Recent IPO Roku Soars Late On Third-Quarter Earnings Beat

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Streaming video firm Roku ( ROKU ) saw its shares rocket in late trading Wednesday after the company reported much better-than-expected results for the third quarter, its first as a publicly traded company.

Roku reported an adjusted loss of 10 cents a share in the third quarter, compared with a loss of 17 cents a share in the year-earlier period. Revenue rose 40% to $124.8 million. Analysts expected a loss of 28 cents a share on sales of $110.5 million in the September quarter.

For the December quarter, Roku expects revenue of $182.5 million, based on the midpoint of its guidance. It did not give a target for earnings per share. Wall Street was modeling a loss of 13 cents a share and sales of $177 million.

Roku shares soared 26%, near 23.80, in after-hours trading on the stock market today . During the regular session, Roku fell 1.5% to 18.84.

Roku went public on Sept. 28 at $14 a share. It notched a record high of 29.80 on its second day of trading. Since then, it has fallen in 20 out of the last 28 trading sessions.

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Roku makes hardware and software for accessing internet video services like Netflix ( NFLX ), Hulu and 's ( AMZN ) Amazon Prime Video. It sells set-top boxes and dongles and provides software for smart TVs. It also gets revenue from selling advertising on its home screen and takes a share of pay-per-view movie sales and subscriptions sold through its platform.

In the streaming hardware market, Roku competes with Amazon, Apple ( AAPL ), Alphabet ( GOOGL )-owned Google and others.

The company describes itself as a "content distribution platform." It had ended the quarter with 16.7 million active users, up 48% year over year.

Average revenue per user grew 37% year over year to $12.68.

"We now expect full-year revenue to reach or exceed $500 million in 2017, up from nearly $400 million last year," Chief Executive Anthony Wood and Chief Financial Officer Steve Louden said in a letter to shareholders. "Our higher-margin platform segment is the key driver of our growth and gross margin expansion, and our advertising business has more than doubled in size year-to-date."

Roku's home screen provides access to advertiser-supported and subscription-based TV networks. In the U.S., it offers more than 5,000 streaming channels on its platform.

Roku also offers access to transactional video-on-demand content so users can watch pay-per-view movies, TV shows and other content.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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