Roku Shares Jumped 30% As All-Time High Subscriber Numbers Stoked Revenue Beat

Roku products are displayed on a shelf at a Best Buy store on February 18, 2022 in San Rafael, California.

Justin Sullivan / Staff / Getty Images

Key Takeaways

  • Roku shares skyrocketed by more than 30% in trading Thursday after the company posted better-than-expected revenue and accounts growth in the third quarter.
  • The streaming device company said it had a net increase of 16% in active accounts for the quarter, reaching an all-time high of 75.8 million.
  • Roku said content distribution, video advertising, and the company's new branded line of TVs helped to drive growth.
  • Net losses per share nearly tripled compared with the prior-year quarter, reaching $2.33.
  • Roku said in September that it would reduce its workforce by 10% to cut costs.

Roku Inc. (ROKU) shares spiked by more than 30% in trading Thursday after the streaming device and TV maker reported earnings results well ahead of analyst predictions for the third quarter alongside strong subscriber growth.

For the third quarter, Roku achieved an all-time high of 75.8 million active accounts, a net increase of 16% compared with the prior-year quarter. This represents a net increase of 2.3 million accounts over the second quarter of this year. Analysts had expected active accounts to reach 75.3 million for the third quarter.

Roku's revenue growth also outpaced analyst estimates. The company reported a 20% year-over-year increase, reaching $912 million for the quarter, against predictions of $855 million.

Roku said the better-than-expected revenue improvement was driven by "strong performance in content distribution and video advertising." The company's Roku TV line, which launched in March, also contributed to revenue gains and helped to drive net active account additions.

An industry-wide slowdown in ad spending did not have as significant an impact on Roku's ad sales as expected.

Roku's net losses widened significantly, to $330.1 million for the quarter compared to $122.2 million in the prior-year quarter. Losses per share nearly tripled to $2.33. In September, the company announced plans to lay off 360 employees, representing 10% of its total workforce, in an effort to reduce costs.

Although average revenue per user (ARPU) declined by 7% YOY, overall streaming hours were up more than 22% in the same time period.

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  1. Roku Inc. "3Q2023 Shareholder Letter."

  2. CNBC. "Roku stock soars 18% on third-quarter revenue beat, solid outlook."

  3. Yahoo! Finance. "Roku forecasts strong revenue on subscriber, ad strength; shares jump 17%."

  4. U.S. Securities and Exchange Commission. "Form 8-K, Roku, Inc."

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