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ROKU's Q2 Earnings Beat, Revenues Ride on Strong Ad Growth
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Roku (ROKU - Free Report) reported second-quarter 2021 earnings of 52 cents per share compared with the Zacks Consensus Estimate of 14 cents per share. The company had reported a loss of 35 cents per share in the year-ago quarter.
Revenues soared 81.2% from the year-ago quarter’s level to $645.1 million and beat the consensus mark by 4.5%.
In the second quarter, Roku’s monetized video ad impressions more than doubled on a year-over-year basis. Number of advertisers outside the Ad Age 200 grew more than 50% year over year.
Active accounts jumped 28% year over year to 55.1 million, driven by the popularity of Roku streaming players and Roku TV models. Streaming Hours jumped 19% year over year to 17.4 billion.
Moreover, average revenue per user (ARPU) grew 46% to $36.46 (on a trailing 12-month basis).
Quarter Details
Platform revenues (82.5% of revenues) surged 117.4% year over year to $532.3 million, driven by significant increases in both content distribution activities and advertising.
Availability of third-party streaming channels on the Roku platform, including Discovery+, Disney’s (DIS - Free Report) Disney+, HBO Max, ViacomCBS’ Paramount+, Comcast’s (CMCSA - Free Report) NBCUniversal, as well as Peacock, Amazon Prime Video, AppleTV+, Hulu, and Netflix, besides continued investments in The Roku Channel, contributed to engagement growth in the second quarter of 2021.
Player revenues (17.5% of revenues) increased 1.3% from the year-ago quarter’s levels to $112.8 million.
As a percentage of total revenues, gross margin expanded to 52.4% from 41.2% in the year-ago quarter.
Operating expenses, as a percentage of revenues, decreased to 41.7% from the year-ago quarter’s 53.1%.
Sales & marketing, research & development (R&D) and general & administrative (G&A) expenses contracted 350 basis points (bps), 610 bps and 170 bps, respectively.
In the second quarter, adjusted EBITDA came in at $122.4 million against EBITDA loss of $3.4 million in the year-ago quarter.
Operating income was $69.1 million in the reported quarter. The company had reported an operating loss of $42.2 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2021, cash and cash equivalents, including short-term investments, were $2.08 billion compared with $2.07 billion as of Mar 31, 2021.
Guidance
For third-quarter 2021, Roku expects total net revenues between $675 million and $685 million. Gross profit is anticipated between $315 million and $325 million. The company expects adjusted EBITDA in the $60-$70 million band.
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ROKU's Q2 Earnings Beat, Revenues Ride on Strong Ad Growth
Roku (ROKU - Free Report) reported second-quarter 2021 earnings of 52 cents per share compared with the Zacks Consensus Estimate of 14 cents per share. The company had reported a loss of 35 cents per share in the year-ago quarter.
Revenues soared 81.2% from the year-ago quarter’s level to $645.1 million and beat the consensus mark by 4.5%.
In the second quarter, Roku’s monetized video ad impressions more than doubled on a year-over-year basis. Number of advertisers outside the Ad Age 200 grew more than 50% year over year.
Active accounts jumped 28% year over year to 55.1 million, driven by the popularity of Roku streaming players and Roku TV models. Streaming Hours jumped 19% year over year to 17.4 billion.
Roku, Inc. Price, Consensus and EPS Surprise
Roku, Inc. price-consensus-eps-surprise-chart | Roku, Inc. Quote
Moreover, average revenue per user (ARPU) grew 46% to $36.46 (on a trailing 12-month basis).
Quarter Details
Platform revenues (82.5% of revenues) surged 117.4% year over year to $532.3 million, driven by significant increases in both content distribution activities and advertising.
Availability of third-party streaming channels on the Roku platform, including Discovery+, Disney’s (DIS - Free Report) Disney+, HBO Max, ViacomCBS’ Paramount+, Comcast’s (CMCSA - Free Report) NBCUniversal, as well as Peacock, Amazon Prime Video, AppleTV+, Hulu, and Netflix, besides continued investments in The Roku Channel, contributed to engagement growth in the second quarter of 2021.
Moreover, this Zacks Rank #2 (Buy) company benefited from advertising spend reallocation toward TV streaming from traditional TV. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Player revenues (17.5% of revenues) increased 1.3% from the year-ago quarter’s levels to $112.8 million.
As a percentage of total revenues, gross margin expanded to 52.4% from 41.2% in the year-ago quarter.
Operating expenses, as a percentage of revenues, decreased to 41.7% from the year-ago quarter’s 53.1%.
Sales & marketing, research & development (R&D) and general & administrative (G&A) expenses contracted 350 basis points (bps), 610 bps and 170 bps, respectively.
In the second quarter, adjusted EBITDA came in at $122.4 million against EBITDA loss of $3.4 million in the year-ago quarter.
Operating income was $69.1 million in the reported quarter. The company had reported an operating loss of $42.2 million in the year-ago quarter.
Balance Sheet & Cash Flow
As of Jun 30, 2021, cash and cash equivalents, including short-term investments, were $2.08 billion compared with $2.07 billion as of Mar 31, 2021.
Guidance
For third-quarter 2021, Roku expects total net revenues between $675 million and $685 million. Gross profit is anticipated between $315 million and $325 million. The company expects adjusted EBITDA in the $60-$70 million band.