Roku Q3 Fiscal Loss Snowballs as CFO Plans 2023 Departure

Roku Nov. 2 reported a third-quarter net loss of $122.1 million on revenue of $761.3 million, compared with a net income of $68.8 million on revenue of $679.9 million during the previous-year period.

Roku added 2.3 million incremental active accounts to end the quarter with 65.4 million, compared with 56.4 million active accounts in the prior-year period. Streaming hours topped 21.9 billion hours, an increase of 1.1 billion hours from the second quarter (ended June 30). Streaming hours on The Roku Channel grew more than 90% from the same time a year earlier.

Steve Louden

Meanwhile, sales of Roku streaming devices and other consumer electronics declined 7% to $91 million, from $97.4 million a year ago. Roku platform revenue increased 15% to $670 million, which was lower than projected due to soft advertising sales.

Indeed, the company said advertising spending on the platform grew more slowly than its initial 2022 forecast due to ongoing weakness in the overall TV ad market, and the ad scatter market in particular. However, Roku contends that the long-term opportunity in TV streaming remains intact.

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“We believe the strong growth in the scale and engagement of our platform, combined with the continued consumer shift to TV streaming, positions us well for when the ad market improves,” CEO Anthony Wood and CFO Steve Louden wrote in the shareholder letter.

Louden plans to leave Roku sometime in 2023 after helping recruit
and transition his role to a successor. Louden, who is based in Seattle, joined Roku in 2015 and led the company’s initial public offering
process in 2017.

The CFO had originally planned to leave in 2019 but decided to remain with the company. Throughout his tenure, Louden helped build a strong management team to support Roku’s expanding business objectives and operational complexity.

Regardless, the underwhelming fiscal results sent Roku shares tumbling down more than 18% in aftermarket trading.