The smart-TV pioneer is doing a lot of things right for a stock that is trading sharply lower in 2024. With Roku (ROKU -4.95%) shares trading sharply lower this year, it wasn't going to take a lot to get the stock moving after the company announced its second-quarter results following the market close on Thursday. Thankfully for investors, most of the newsy nuggets coming out of the financial update were upbeat. There was more to like than not like in the critical quarterly performance. Let's dig into the r ...

For the quarter ended June 2024, Roku (ROKU) reported revenue of $968.18 million, up 14.3% over the same period last year. EPS came in at -$0.24, compared to -$0.76 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $935.29 million, representing a surprise of +3.52%. The company delivered an EPS surprise of +46.67%, with the consensus EPS estimate being -$0.45. While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street ...

Financial Data and Key Metrics Changes - In Q2 2024, total net revenue increased by 14% year-over-year to $968 million, with platform revenue growing 11% year-over-year to $824 million [6][7] - Devices revenue surged by 39% year-over-year, driven by the expansion of retail distribution of Roku-branded TVs [7] - Adjusted EBITDA was $44 million, marking the fourth consecutive quarter of positive adjusted EBITDA and free cash flow [7][8] - Free cash flow on a trailing 12-month basis was $318 million, with cash and cash equivalents totaling $2.1 billion at the end of the quarter [7] Business Line Data and Key Metrics Changes - Streaming households reached 83.6 million, up 14% year-over-year, with streaming hours increasing by 20% year-over-year [6][7] - Engagement per account grew, with streaming hours per household per day rising to 4.0 hours from 3.8 hours year-over-year [6][7] - Platform gross margin was 53%, while devices gross margin was negative 11%, an improvement of six points year-over-year [7] Market Data and Key Metrics Changes - Roku maintained its position as the number one TV OS in the U.S. by both TV unit sales and hours streamed, with a share more than double that of the next largest operating system [4] - The Roku Channel was the third most popular app by reach and engagement, indicating strong user engagement [5] Company Strategy and Development Direction - The company aims to accelerate platform revenue growth by leveraging the Roku Home Screen as a lead-in for TV and maximizing ad demand [4][5] - Focus on monetization initiatives, including Roku-billed subscriptions and advertising activities, to drive future growth [5][9] - The company is optimistic about the second half of 2024, expecting advertising activities to accelerate despite challenges in the media and entertainment (M&E) vertical [14][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the M&E vertical but emphasized the strength of their diversified revenue streams and the unique advantages of being a streaming platform [11][12] - The company expects operational improvements to continue, with a low single-digit growth rate in operating expenses excluding impairment and restructuring charges [9] - Management is confident that platform revenue growth will begin to accelerate sequentially in Q4 2024 [9] Other Important Information - The company has made significant investments in new ad products and partnerships to enhance advertising capabilities and drive demand [12][19] - The integration of UID 2.0 is expected to improve targeting and data collaboration for advertisers, enhancing overall platform performance [20] Q&A Session Summary Question: Concerns about excess supply of PC inventory and downward pressure on CPMs - Management stated that Roku is not significantly impacted by market-driven pricing changes due to its diversified revenue streams and strong growth in streaming households and engagement [11][12] Question: Expectations regarding M&E - Management acknowledged ongoing challenges in the M&E vertical but expressed optimism about accelerating advertising activities and platform revenue growth [14][16] Question: Update on UID integration and expected demand lift - Management indicated that the partnership with Trade Desk has been well received and is expected to drive demand through enhanced targeting capabilities [20] Question: Future revenue mix and subscription growth - Management highlighted the goal of reaccelerating platform monetization and expanding third-party partnerships to increase demand for advertising and subscriptions [24] Question: Distribution revenue and 606 adjustments - Management confirmed that there was a 606 adjustment in Q2, similar to previous quarters, and discussed the challenges in comping against prior price increases [32] Question: Third-party ad sales strategy - Management explained that integrating with third-party partners is a strategic focus to enhance advertising capabilities and adapt to industry changes [36][37] Question: Retail strategy and distribution of Roku-branded TVs - Management reported strong growth in device sales and expansion of retail distribution, with expectations for continued growth in Roku-branded TVs [46][47] Question: Impact of political advertising and Olympics on revenue - Management expressed confidence in the advertising business, particularly with political ads and partnerships for the Olympics, which are expected to drive engagement and revenue [52][53]

Roku (ROKU) came out with a quarterly loss of $0.24 per share versus the Zacks Consensus Estimate of a loss of $0.45. This compares to loss of $0.76 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 46.67%. A quarter ago, it was expected that this video streaming company would post a loss of $0.64 per share when it actually produced a loss of $0.35, delivering a surprise of 45.31%. Over the last four quarters, the company has s ...

