For Roku (ROKU -1.64%), the momentum seems unstoppable. At least that looks to be the case lately. The streaming-TV platform specialist saw its revenue accelerate once again in its most recent quarter. Its second-quarter top line surged 59% year over year -- an increase from 51% growth in Q1 and 45% growth in the fourth quarter of last year.
A huge increase in platform revenue helped bolster Roku's results. Here's a closer look.
Image source: Getty Images.
Roku's second-quarter results: The raw numbers
|
Metric |
Q2 2019 |
Q2 2018 |
Change |
|---|---|---|---|
|
Revenue |
$250.1 million |
$156.8 million |
59% |
|
Gross profit |
$114.2 million |
$77.8 million |
47% |
|
Earnings per share (loss) |
($0.08) |
$0.00 |
N/A |
Data source: Roku second-quarter shareholder letter.
What happened with Roku this quarter?
Revenue increased from $157 million in the year-ago quarter to $250 million. Driving the quarter was an 86% year-over-year increase in platform revenue (primarily from advertising, subscriptions, and transactions on its platform). This put platform revenue at 67% of total revenue.
Gross profit soared 47% year over year. But when adjusted to exclude an $8.9 million benefit to cost of goods sold in the year-ago quarter, gross profit increased 66% year over year. The outsize increase in adjusted gross profit in comparison with Roku's 59% revenue growth highlights the company's scalable business model.
Roku boasted some impressive user metrics in Q2. It added 1.4 million active accounts during the quarter, bringing total active accounts to 30.5 million -- up 39% year over year. Users streamed 9.4 billion hours during the period, up 72% year over year. Average revenue per user surpassed $20 for the first time, coming in at $21.06. This was up 27% year over year.
What management had to say
Management was particularly pleased with its advertising business, which helped platform revenue outperform the company's expectations.
"Total revenue growth accelerated to 59% [year over year], primarily driven by growth in advertising as Roku monetized video ad impressions once again more than doubled [year over year]," management said in the second-quarter shareholder letter. This is in line with recent trends: Roku's video ad impressions more than doubled on a year-over-year basis in both 2018 and in the first quarter of 2019.
The player business also outperformed management's expectations:
During Q2, we saw strong unit sales for both Roku TVs and players. We continue to strengthen our position in smart TV OS licensing. Roku TV represented more than one in three smart TVs sold in the U.S. during the first half of the year.
Player revenue in Q2 increased 24% year over year to $82 million.
Looking forward
With such strong momentum, management gave its full-year guidance a significant boost. It now expects revenue in 2019 to be between $1.075 billion and $1.095 billion, after a previous forecast ranging from $1.03 billion to $1.05 billion. Roku also notably said it now expects adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the full year to be between $30 million and $40 million, up from a prior outlook for $10 million to $20 million.
