We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
ROKU Gears Up to Report Q2 Earnings: What's in the Cards?
Read MoreHide Full Article
Roku (ROKU - Free Report) is set to report second-quarter 2021 results on Aug 4.
For second-quarter 2021, the company expects total net revenues of $615 million at the midpoint (up 73% year over year).
The Zacks Consensus Estimate for second-quarter revenues is pegged at $617.2 million, indicating 73.3% growth from the year-ago quarter reported figure.
Moreover, the consensus mark for earnings has remained steady at 13 cents per share in the past 30 days. The estimated figure indicates improvement of 137.1% year over year.
The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 447.3%.
Let’s see how things have shaped up prior to this announcement.
Roku’s second-quarter results are expected to benefit from steady active accounts growth at its free, ad-supported platform, The Roku Channel.
The ability to access free and premium content on the same platform has been a huge attraction for subscribers. On May 13, Roku announced the debut of 30 Roku originals. The lineup features 30 titles, including award-winning series such as Die-Hart, #FreeRayshawn and Reno 911!.
The company’s active accounts jumped 35% year over year to 53.6 million in first-quarter 2021. Moreover, ARPU increased 32% to $32.14 (on a trailing 12-month basis).
Notably, the Zacks Consensus Estimate for second-quarter active accounts and ARPU is pegged at $56 million and $35.23, respectively, indicating an increase of 30.2% and 41.4% from the year-ago reported figures.
The expected solid surge in active accounts and viewing may be due to growth in subscription signups, movie rentals and purchases as well as elevated revenues from increased device sales.
In the second quarter, Roku launched an upgraded Express 4K+ streaming device, Roku Voice Remote Pro and Roku Streambar Pro. The company also started rolling out the updated Roku OS 10 with visual surround features besides AirPlay 2 and HomeKit compatibility for its HD streaming devices.
Additionally, streaming hours growth is expected to have boosted TV streaming advertising on Roku’s platform. The consensus mark for streaming hours stands at 18.94 billion, implying an increase of 38% from the year-ago quarter’s reported figure.
The addition of Peloton app, Peloton Interactive’s virtual fitness platform for Roku streamers is also expected to have aided growth in streaming hours.
Further, the availability of streaming services — Apple TV+, Disney+ and Peacock streaming services — on Roku’s platform is expected to have aided Platform revenues, which accounted for 81.3% of revenues in the first quarter.
The consensus mark for Platform revenues is pegged at $500 million, indicating growth of 104.1% from the figure reported in the year-ago quarter.
Total platform gross profit is expected to be $300 million at the midpoint (up 104% year over year).
Improving Advertising Business to Aid Top Line
The growing popularity of The Roku Channel is expected to have attracted advertisers in the to-be-reported quarter.
The advertising business is expected to have witnessed resumption in video ad campaign, primarily from categories including travel, quick-serve restaurants and automotive among others that were severely hit by coronavirus-induced stay-at-home policies.
Moreover, Roku is expected to have benefited from advertising spend reallocation toward TV streaming as marketers accelerate their shift out of traditional TV and into TV streaming.
The launch of an advertising brand studio to produce new creative ad formats and TV programming tailored for marketers is expected to have attracted advertisers to the platform.
The strategic partnership with Nielsen to integrate complementary Nielsen ad and content measurement products into the Roku platform and further advance Nielsen ONE, the company’s cross-media measurement solution is expected to have been a key growth driver.
Product innovations in solutions like the Shopper Data Program with Kroger are expected to have driven monetized video ad impressions growth in the second quarter.
Further, increasing advertiser demand for new products offered by the company such as incremental reach guarantees and Roku’s OneView ad platform are expected to have been key catalysts.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Roku has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are a few companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release.
Image: Bigstock
ROKU Gears Up to Report Q2 Earnings: What's in the Cards?
Roku (ROKU - Free Report) is set to report second-quarter 2021 results on Aug 4.
