Roku Inc. benefited from improved advertising spending in the fourth quarter, while also delivering a surprising profit for the period.
The company posted a profit of $ 67.3 million in the fourth quarter, or 49 cents per share, on Thursday, compared to a loss of $ 15.7 million, or 13 cents per share, a year earlier. Analysts polled by FactSet expect a loss of 5 cents per share.
Roku, Brazil
adjusted earnings before interest, tax, depreciation and amortization (Ebitda) of $ 113.5 million, compared to $ 15.1 million a year before and before the FactSet Consensus, which demanded $ 43 million.
Shares rose 2.8% on Thursday.
Revenue for the fourth quarter increased to $ 649.9 million from $ 411 million, while analysts asked for $ 619 million. The company generated $ 178.7 million in revenue from its gaming business and $ 471.2 million in revenue from its platform business, which includes licensing and advertising.
“Despite a slowdown in pandemic advertising in the US, our advertising industry has been resilient, with the Q4 version of Roku earning revenue from video advertising more than doubling year-on-year as advertisers increase users from traditional pay-TV to streaming, ‘the company said in its letter to shareholders.
Roku noted in the letter that the six largest agency management companies more than doubled their investment in Roku during the fourth quarter compared to a year earlier, ‘while also committing themselves to significantly larger 2021 fronts with Roku.’
Roku’s average revenue per user was $ 28.76, compared to $ 23.14 a year earlier.
The company released 51.2 million active accounts as of the fourth quarter after adding successive net 5.2 million accounts. Roku users streamed 17 billion hours of content during the quarter.
Roku revealed that The Roku Channel, which collects ad-supported content on the platform, more than doubled its reach during the fourth quarter, and its use grew almost twice as fast as the overall Roku platform.
The company announced earlier this year that it would acquire a catalog of original programming from Quibi, which Roku plans to exhibit on The Roku Channel. Chief Financial Officer Steve Louden said in a media call with reporters following Roku’s earnings report that the company, as the scope of the platform increases, ‘will continue to look at different ways to keep content on board. ‘in a way that matches the company’s ad-supported video-on-demand model.
“We just have more options now that we’re bigger,” he continued.
For the first quarter, Roku expects revenue of $ 478 million to $ 493 million. The company plans a net loss of $ 16 million to $ 23 million. Analysts forecast $ 463 million in revenue and a net loss of $ 52 million.
Looking at the full year, Roku did not want to give a quantitative forecast, but investors said in their shareholder letter that it would expect stronger comparisons in the first half of the year, given the COVID-19 impact in the early part of last year, and stricter comparisons in the second half of the year.
“So, for the full year, our overall revenue growth will fall year-on-year to below the levels we expect in the first and second quarters of 2021,” Roku said in the letter.
Shares of Roku have risen 95% over the past three months compared to the S&P 500 SPX,
increased by 9.7%.