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Roku continues its transition from a hardware company to a company that makes money at a fast pace. The company revealed Wednesday that it surpassed $ 100 million in advertising and services revenue during its most recent quarter for the first time in its corporate history.
But while Roku's ad revenue grew by 74 percent year-over-year, its hardware revenue shows a much larger growth rate, to the tune of 9 percent, and its non-hardware Roku's share price is 9.5 percent in after-hours trading.
Roku generated revenue of $ 173.4 million compared to $ 124.78 million during the same quarter last year. Net losses came in at $ 11.7 million, compared to $ 7.89 million a year ago. This translates to $ 0.09 per share.
Analysts had expected revenue of $ 169.08 million and losses of $ 0.15 per share.
Roku especially called out video advertising as a key contributor to its growth, detailing that video ad revenue more than doubled year-over-year. Some of that could be attributed to the company's ad-supported Roku Channel, which is now among the top 5 free channels on its platform.
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However, video advertising also comes with a lower gross margin than that of Roku's other services and advertising products, resulting in a decline in price.
The company also reported that it had 23.8 million active accounts, up from 16.7 million a year ago. Streaming hours for the quarter were 6.2 trillion, compared to 3.8 trillion during the same quarter last year.
Roku executives called out smart TVs running Roku's operating system as a key contributor to the company's growth, writing in their letter to investors that "more than half of Roku TVs." Since the beginning of the year, more than 1 in 4 TVs sold in the US have been Roku TVs, according to the company.
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