Roku Q4 Earnings: Edging Wall Street Revenue Expectations, Streaming Giant Passes 80 Million Active Accounts

Roku edged Wall Street expectations for revenue and matched them on the bottom line, also reporting it hit 80 million active accounts by the end of 2023.

Revenue in the fourth quarter, which ended December 31, came in at $984.4 million, better than the Street’s consensus estimate of $964.2 million. The loss of 55 cents a share narrowed from the $1.70 recorded in the year-earlier period.

In addition to the 80 million active accounts globally, Roku also said 2023 marked its first year with more than 100 billion streaming hours.

Platform revenue, the category that includes advertising, rose 13% to $829 million in Q4, with the company crediting streaming services distribution activities and video advertising. Lower media and entertainment promotional spend (in part due to the dual strikes) offset the positives. Platform gross margin was flat at 55%.

Average revenue per user, a key streaming metric, fell 4% year-over-year, to $39.92 in the quarter. The drop was blamed on an increasing share of active accounts being in non-U.S. markets, where the company is focused on growing scale and engagement, even if near-term revenue isn’t as robust.

In its quarterly letter to shareholders, Roku flagged one key trend about the streaming sector overall: the embrace of advertising. In the quarter and 2023, streaming services distribution activities grew faster than platform revenue overall, the company wrote, “benefiting from increases in both subscription sign-ups and prices. As subscription prices increase, we believe consumers will seek savings via ad-supported subscriptions that have been launched by the major streaming services in the U.S. We believe these launches, along with growing consumer adoption, will be a catalyst within the industry for the shift of ad dollars from traditional TV to streaming. Roku is well-positioned to benefit from this shift due to our significant scale” and product tools designed to increase engagement.