Roku’s business is growing faster than expected.
The maker of connected TV devices grew second-quarter revenue by 57 percent to nearly $157 million. It lost just 1 cent per share during the same three-month period.
Those results are much better than what Wall Street was anticipating for the company, which will celebrate one year as a public company in September. Roku was expected to report a loss of 15 cents per share on revenue of $141 million.
As a result of the strong quarter, the company is raising its outlook for the rest of 2018. It is anticipating revenue of $164 million to $172 million for the third quarter and full-year revenue of $710 million to $730 million.
Roku’s business is being helped along by the growth of revenue from its streaming video platform, on which it sells advertising. Platform revenue was up 96 percent during the period to $90.3 million. Player revenue — money earned through the selling of set-top boxes like the Roku player and the Roku Streaming Stick — was up 24 percent to $66.5 million.
“We continue to see strong engagement and monetization of our growing account base,” the company said in its earnings letter.
Roku reached 22 million active accounts during the quarter, up 46 percent from 15.1 million accounts during the same period last year. All told, people streamed 5.5 billion hours of programming on the Roku platform during the period.
This growth comes as Roku invests more heavily in providing curated programming to its users. Roku also announced Wednesday that it is expanding its Roku Channel, which offers a curated selection of free programming, to web browsers. This will make the content available to non-Roku owners and significantly increase the potential audience for the channel.
“Our goal is to keep expanding reach,” Wood said of the Roku Channel during a call with investors. He also noted that IP owners are attracted to being part of Roku Channel because “what’s going to matter to them is traffic and monetization.”
In a call with The Hollywood Reporter following the earnings disclosure, Wood said that Roku sees the free streaming space “as an underserved market.” He added that the company plans to continue to find new ways to distribute the Roku Channel off Roku platforms, in part because it can be used as a way to market the brand to new customers. “Someone that downloads the Roku app and watches the Roku Channel on their laptop might not be a Roku customer,” he noted. “They’ll learn about Roku. We’ll advertise to them.”
The company’s shares closed the day down less than 1 percent, or 17 cents, to $47.25. The shares were up more than 8 percent during after-hours trading.
