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Roku Pops 30.7% on Rev Beat, Upbeat Guidance: ETFs to Gain
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Leading TV streaming platform provider Roku (ROKU - Free Report) reported third-quarter 2023 loss of $2.33 per share, wider than the Zacks Consensus Estimate of a loss of $2.16. The company had incurred a loss of 88 cents per share in the year-ago quarter.
Revenues increased 19.8% from the year-ago quarter’s level to $912.02 million and beat the consensus mark by 6.37%. Growth of The Roku Channel’s active accounts and streaming hours drove third-quarter performance.
For the fourth quarter, Roku expects revenue of roughly $955 million, topping the $952 million expected by Wall Street, according to LSEG, as quoted on CNBC.
Quarter Details
Active account net adds were 2.3 million in the third quarter, taking the total active accounts to 75.8 million globally, reflecting greater engagement and more monetization opportunities. Roku has become the No. 1 TV streaming platform by hours streamed in the United States, Canada and Mexico. Globally, users streamed a record of 26.7 billion hours in the third quarter, up 1.6 billion hours from the prior quarter.
The average revenue per user declined 7% from the prior-year quarter’s levels to $41.03 (on a trailing 12-month basis). For the seventh consecutive quarter, The Roku Channel was among the top five channels by both active account reach and streaming hour engagement on the Roku platform in the United States. The Roku Channel’s active accounts are approaching half of all broadband households in the United States.
Platform revenues (86.3% of revenues) increased 17.9% year over year to $786.8 million through strong contributions from content distribution and video advertising. Devices revenues (13.7% of revenues) rose 32.9% from the year-ago quarter’s level to $125.2 million.
The company was recognized as the Most Innovative Company for 2023 by Fast Company for its work in both hardware and software. This includes content partnership for The Roku Channel and Roku Voice Remote Pro. The company recently announced a partnership with NBCUniversal. It will boost the quality of content offered by Roku.
ETFs to Benefit
Roku surged 30.7% on Nov 2, 2023, with 6.5 times higher volume, reflecting the earnings strength. The stock has considerable exposure to several ETFs. Hence, ETF investors may also gain from the Roku’s share price surge.
ARK Innovation ETF (ARKK - Free Report) ) – Roku has 7.76% weight
This ETF is active and does not track a benchmark. ARKK is an actively managed Exchange Traded Fund (ETF) that seeks long-term growth of capital by investing under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the Fund’s investment theme of disruptive innovation. The fund charges 75 bps in fees. The fund jumped 8.4% on Nov 2, 2023.
ARK Next Generation Internet ETF (ARKW - Free Report) ) – Roku has 7.50% weight
This ETF is active and does not track a benchmark. ARKW is an actively managed ETF that seeks long-term growth of capital by investing under normal circumstances primarily (at least 80% of its assets) in domestic and U.S. exchange-traded foreign equity securities of companies that are relevant to the Fund’s investment theme of next generation internet. The fund charges 88 bps in fees. The fund jumped 7.3% on Nov 2, 2023.
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Roku Pops 30.7% on Rev Beat, Upbeat Guidance: ETFs to Gain
Leading TV streaming platform provider Roku (ROKU - Free Report) reported third-quarter 2023 loss of $2.33 per share, wider than the Zacks Consensus Estimate of a loss of $2.16. The company had incurred a loss of 88 cents per share in the year-ago quarter.
Revenues increased 19.8% from the year-ago quarter’s level to $912.02 million and beat the consensus mark by 6.37%. Growth of The Roku Channel’s active accounts and streaming hours drove third-quarter performance.
For the fourth quarter, Roku expects revenue of roughly $955 million, topping the $952 million expected by Wall Street, according to LSEG, as quoted on CNBC.
Quarter Details
Active account net adds were 2.3 million in the third quarter, taking the total active accounts to 75.8 million globally, reflecting greater engagement and more monetization opportunities. Roku has become the No. 1 TV streaming platform by hours streamed in the United States, Canada and Mexico. Globally, users streamed a record of 26.7 billion hours in the third quarter, up 1.6 billion hours from the prior quarter.
The average revenue per user declined 7% from the prior-year quarter’s levels to $41.03 (on a trailing 12-month basis). For the seventh consecutive quarter, The Roku Channel was among the top five channels by both active account reach and streaming hour engagement on the Roku platform in the United States. The Roku Channel’s active accounts are approaching half of all broadband households in the United States.
Platform revenues (86.3% of revenues) increased 17.9% year over year to $786.8 million through strong contributions from content distribution and video advertising. Devices revenues (13.7% of revenues) rose 32.9% from the year-ago quarter’s level to $125.2 million.
The company was recognized as the Most Innovative Company for 2023 by Fast Company for its work in both hardware and software. This includes content partnership for The Roku Channel and Roku Voice Remote Pro. The company recently announced a partnership with NBCUniversal. It will boost the quality of content offered by Roku.
ETFs to Benefit
Roku surged 30.7% on Nov 2, 2023, with 6.5 times higher volume, reflecting the earnings strength. The stock has considerable exposure to several ETFs. Hence, ETF investors may also gain from the Roku’s share price surge.
ARK Innovation ETF (ARKK - Free Report) ) – Roku has 7.76% weight
This ETF is active and does not track a benchmark. ARKK is an actively managed Exchange Traded Fund (ETF) that seeks long-term growth of capital by investing under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the Fund’s investment theme of disruptive innovation. The fund charges 75 bps in fees. The fund jumped 8.4% on Nov 2, 2023.
ARK Next Generation Internet ETF (ARKW - Free Report) ) – Roku has 7.50% weight
This ETF is active and does not track a benchmark. ARKW is an actively managed ETF that seeks long-term growth of capital by investing under normal circumstances primarily (at least 80% of its assets) in domestic and U.S. exchange-traded foreign equity securities of companies that are relevant to the Fund’s investment theme of next generation internet. The fund charges 88 bps in fees. The fund jumped 7.3% on Nov 2, 2023.