Roku Shrinks Q1 Net Loss as Platform Revenue Tops Device Sales for the First Time

Streaming media device manufacturer Roku May 9 reported a first-quarter (ended March 31) net loss of $6.6 million on revenue of $136.5 million. This represented a 24% improvement from a net loss of $8.7 million on revenue of $100 million during the previous-year period.

Los Gatos, Calif.-based Roku said its operating platform connecting to the Internet is now incorporated in 25% of all TV sold in the United States. Roku remains a significant conduit for third-party online TV services such as Sling TV, DirecTV Now, PlayStation Vue, Hulu Live, YouTube TV, fuboTV and Philo.

“Nearly half of our roughly 21 million active users have cut the cord or have never had a traditional pay-TV subscription, which means that they simply cannot be reached through linear TV,” founder and CEO Anthony Wood wrote in the shareholder letter. “This makes our strategic position in the living room extremely valuable.”

Indeed, The Roku Channel, the ad-supported service offering catalog movies and TV shows from Lionsgate, MGM, Sony Pictures Entertainment and Warner Bros., in addition to live news from ABC News, Cheddar and People TV, among others, now ranks the 15thmost-streamed channel on Roku devices.

In March, Roku said it would make the branded channel available for the first time outside the Roku ecosystem on select Samsung TVs.

“We believe there is a significant opportunity to take The Roku Channel beyond the Roku OS platform to other large-scale platforms,” Wood wrote.

The CEO contends about 10% of all adults in the U.S. between the ages 18 and 34 can only be reached on TV via the Roku platform in the living room.

As a result, Roku is targeting the $70 billion domestic TV advertising market with its first-ever “upfronts” meetings with TV advertisers.

“This is a milestone moment for [over-the-top video], as advertisers have recognized that OTT must now be part of their TV ad-spending strategy,” wrote Wood. “While it is still early days, we believe this is a significant moment for the industry and for Roku.”

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