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Why Roku, Inc. Stock Popped Thursday

Hulu streaming on a TV with a Roku device

What happened

Shares of streaming TV platform Roku (NASDAQ: ROKU) surged on Thursday, rising as much as 21.5%. At 11:40 a.m. EDT, shares were up 20.4%.

The stock's gain comes after the company reported better-than-expected second-quarter results. "Robust active account growth expanded the reach and scale of our TV streaming platform, while at the same time Roku captured a bigger share of TV advertising budgets and continued progress on monetization," said Roku in the company's second-quarter shareholder letter.

Hulu streaming on a TV with a Roku device

Image source: Roku.

So what

Roku reported 57% year-over-year revenue growth to $156.8 million, crushing a consensus analyst forecast for second-quarter revenue of about $141 million. This was notably a significant acceleration from Roku's 36% year-over-year revenue growth in the first quarter.

Roku's strong revenue growth was driven primarily by a 96% year-over-year increase in platform revenue . Player revenue rose 24% year over year.

On a per-share basis, Roku's net income came in at about breakeven, up from a loss of $3.18 in the year-ago quarter. This beat a consensus analyst estimate for a loss per share of $0.15.

Now what

Looking ahead, management is optimistic. "We are raising our full year 2018 outlook and believe Roku is well-positioned to seize the significant opportunities being created by the transition to streaming," management said in the company's second-quarter shareholder letter.

Roku said it expects third-quarter revenue to be between $164 million and $172 million. For the full year, Roku expects revenue to be between $710 million and $730 million -- up from previous guidance for revenue between $685 million and $705 million and above a consensus analyst forecast for full-year revenue of $698 million.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

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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