What happened
Roku (ROKU +2.95%) climbed 11.6% Friday after the streaming media company delivered strong first-quarter results.
So what
Roku's revenue soared 79% year over year to $574.2 million, fueled by a 101% surge in platform revenue, to $466.5 million. The gains were driven by a 35% jump in active accounts, to 53.6 million, and a 32% rise in average revenue per user (ARPU), to $32.14.
Roku's advertising platform is becoming more attractive to marketers as people shift their viewing habits away from traditional TV and toward streaming services. Ad dollars follow eyeballs, and companies are increasingly willing to pay up to advertise on Roku's system.
"OneView, our ad platform built for TV streaming, connects brands, performance advertisers, and our content partners with their target audience," CEO Anthony Wood and CFO Steve Louden said in a letter to shareholders.
Roku generated impressive user and revenue growth in the first quarter. Image source: Getty Images.
All told, Roku produced a net profit of $76.3 million, or $0.54 per share, compared to a loss of $54.6 million, or $0.45 per share in the year-ago period. That was well ahead of Wall Street's expectations for a net loss of $0.13 per share.
Now what
Analysts see more good times ahead for Roku. Wedbush analyst Michael Pachter repeated his "outperform" rating and $475 price forecast for Roku's stock Friday.
"We expect advertisers to continue their migration from linear TV to over-the-top on-demand, where Roku is a primary beneficiary as it has dominant market share, a rapidly growing user base, and superior targeting capabilities," Pachter said.
