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Roku had a strong spring, adding more new active accounts during the second quarter than it has in almost every other period.
The company, which sells connected TV devices and TV sets, grew its base of active accounts by 41 percent to 43 million, the company revealed Wednesday. Streaming time on its devices grew by 65 percent to 14.6 billion hours.
“The re-platforming of TV to streaming has accelerated,” the company said in a letter to shareholders. “We believe that Roku’s products and services are more relevant than ever, that we are an essential partner to content owners who want to reach large streaming audiences, and that our modern tools and incremental reach over linear TV drive great results for brands.”
Roku’s total revenue for the quarter was $356 million, up 41 percent year-over-year. It lost $19.1 million during the period.
Though Roku makes most of its money from advertising sales on its platform, it still relies on device sales to fuel the growth of that userbase. The company said the growth in active accounts was driven by “strong sales” of both its players and connected TV sets. Existing Roku users also added nearly 3 million new devices to their accounts during the period.
Roku’s strong quarter comes after a period in which the company has been locked in negotiations with WarnerMedia and NBCUniversal over bringing their HBO Max and Peacock services, respectively, to its platform. Roku didn’t acknowledge the discussions in its shareholder letter but did note that “continued strong growth in streaming hours reinforces Roku’s role as an essential distribution partner for content owners who want to scale rapidly.”
Asked during a call with investors about why the services aren’t available on Roku, CEO Anthony Wood said the company is looking to “establish a win-win relationship” with content partners. He didn’t go into details on the negotiations with WarnerMedia and NBCU but pointed to Roku’s partnership with Disney+, noting that Roku was the largest streaming platform for viewing of the service’s Hamilton film in July. “We’re proud that we can help them,” he said, adding that the company has “built a lot of tools to help them acquire customers.”
As people have spent more time at home, demand for Roku’s devices increased. The company said it has largely managed to keep its products in stock but, due to tight inventory, ran fewer promotions than usual, boosting margins on its players.
Roku disclosed that it has raised $350 million in equity capital to offer it more flexibility during the pandemic.
The did not offer guidance for the third quarter of the year, citing the “variable and uncertain” nature of the short-term outlook. It added that it does not expect TV ad spending to recover from a coronavirus-related depression until 2021. Roku still expects to grow its overall revenue year-over-year but “not as strongly as we had anticipated prior to the pandemic.”
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