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TV platform streaming Roku(NASDAQ: ROKU) Thursday released its financial results for the fourth quarter, and investors were clearly impressed. The company's core operating indicators continued to move in the right direction, while the advertising sector recorded strong growth. Part of this was already known, with Roku providing preliminary estimates of active accounts and hours spent in early January.
With good performance on many fronts, Roku now expects to achieve $ 1 billion in revenue in 2019.
Source of the image: Roku.
Increase the audience while strengthening the monetization
Total fourth-quarter revenue jumped 46% to $ 275.7 million, exceeding the company's highest forecast of $ 265 million. In this segment, revenue from highly profitable platforms rose nearly 80% to $ 151.4 million. This segment continues to account for the vast majority of Roku's overall gross profits – 97%, to be precise, in the fourth quarter. Volumes of player units increased by 30%, while average selling prices (ASP) dropped by 8%, while affordable players (under $ 50) continue to be sellers popular.
The number of active accounts reached 27.1 million and Roku released 7.3 billion hours of content during the quarter. The average revenue per user (ARPU), calculated by dividing the turnover of the platform of the last 12 months (TTM) by the number of active accounts, was increased to $ 17.95. The platform segment is mainly made up of advertising, so that the advertising activity of Roku behaves extremely well. According to the company, the number of video ad impressions has more than doubled in 2018.
In other words, Roku continues to grow its audience (growth of active accounts) while strengthening the monetization of this audience (ARPU earnings). It's a powerful combination that advances the company. Roku said last month that he was embarking on premium subscriptions, selling access to popular channels such as CBS& # 39; Showtime & LionsgateStarz, among others, while getting a reduction in these sales. This initiative could reinforce the current dynamism of the platform segment.
Adjusted EBITDA increased 70% to $ 24.5 million and non-GAAP net income was $ 0.05.
Hit $ 1 billion
Roku's advice also exceeded expectations. The company expects total revenues in 2019 to exceed $ 1 billion for the first time, up from $ 742.5 million in 2018. This is slightly higher than sales of $ 985.2 million. dollars that the street was waiting for this year.
Platform revenue is expected to account for about two-thirds of sales and gross margin is expected to increase from $ 445 million to $ 450 million. Roku, however, is still waiting to lose between $ 80 and $ 90 million.
For the first quarter alone, revenues are expected to be in the range of $ 185 million to $ 190 million, which is generally comparable to the current forecast of $ 188 million. The gross margin for this quarter is expected to be between $ 86 and $ 90 million, with a net loss of $ 28 to $ 32 million.
Evan Niu, CFA does not hold any of the shares mentioned. The Motley Fool owns shares and recommends LGF-A and LGF-B. The Motley Fool is short shares of CBS. Motley Fool has a disclosure policy.
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