Roku jumps 9% as revenue, streaming hours soar (ROKU)

Roku

Roku reported better-than-expected first-quarter results and raised its guidance.
The results received praise on Wall Street.
Shares were up more than 9%.
Watch Roku trade live.

Roku shares were surging Thursday morning, up more than 9% to almost $71 apiece, after the company reported better-than-expected first-quarter results and raised its guidance.

The video-streaming service lost $0.09 a share as net revenue surged 51% versus a year ago to $206.7 million. Those numbers were better than the $0.24 loss and $189.9 million that analysts surveyed by Bloomberg were expecting.

Roku said the number of active accounts increased by 2 million duering the quarter to 29.1 million, and that streaming hours jumped by 1.6 billion to 8.9 billion. Average revenue per user spiked 27% year-over-year to $19.06 on a trailing 12-month basis.

"Roku continues to execute well in a rapidly evolving marketplace that offers new opportunities to fuel our growth," the company said in its shareholder letter.

"As leading content companies continue to shift their focus to streaming, Roku’s purpose-built TV streaming OS is uniquely positioned to help them build, engage, retain and monetize OTT audiences. Our large and rapidly growing audience, rich proprietary data and powerful OS allow us to deliver more effective, targeted and measurable viewing and advertising along with unduplicated incremental reach."

Looking ahead, Roku sees revenue climbing 42% YoY in Q2 — to almost $223 million at the midpoint. Wall Street analysts surveyed by Bloomberg were hoping for $218.5 milion. The company also raised its full-year 2019 gross profit outlook to $470 million, up from $453 million.

Wednesday’s results sparked a wave of positive commentary from analysts on Wall Street.

"ROKU has surged 112% YTD, but we still see more upside," RBC analyst Mark Mahaney said in a note, while raising his price target from $70 to $90 a share.

"Long term, we view ROKU as one of the best plays on ad-supported OTT. Roku is attacking a very large $70B TV Ad spend opportunity and as this spend migrates to over-the-top, we believe Roku can sustain robust growth in both Active Accounts and Total Hours Streamed, while improving monetization to drive material ARPU and, of course, Revenue growth. Near-term, 2019 and 2020 should be the years of new OTT launches (Disney, Apple, AT&T, etc…), and ROKU should be very well positioned against these launches. Both Disney and Apple have called out ROKU as a launch partner."

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