Financial Performance - Total net revenue for Q2 2024 was $968 million, representing a 14% year-over-year increase[2] - In Q2 2024, Roku's total net revenue reached $968.2 million, a 14.3% increase from $847.2 million in Q2 2023[20] - Total revenue for Q2 2024 was $688 million, a decrease of 1% compared to $696 million in Q2 2023[21] - The company reported a net loss of $33.9 million in Q2 2024, an improvement from a net loss of $107.6 million in Q2 2023[20] - Net loss for the six months ended June 30, 2024, was $84.8 million, significantly improved from a net loss of $301.2 million in the same period last year[22] - Adjusted EBITDA for Q2 2024 was $43.6 million, compared to a negative $17.8 million in Q2 2023[25] - Free cash flow for the trailing twelve months (TTM) was $317.9 million, showing a significant recovery from a negative $169.3 million in the previous TTM[27] Revenue Breakdown - Platform revenue reached $824 million in Q2 2024, up 11% year-over-year[2] - Platform revenue for Q2 2024 was $824.3 million, up 10.8% year-over-year from $743.8 million[20] - Devices revenue increased to $143.8 million in Q2 2024, compared to $103.4 million in the same quarter last year, reflecting a 38.9% growth[20] User Engagement - Streaming Households grew to 83.6 million, with a net increase of 2.0 million from Q1 2024[2] - Streaming Hours totaled 30.1 billion, an increase of 5.0 billion hours year-over-year, reflecting a 20% growth[2] - The Roku Channel's Streaming Hours increased nearly 75% year-over-year, driven by the Home Screen's features[7] - The Roku Sports Experience saw Streaming Hours originating from it more than triple year-over-year[6] Future Outlook - Roku expects Q3 2024 net revenue to grow 24% year-over-year, estimating $1.010 billion[13] - For Q4 2024, Roku anticipates sequential acceleration in platform revenue growth, driven by increased ad demand and subscriptions[13] Advertising and Monetization - Roku is focusing on increasing subscriptions billed through Roku Pay, enhancing monetization opportunities[10] - The Roku Home Screen reaches over 120 million U.S. households daily, providing significant advertising opportunities[12] - Roku's new video ad unit on the Home Screen sold out in its first month of beta testing, indicating strong demand from advertisers[13] - The company is expanding partnerships with third-party ad platforms to enhance targeting and measurement capabilities[13] Financial Position - Cash and cash equivalents at the end of the period increased to $2.1 billion, up from $1.8 billion a year ago[23] - Total current assets decreased to $2.98 billion as of June 30, 2024, down from $3.07 billion at the end of 2023[21] - Total liabilities decreased to $1.71 billion from $1.94 billion at the end of 2023, reflecting a reduction in current liabilities[21] - The company reported a decrease in accounts receivable to $669.1 million as of June 30, 2024, down from $816.3 million at the end of 2023[21] Expenses - Stock-based compensation expense for the six months ended June 30, 2024, was $183 million, slightly lower than $186 million in the same period last year[25] - Research and development expenses for the six months ended June 30, 2024, totaled $70.9 million, compared to $73.5 million in the same period last year[21] Profitability - Roku's gross profit for Q2 2024 was $424.7 million, a 12.3% increase from $378.3 million in Q2 2023[20] - Platform gross margin was 53% in Q2 2024, consistent with the previous year[9]

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Core Viewpoint - Roku was a significant beneficiary during the early COVID-19 pandemic, with its stock reaching nearly $500 at its peak, but it has since declined by approximately 88% from those highs, raising questions among investors about its future performance [1]. Company Summary - Roku's stock performance peaked during the pandemic, indicating strong demand for streaming services during that period [1]. - The current stock price reflects a substantial decline, leading to investor uncertainty regarding the company's ability to recover to previous highs [1].

Group 1 - Analysts expect 'Net Revenue- Platform' to be $807.84 million, indicating an increase of +8.6% year over year [1] - Roku is projected to report a quarterly loss of $0.45 per share, which represents a 40.8% increase year over year [2] - Revenue projections for Roku are set at $935.29 million, reflecting a 10.4% increase from the same quarter last year [2] Group 2 - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analysts' assessments [3] - Revisions to earnings estimates are crucial for predicting investor actions regarding the stock, as there is a strong correlation between earnings estimate trends and short-term price performance [4] Group 3 - Analysts estimate 'Net Revenue- Devices' at $127.44 million, suggesting a year-over-year change of +23.3% [6] - The estimated 'Active Accounts' are projected to reach 82.99 million, up from 73.5 million in the same quarter last year [6] - The estimated 'ARPU' is $40.62, slightly down from $40.67 a year ago [6] Group 4 - 'Streaming Hours' are projected to reach 30.11 billion, compared to 25.1 billion in the same quarter last year [7] - Analysts predict 'Gross Profit- Platform' will be $428.08 million, up from $395.83 million in the same quarter last year [7] Group 5 - Roku shares have decreased by -1.5% in the past month, while the Zacks S&P 500 composite has moved -0.2% [8] - Roku holds a Zacks Rank 3 (Hold), indicating it is expected to closely follow overall market performance in the near term [8]

Thes stocks could make a comeback, and soon. Streaming is changing, and this company is leading the way What changed recently is the shift toward an ad-supported model similar to broadcast TV. Streaming doesn't have to be the premium experience that makes cord-cutting more difficult for viewers accustomed to free TV, and Roku (ROKU 2.77%) is a leader in ad-supported streaming. But these concerns appear to be overblown. Roku continues to grow its operations and has remained the leader despite spirited compet ...

Whatever happens next week in the earnings report, the stock is likely to swing big one way or the other. Roku can't catch a break Weakness in the streaming sector weighed on Roku. Roku stock has been eating dirt since the pandemic's height. It ramped up spending at the wrong time and is still trying to rebalance its cost structure and show investors it can be sustainably profitable. At the same time, a report from Comcast showed that its Peacock streaming service is losing subscribers, with total subs down ...