Roku Inc swings to a surprise profit in the fiscal fourth quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Feb 19, 2021
  • Roku Inc swings to a surprise profit in the fiscal fourth quarter.
  • The U.S. firm expects £352.25 million of revenue in Q1.
  • Roku shares jumped 3.5% in after-hours trading on Thursday.

Roku Inc. (NASDAQ: ROKU) said on Thursday that it swung to a surprise profit in the fiscal fourth quarter on the back of improved advertising spending.

Roku shares jumped about 3.5% in after-hours trading on Thursday but lost the gain later on. Including the price action, the stock is now trading at £323.60 per share versus £45.61 per share in March 2020, when the impact of the COVID-19 crisis was at its peak. Learn more about how to invest in the stock market.

Roku’s Q4 financial results versus analysts’ estimates

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Roku said that its profit in the fourth quarter came in at £48.09 million that translates to 35.01 pence per share. In the comparable quarter of last year, it had recorded £11.22 million of loss or 9.29 pence per share.

At £81.10 million, the San Jose-based company’s adjusted EBITDA in Q4 also jumped from last year’s £10.79 million. Roku said that it generated £464.36 million of revenue in the recent quarter versus the year-ago figure of £293.66 million.

According to FactSet, experts had forecast the company to post £442.28 million of revenue in the fourth quarter. They had expected Roku to note 3.57 pence of per-share loss and £30.72 million of adjusted EBITDA in Q4.  

As per Roku, revenue from its player business came in at £127.68 million while it registered at £336.67 million from its platform business. The U.S. firm’s average revenue per user (ARPU) in the fourth quarter printed at £20.55 compared to £16.53 last year.

As of the end of Q4, Roku had 51.2 million active accounts after 5.2 million net quarterly additions on a sequential basis. In the prior quarter (Q3), Roku reported £186.49 million of revenue.

Roku’s guidance for the fiscal first quarter

For the fiscal first quarter, the Nasdaq-listed company now forecasts its revenue to fall in the range of £341.53 million to £352.25 million. Roku expects up to £16.43 million of net loss in Q2. Analysts, on the other hand, are calling for £330.82 million of revenue and £37.15 million of net loss for the American publicly traded company in the current quarter.

Roku’s report comes a day after the chip-industry supplier, Applied Materials Inc., said that its financial performance was better than what analysts had anticipated in the fiscal first quarter.

Roku performed massively upbeat in the stock market last year with an annual gain of a little under 150%. At the time of writing, it is valued at £41.08 billion.

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