Investors have come to expect stellar results from Roku (ROKU 1.88%), which has made a habit of reporting better-than-expected top-line growth. Q4 proved to be no exception.

Following market close on Thursday, Roku said its revenue for the period surged 49% year over year to $411 million, handily beating analysts' average forecast for revenue of $392 million. Even more impressive, the company's guidance for both first-quarter and full-year revenue was higher than anticipated.

The quarter capped off an outstanding year for Roku in which its top line, gross profit, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) all exceeded management's forecasts.

Here's a closer look at the strong holiday quarter.

A Roku-powered TV in an apartment living room

A Roku-powered TV. Image source: Roku.

Roku Q4 earnings summary


Q4 2019

Q4 2018



$411.2 million

$275.7 million


Adjusted EBITDA

$15.1 million

$24.5 million


Data source: Roku quarterly shareholder letters for quarters shown.

Roku's revenue of $411 million not only beat analyst expectations but was far ahead of management's guidance for revenue between $380 million and $396 million. Profitability, however, suffered as the company's research and development, sales and marketing, and general and administrative expenses rose 54%, 81%, and 68%, respectively, year over year. Increased spending in these areas was aimed at the company's four investment areas: advertising, the Roku Channel, its TV operating system and reference designs, and international expansion.

Roku's earnings per share were $0.13 -- wider than a loss per share of $0.08 in the year-ago period but $0.01 better than analysts' consensus estimate.

Surging platform revenue

Fueling Roku's growth during the quarter was a 71% year-over-year increase in platform revenue. While the segment benefits from subscriptions, transactions, and ads on its platform, advertising continues to steal the show.

"For Q4 and full year 2019, Roku monetized video advertising impressions more than doubled year-over-year," said Roku management in the company's fourth-quarter shareholder letter. This rapid growth in advertising revenue played a key role in the tech company's strong average revenue per user (ARPU) in 2019, management said. ARPU in 2019 was $23.14 -- up 29% year over year.

Beyond platform revenue, which accounted for 63% of Roku's total fourth-quarter revenue, player revenue increased 22% year over year, driven by a 33% year-over-year increase in unit sales.

Impressive user metrics

User metrics on the platform continue to highlight rapid active account growth and improving engagement. Roku added 9.8 million active accounts in 2019, with 4.6 million of the accounts being added in the fourth quarter alone. Users streamed 11.7 billion hours in the fourth quarter of 2019 -- up 60% year over year.

Expect more strong growth in 2020

Looking to 2020, management said it expects revenue between $1.58 billion and $1.62 billion, up from $1.29 billion in 2019. Analysts, on average, were expecting revenue of $1.58 billion in 2020.

For its first quarter of 2020, Roku guided for revenue between $300 million and $310 million -- well ahead of a consensus analyst estimate of $297 million.

Advertising looks poised to be the key growth theme for Roku in 2020, as well. "The Platform segment is anticipated to contribute a greater mix of overall revenue and gross profit than prior years primarily driven by Roku monetized video ad impressions doubling again on a year-over-year basis," explained management in the company's fourth-quarter shareholder letter.