July 28, 2022
Roku July 28 proved naysayers correct, reporting a second-quarter net loss of more than $112.2 million compared to income of $73.5 million during the previous-year period. Revenue increased 18.5% to $764 million from $645.1 million last year, with player sales dropping almost 20% to $91.2 million from $112.8 million.
Roku added 1.8 million incremental active accounts to reach 63.1 million. Streaming hours topped 20.7 billion hours, up 19% (3.3 billion hours) from 17.4 billion hours in the previous-year period. Notably, total viewing time was down 0.2 billion hours from the first quarter.
In the shareholder letter, CEO Anthony Wood and CFO Steve Louden suggested that a “significant slowdown” in TV advertising spend in the quarter due to the macro-economic environment “pressured” platform revenue growth. In response to inflationary pressures, the executives believe consumers began to moderate their discretionary spending, and advertisers significantly curtailed spending in the “ad scatter market” (TV ads bought during the quarter).
“We expect these challenges to continue in the near term as economic concerns pressure markets worldwide,” they wrote. “In response, we took steps to significantly slow both operating expense and headcount growth.”
Wood and Louden said they remain confident in Roku’s industry leadership in TV streaming, the size of the market opportunity, and the company’s unique assets, including the Roku TV OS, The Roku Channel, and the ad platform.
Indeed, Roku said it surpassed a milestone with $1 billion in upfront advertising commitments going forward.
Wall Street remains less confident. Roku’s stock is down more than 25% in aftermarket trading.