Roku revenue came in above Wall Street forecasts for the fourth quarter of 2023 — and it touted new milestones of more than 80 million active accounts globally as of the end of last year and more than 100 billion hours streamed in 2023.
But shares of the streaming platform and connected-TV ad provider fell as Roku warned of a “challenging” environment for media and entertainment spending for the rest of 2024.
The company reported Q4 revenue of $984.4 million (up 14%) and a net loss of $78.3 million (55 cents per share) compared with a net loss of $237.1 million a year earlier. On average, Wall Street analysts expected revenue of $968.2 million and a net loss of 54 cents per share, according to LSEG data. Roku’s guidance for Q4 had been revenue of $955 million and a net loss of $85 million.
Roku, in its letter to shareholders, said it plans to increase revenue and free cash flow and achieve profitability over time. However, “we remain mindful of near-term challenges in the macro environment and an uneven ad market recovery. While we will face difficult [year over year] growth rate comparisons in streaming services distribution and a challenging M&E environment for the rest of the year, we expect to maintain our Q4 2023 YoY Platform growth rates in Q1,” the company said.
For the fourth quarter, Roku’s Platform revenue was $828.9 million, up 13%, which it said reflected “strong contributions from streaming services distribution activities and video advertising” that was offset by lower media and entertainment promotional spending. Average revenue per account was $39.92 in Q4 (on a trailing 12-month basis), down 4% year over year, which Roku said was due to a larger share of its active accounts in international markets “where we are currently focused on growing scale and engagement.”
Operating expenses in Q4 declined 12%, to $542 million. Last year company laid off about 500 employees and made other cost-cutting moves including consolidating office space and removing at least three dozen underperforming titles from the Roku Channel.
For Q1 of 2024, Roku is projecting total net revenue of $850 million (which would be up 15%), total gross profit of roughly $370 million and break-even adjusted EBITDA.
In after-hours trading Thursday, Roku stock dropped more than 15%. Earlier this week, Roku’s stock dropped nearly 9% after the Wall Street Journal reported that Walmart was in talks to acquire Vizio, a competitor to Roku in the connected-TV advertising business, for more than $2 billion.
In announcing the results, Roku boasted that it now has more than 80 million active accounts, a net increase of 10 million for 2023, while total streaming hours last year were a record 106.0 billion, up 18.6 billion hours (21%) from the year prior. For Q4, users streamed an average of 4.1 hours per day per account. Additionally, in the U.S., Roku’s active account base is now bigger than the subscribers of the six largest traditional U.S. pay-TV providers combined.
“As the leading TV streaming platform, Roku aims to make television better for everyone,” Anthony Wood, founder and CEO, said in a statement. “In a world where one day all TV will be streamed, we’re immensely proud to be the programmer of the home screen for more than 80 million active accounts around the globe, connecting people directly to what they love to watch.”
At the PvNew Entertainment Summit at CES last month, Roku Media president Charlie Collier also pushed the streaming company’s narrative that over the long term TV viewing is inevitably migrating to internet distribution. “We’re going to be the lead-in to most of television, if not all of television,”Collier, the former Fox Entertainment and AMC Networks exec whojoined Roku in 2022, said at the event.
