabet Inc's Google Chromecast and Amazon.com Inc's Amazon Fire TV.
This led the company to tap other revenue sources such as licensing its technology to television makers and earning a share of the advertising revenue from media companies based on sign-ups for apps on its platform and namesake channel. The company's subscriber addition rose 46 percent in the quarter and streaming hours increased 57 percent to 5.5 billion hours.
"Live news launch in mid-May and World Cup in June likely contributed to the performance in the quarter," D.A. Davidson & Co analyst Thomas Forte said.
"We don't think the new platforms like web will have any big impact in the short term, but in the long term it's going to expand the reach and help with the overall performance of the business," Chief Executive Officer Anthony Wood told Reuters.
Excluding items, the company broke even on a per share basis, better than the average analyst estimate of a 15-cent loss. Total net revenue rose 57.4 percent to $156.8 million, beating estimates of $141.5 million.
Shares of the company were trading up 7.8 percent at $50.92.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)