Roku (NASDAQ:ROKU) came through with a blowout financial report on Thursday, even if Wall Street yawned in response. The streaming-video pioneer trounced expectations, but the stock only inched 3% higher on Friday.

The headline numbers were great, but the real story is even more impressive. Let's go over three really impressive things about Roku's fourth-quarter performance.

A couple relaxing on a couch with some popcorn as they watch TV.

Image source: Getty Images.

1. Accelerating growth is on the menu

A big reason for Roku's success as an investment (it's a 33-bagger since going public at $14 in the fall of 2017) is that it keeps getting better with every passing year. Even the best growth stocks tend to start decelerating at some point, but Roku has managed to pick up the pace on its top-line growth through its first four years as a publicly traded company:

  • 2016: 24.6% revenue growth
  • 2017: 28.6%
  • 2018: 44.8%
  • 2019: 52%
  • 2020: 57.5%

It's fair to say that 2021 may be the year that Roku proves mortal, but even some ardent bulls felt that 2020 would be the year it finally lifted its foot off the gas pedal. It didn't happen. Roku's revenue growth in 2020 was double the clip that it grew its top line in 2017. The only thing that Wall Street loves more than a growth-stock story is a growing growth-stock story.

2. We're starting to stream more again

Something that I like to do every quarter is divide the number of hours streamed by the active Roku user count and then by the number of days in the financial period to arrive at the average daily hours per user. Now, nobody else that I know is really tracking this metric (let's just shorten it to ADHPU), but in my eyes it's the ultimate test of engagement. 

Since the second quarter of 2019, we saw this number rise until the third quarter of last year. The run of upticks that started at ADHPU of 3.39 and peaked at 3.73 in the second quarter of last year came to an end the following quarter with viewers leaning on the platform for an average of just 3.5 hours a day. 

It makes sense. The country braced for the pandemic with shutdowns starting in the final two weeks of the first quarter last year. We didn't go out much in April, May, and June if we weren't essential workers. It's only natural for that metric to slip after that, but check out what happened in the fourth quarter.   

Quarter Active Roku Users Hours Streamed Days in Quarter Average Daily Hours Per User
Q1 2019 29.1 million 8.9 billion 90 3.4
Q2 2019 30.5 million 9.4 billion 91 3.39
Q3 2019 32.3 million 10.3 billion 92 3.47
Q4 2019 36.9 million 11.7 billion 92 3.45
Q1 2020 39.8 million  13.2 billion 91 3.64
Q2 2020 43.0 million 14.6 billion 91 3.73
Q3 2020 46.0 million 14.8 million 92 3.50
Q4 2020 51.2 million 17.0 billion 92 3.61

Data source: Roku quarterly reports.

We returned to the creature comfort of our Roku-fueled TVs during the fourth quarter. The 3.61 ADHPU in last week's report is below where we were in the first and second quarters of last year, but it's still an impressive bounce. One can argue that the holidays and an uptick in COVID-19 cases as the fourth quarter played out were factors in keeping us glued to our sets. There's no disputing that, but it's still a welcome sight for a Roku bull to see. 

3. Platform revenue growth is everything

Total revenue growth slowed between the third and fourth quarters, but that's not a deal breaker. The fourth quarter's octane is historically weighed down by slower-growing player revenue as low-margin Roku devices are popular holiday purchases. 

The real heart of Roku is the higher margin and faster-growing platform revenue. With a growing and engaged audience, platform revenue is the real reason growth investors are flocking to Roku. This brings us to 81% platform revenue growth in the fourth quarter, Roku's strongest year-over-year growth on that front since the second quarter of 2019.

  • Q2 2019: 86% platform revenue growth
  • Q3 2019: 79%
  • Q4 2019: 71%
  • Q1 2020: 73%
  • Q2 2020: 46%
  • Q3 2020: 78%
  • Q4 2020: 81%

There were naturally some pandemic dynamics holding back the tail end of the first quarter and all of the second quarter of 2020, but the trend is improving right now. Roku is killing it as a growth stock, and you see that everywhere you look.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.