Roku, which co-created the subscription streaming video market with Netflix, Nov. 6 reported a third-quarter (ended Sept. 30) net loss of $25.1 million, widened 164% from a net loss of $9.5 million during the previous-year period.
The company attributed the red ink to increased spending on marketing aimed at attracting user/subscribers.
Revenue increased more than 50% to $261 million from $173.4 million last year. Notable drivers included platform revenue, which increased 79% to $179.3 million compared to $100.1 million last year.
Platform revenue includes The Roku Channel featuring ad-supported programming.
Roku said active accounts increased by more than 1.7 million to 32.3 million, while streaming hours increased 0.9 billion hours to 10.3 billion. Average revenue per user (ARPU) reached $22.58, up 30% year-over-year. Roku’s monetized video ad impressions more than doubled from the previous-year period. Player revenue increased 11% to $81.6 million from $73.3 million last year.
“We continue to execute well against our long-term strategic plan as the TV market shifts to streaming,” founder/CEO Anthony Wood and CFO Steve Louden wrote in the shareholder letter.
The executives said Roku’s “business momentum” makes the platform an essential partner for content publishers and advertisers.
“This is evident in the launch of major new streaming services on our platform and by the growth in the number of advertisers who work with Roku,” they wrote.
“We expect platform revenue to represent roughly two-thirds of total revenue including approximately $13 million in revenue from Dataxu,” Wood and Louden wrote.
The company also revised its fiscal 2019 outlook downward, reflecting continued investment in the business as well as an approximate $5 million hit to Q4 pre-tax earnings related to Dataxu-acquisition-related expenses.
Last month,Roku acquired Boston-based Dataxu, an online video ad platform for $150 million in cash and stock.
Wall Street wasn’t impressed, sending Roku shares down more than 14% in after-market trading.