Losses at Roku surge to $43.1 million

Roku users streamed 14.6 billon hours of content in the second quarter, helping the streaming-media company post better-than-expected revenue despite weakness in the television advertising market.

Shares were down 0.4% in after-hours trading Wednesday.

The company reported a net loss of $43.1 million, or 35 cents a share, compared with a loss of $9 million, or 8 cents a share, in the year-earlier quarter. Analysts surveyed by FactSet were expecting a 52-cent loss per share.

Roku ROKU, -0.61% saw revenue for the quarter surge to $356.1 million from $250 million, while analysts had been modeling $316 million. The company’s sales consisted of $111.3 million from its player business and $244.8 million from its platform business, which includes advertising and licensing of its smart-TV operating system.

The average revenue per user rose to $24.92 from $21.06 in the year-prior period.

Roku’s 14.6 billion streaming hours in the quarter increased from 9.4 billion hours a year earlier, and the company saw active accounts climb to 43 million. That was up from 39.8 million in the March quarter and 30.5 million in the prior June quarter.

Analysts expected about 42 million active accounts.

The company said that streaming levels per active account have “moderated” since hitting their peak in the beginning of the second quarter, but that they remain above where they were prior to the pandemic.

Roku declined to give a financial outlook, pointing to challenges in the advertising market. “The ad industry outlook remains uncertain for Q3 and Q4, and we believe that total TV ad spend will not recover to pre-COVID-19 levels until well into 2021,” the company said in its investor letter, as some industries like travel and tourism have significantly pulled back their marketing spending.

The company said in its investor letter that it sees “potential reasons for variability” but still expects that its “overall revenue will grow substantially on a year-over-year basis in the second half and for the full-year 2020, albeit not as strongly as we had anticipated prior to the pandemic.”

Roku had announced back in December that Chief Financial Officer Steve Louden would be stepping down once a replacement was found for his position, but the company said Wednesday that Louden plans to remain in the role and that it has called off the search for his successor.

Roku shares have risen 33% over the past three months as the S&P 500 SPX, +0.64% has gained 16%.

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