Roku’s First-Quarter results have been launched this Thursday, bringing more contentment than expected stock estimates.
Roku CEO Anthony Wood and CFO Dan Jedda said, “We are pleased with our Q1 results, particularly the third consecutive quarter of positive Adjusted EBITDA and Free Cash Flow” in their shareholder letter.
With that, they also added their unity in a note, “We believe this demonstrates our operating discipline and leverage.” So, overall, it was a positive outcome in which the advertising company reached over 81.6 million Roku households, which is actually an uptrend of more than 1.6 million active accounts than the Q4 FY23 earnings.
However, as a black spot, the ad-supported offerings ruin Roku shares at about 3% in the recent Q1 results. In particular, Netflix’s streaming service has increased its prices to focus on ad-supported offerings. Like two strings in one’s bow, Netflix also aims to increase subscriber growth simultaneously.
As a testimony to this loss, “difficult year-over-year growth rate comparisons within streaming service distribution activities. This headwind is due to the past price increases and a higher mix shift toward ad-supported offerings,” said Roku’s executives.
Roku’s January – March quarter and the Q2 forecast predictions are far more than the Street estimates. That is mostly contributed by commercial sales and the switch from cable TV to streaming.
The net revenue of the first quarter is around $881.5 million, which is more than the LSEG’s $848.6 million. Soon, Roku expects that the second-quarter revenue will be $935 million, which is more than the average estimate of $931.4 by analysts.
As a closing line, Roku’s upcoming Q2 will determine whether it will compensate for the lost share.
