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It has been suffering due to a challenging macroeconomic environment.
Roku faces immense competition from existing local traditional pay TV services and products, including those provided by incumbent pay TV service providers and mobile streaming platforms. Companies, such as Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report) , offer TV streaming devices that compete with ROKU’s streaming players and Roku TV.
Additionally, Google and Amazon license their respective operating system for integration into smart TVs. Roku’s Smart Soundbar and Wireless Subwoofer face additional competition from makers of TV audio speakers and sound bars, as well as peripheral devices.
Moreover, the industry-wide trend of declining profitability due to regular technology upgrades requires continued investments. The development of these new products and platforms is putting margins under pressure by increasing operating costs.
This Zacks Rank #4 (Sell) company’s first-quarter performance is expected to have benefited from the growing popularity of The Roku Channel, expanding TV brands & retailer partner base and third-party streaming channels.
In the to-be-reported quarter, the company announced the launch of its latest Roku Pro Series TVs, further expanding the lineup of award-winning televisions to bring more choices to consumers. This is expected to have boosted ROKU’s top line in the first quarter of 2024.
Active account net adds were 4.2 million in the fourth quarter, making a total of 80 million active accounts globally, driven primarily by the Roku TV licensing program in the United States and international markets. This trend is expected to have continued in the to-be-reported quarter.
Our model estimate for active accounts is pegged at 81.4 million, indicating growth of 1.75% from the figure reported in the year-ago quarter.
ROKU has become the No. 1 TV selling operating system in the United States and Mexico. Globally users streamed 29.1 billion hours, up 21.7% year over year in the fourth quarter. Our model estimate for streaming hours is pegged at 30.29 billion, indicating growth of 20.7% from the figure reported in the year-ago quarter.
In the fourth quarter, the average revenue per user (ARPU) declined 4% from the prior-year quarter’s levels to $39.92 (on a trailing 12-month basis). Our model estimate for ARPU is pegged at $40.24, indicating a decline of 1% from the figure reported in the year-ago quarter.
Earnings Expectations
For first-quarter 2024, Roku expects total net revenues of $850 million, total gross profit of roughly $370 million and break-even adjusted EBITDA.
The consensus mark for revenues is pegged at $850.97 million, indicating 14.84% growth from the year-ago quarter’s reported figure.
For the quarter to be reported, the Zacks Consensus Estimate for loss per share has decreased 4 cents to 64 cents in the past 30 days. The figure suggests a 53.62% increase from the year-ago quarter’s reported figure.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average earnings surprise being 13.08%.
Image: Bigstock
ROKU Gears Up to Report Q1 Earnings: Here's What to Expect
Roku (ROKU - Free Report) is set to report first-quarter 2024 results on Apr 25.
It has been suffering due to a challenging macroeconomic environment.
Roku faces immense competition from existing local traditional pay TV services and products, including those provided by incumbent pay TV service providers and mobile streaming platforms. Companies, such as Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) and Alphabet (GOOGL - Free Report) , offer TV streaming devices that compete with ROKU’s streaming players and Roku TV.
Additionally, Google and Amazon license their respective operating system for integration into smart TVs. Roku’s Smart Soundbar and Wireless Subwoofer face additional competition from makers of TV audio speakers and sound bars, as well as peripheral devices.
Moreover, the industry-wide trend of declining profitability due to regular technology upgrades requires continued investments. The development of these new products and platforms is putting margins under pressure by increasing operating costs.
Roku, Inc. Price and EPS Surprise
Roku, Inc. price-eps-surprise | Roku, Inc. Quote
This Zacks Rank #4 (Sell) company’s first-quarter performance is expected to have benefited from the growing popularity of The Roku Channel, expanding TV brands & retailer partner base and third-party streaming channels.
In the to-be-reported quarter, the company announced the launch of its latest Roku Pro Series TVs, further expanding the lineup of award-winning televisions to bring more choices to consumers. This is expected to have boosted ROKU’s top line in the first quarter of 2024.
Active account net adds were 4.2 million in the fourth quarter, making a total of 80 million active accounts globally, driven primarily by the Roku TV licensing program in the United States and international markets. This trend is expected to have continued in the to-be-reported quarter.
Our model estimate for active accounts is pegged at 81.4 million, indicating growth of 1.75% from the figure reported in the year-ago quarter.
ROKU has become the No. 1 TV selling operating system in the United States and Mexico. Globally users streamed 29.1 billion hours, up 21.7% year over year in the fourth quarter. Our model estimate for streaming hours is pegged at 30.29 billion, indicating growth of 20.7% from the figure reported in the year-ago quarter.
In the fourth quarter, the average revenue per user (ARPU) declined 4% from the prior-year quarter’s levels to $39.92 (on a trailing 12-month basis). Our model estimate for ARPU is pegged at $40.24, indicating a decline of 1% from the figure reported in the year-ago quarter.
Earnings Expectations
For first-quarter 2024, Roku expects total net revenues of $850 million, total gross profit of roughly $370 million and break-even adjusted EBITDA.
The consensus mark for revenues is pegged at $850.97 million, indicating 14.84% growth from the year-ago quarter’s reported figure.
For the quarter to be reported, the Zacks Consensus Estimate for loss per share has decreased 4 cents to 64 cents in the past 30 days. The figure suggests a 53.62% increase from the year-ago quarter’s reported figure.
The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average earnings surprise being 13.08%.
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