3 key takeaways from Roku’s Q1 earnings report

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in his free… read more.
on May 6, 2021
  • Roku Inc beats Wall Street estimates in the fiscal first quarter.
  • The U.S. company added 2.4 million new active accounts in Q1.
  • Roku expects up to £446.25 million revenue in current quarter.

Roku Inc. (NASDAQ: ROKU) reported its financial results for the fiscal first quarter on Thursday that beat Wall Street estimates. On the back of hawkish quarterly performance, the company also raised its guidance for Q2.

1. Financial performance

Roku said that its net income in the first quarter printed at £54.92 million that translates to 38.87 pence per share. In the comparable quarter of last year, it had posted £39.37 million of net loss, or 32.39 pence per share.

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The Los Gatos-based company generated £413.28 million of revenue in Q1 versus the year-ago figure of £230.90 million. Platform revenue, as per Roku, stood at £335.76 million in the recent quarter, and player revenue registered at £77.52 million.

According to FactSet, experts had forecast £354.12 million of sales for Roku in the first quarter and 9.36 pence of GAAP loss per share. In the prior quarter, the maker of digital media players had noted a surprise £48.09 million of profit.

2. Total active accounts

Roku now has total active accounts of 53.6 million after 2.4 million additions in Q1. Its platform reported 18.3 billion hours of streaming in the recent quarter versus 17 billion in Q4.

In separate news from the United States, exercise equipment and media company Peloton Interactive Inc said its sales surged 141% in the fiscal third quarter.

3. Guidance for the fiscal second quarter

For the fiscal second quarter, Roku now forecasts its revenue to fall in the range of £439.05 million to £446.25 million. FactSet consensus, on the other hand, stands at £395.86 million. In a letter to shareholders, the U.S. firm said:

“Advertisers continued to follow audiences and move budgets into TV streaming, with Roku’s monetised video ad impressions more than doubling year-over-year.”

Impact on the share price

Roku shares were reported roughly 8% up in after-hours trading on Thursday. Including the price action, the stock is now exchanging hands at £220.60 per share. In comparison, it had started the year 2021 at a higher £228.81 per share – a bad news for value investors.

Roku performed massively upbeat in the stock market last year with an annual gain of more than 125%, despite hitting a low of £54.79 per share in March 2020 when the impact of the COVID-19 crisis was at its peak. At the time of writing, the Nasdaq-listed company has a market cap of £27.08 billion.

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