For second-quarter 2021, the company expects total net revenues of $615 million at the midpoint (up 73% year over year).
The Zacks Consensus Estimate for second-quarter revenues is pegged at $617.2 million, indicating 73.3% growth from the year-ago quarter reported figure.
Moreover, the consensus mark for earnings has remained steady at 13 cents per share in the past 30 days. The estimated figure indicates improvement of 137.1% year over year.
The company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 447.3%.
Let’s see how things have shaped up prior to this announcement.
Roku, Inc. Price and EPS Surprise
Roku, Inc. price-eps-surprise | Roku, Inc. Quote
Factors to Consider
Roku’s second-quarter results are expected to benefit from steady active accounts growth at its free, ad-supported platform, The Roku Channel.
The ability to access free and premium content on the same platform has been a huge attraction for subscribers. On May 13, Roku announced the debut of 30 Roku originals. The lineup features 30 titles, including award-winning series such as Die-Hart, #FreeRayshawn and Reno 911!.
The company’s active accounts jumped 35% year over year to 53.6 million in first-quarter 2021. Moreover, ARPU increased 32% to $32.14 (on a trailing 12-month basis).
Notably, the Zacks Consensus Estimate for second-quarter active accounts and ARPU is pegged at $56 million and $35.23, respectively, indicating an increase of 30.2% and 41.4% from the year-ago reported figures.
The expected solid surge in active accounts and viewing may be due to growth in subscription signups, movie rentals and purchases as well as elevated revenues from increased device sales.
In the second quarter, Roku launched an upgraded Express 4K+ streaming device, Roku Voice Remote Pro and Roku Streambar Pro. The company also started rolling out the updated Roku OS 10 with visual surround features besides AirPlay 2 and HomeKit compatibility for its HD streaming devices.
Additionally, streaming hours growth is expected to have boosted TV streaming advertising on Roku’s platform. The consensus mark for streaming hours stands at 18.94 billion, implying an increase of 38% from the year-ago quarter’s reported figure.
The addition of Peloton app, Peloton Interactive’s virtual fitness platform for Roku streamers is also expected to have aided growth in streaming hours.
Further, the availability of streaming services — Apple TV+, Disney+ and Peacock streaming services — on Roku’s platform is expected to have aided Platform revenues, which accounted for 81.3% of revenues in the first quarter.
The consensus mark for Platform revenues is pegged at $500 million, indicating growth of 104.1% from the figure reported in the year-ago quarter.
Total platform gross profit is expected to be $300 million at the midpoint (up 104% year over year).
Improving Advertising Business to Aid Top Line
The growing popularity of The Roku Channel is expected to have attracted advertisers in the to-be-reported quarter.
The advertising business is expected to have witnessed resumption in video ad campaign, primarily from categories including travel, quick-serve restaurants and automotive among others that were severely hit by coronavirus-induced stay-at-home policies.
Moreover, Roku is expected to have benefited from advertising spend reallocation toward TV streaming as marketers accelerate their shift out of traditional TV and into TV streaming.
The launch of an advertising brand studio to produce new creative ad formats and TV programming tailored for marketers is expected to have attracted advertisers to the platform.
The strategic partnership with Nielsen to integrate complementary Nielsen ad and content measurement products into the Roku platform and further advance Nielsen ONE, the company’s cross-media measurement solution is expected to have been a key growth driver.
Product innovations in solutions like the Shopper Data Program with Kroger are expected to have driven monetized video ad impressions growth in the second quarter.
Further, increasing advertiser demand for new products offered by the company such as incremental reach guarantees and Roku’s OneView ad platform are expected to have been key catalysts.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Roku has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are a few companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release.
Avnet, Inc. (AVT - Free Report) has an Earnings ESP of +9.82% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Opendoor Technologies Inc. (OPEN - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #2.
Riot Blockchain, Inc. (RIOT - Free Report) has an Earnings ESP of +120.00% and a Zacks Rank #3.