Roku (NASDAQ:ROKU) seems to be doing everything right recently. Revenue surged 51% year over year in Q1, driven primarily by a 79% increase in platform revenue. In addition, the company's 2-year-old Roku Channel now boasts over 10,000 free ad-supported movies and TV episodes and more than 30 premium subscription-based content services.
For investors taking a close look at Roku after such strong performance, the company's most recent earnings call offers a look at some important high-level thinking from management. Here are three key topics that surfaced during the first-quarter call.
1. Superior ads
While the trend of marketers shifting budgets away from linear television ads to connected-TV (CTV) ads is still nascent, this doesn't mean the important new channel isn't as valuable as linear television yet. According to Roku, its CTV ads are delivering better value for advertisers.
"Already, we're in a great place to demonstrate that ads on Roku drives significantly more impact than linear and other forms of digital advertising," said Roku's general manager of its platform business, Scott Rosenberg.
Of course, this makes sense. Not only are CTV ads informed by data, but CTV is where consumer eyeballs are headed. Roku's active accounts increased 40% year over year in Q1, and streaming hours soared 74% over the same time frame.
2. What about Apple and Disney?
"For starters, with 29 million active accounts and some very effective audience development tools, we're an increasingly important partner for these kinds of services that are trying to reach viewers, build audience, increase engagement," explained Roku CEO Anthony Wood. He continued:
We have a lot of tools that they can use to do that, and they're buying them. And they -- of course, it drives interest in streaming. It drives more cord-cutters. It just propels the whole industry generally.
Apple's new streaming TV service is launching this fall, and Disney's is scheduled to come to market on Nov. 12. While both services will be ad-free, Roku also makes money from taking a share of subscriptions on its platform.
3. New streaming services need Roku
While new streaming services do benefit Roku, it's worth noting that Roku also helps these services immensely with its audience tools. Wood explained:
[O]ur competition, not only do they have smaller scale in the U.S., but they also don't -- they haven't put a lot of effort into building these tools that services need to grow their audience. So we have a lot of ways for [new streaming services] to do that. So yes, we're obviously an important partner for launching a streaming service.
Strengthening Roku's argument, Apple and Disney have both already announced their new streaming services will be on Roku.