Roku (ROKU 5.41%) is off to a fumbling start in 2022. Year to date, the stock has tumbled 30%. This poor performance means the stakes are high going into the streaming TV company's fourth-quarter earnings report this week. Could Roku put up numbers that impress the Street, reinvigorating interest in the stock? Or will the company's fourth-quarter numbers be underwhelming (or possibly even disappointing)?
Ahead of the tech company's fourth-quarter earnings report on Thursday evening, here's an overview of some of the key metrics worth checking on.
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Revenue growth
First and foremost, investors will be interested in the company's revenue growth. The streaming TV specialist's top line has been soaring recently. In Q4, it grew 51% year over year to $680 million, fueled mostly by Roku's platform business (primarily made up of its share of sales from subscriptions and advertisements on its platform).
Roku management said in the company's third-quarter update that it expected fourth-quarter revenue to be between $885 million and $900 million. This range represents approximately 36% to 38% year-over-year growth.
Active accounts
Another crucial area investors will likely be watching is Roku's active account growth. Active account growth has slowed recently as the limited supply of Roku-powered smart TVs negatively affected the company. "Some of our Roku TV OEM partners were hit particularly hard with inventory challenges, which negatively impacted their unit sales figures and market share in Q3," CEO Anthony Wood said in the company's third-quarter shareholder letter.
In Q3, Roku added 1.3 million active accounts sequentially. This was down from the 1.5 million active accounts it added in the second quarter and the 2.4 million in the first. Given the ongoing supply challenges, it wouldn't be surprising to see even lower active account growth in Q4. But investors are likely hoping for the metric to improve.
Streaming hours
Another Roku metric that has been challenged recently is the company's streaming hours. Total streaming hours on its platform in Q3 were 18 billion. While this was up slightly from 17.4 billion in Q2, it was down from first-quarter levels of 18.3 billion. While seasonality and a reopening economy explain some of the slow sequential growth in this metric, it could be a red flag if Q4 streaming hours don't jump meaningfully on a sequential basis.
Of course, seasonality should work in Roku's favor in Q4, so streaming hours should jump nicely compared to Q3 2021 levels. But it would be especially nice to see a reacceleration of the company's year-over-year growth rates in streaming hours. Q3 streaming hours increased 21% year over year; could this growth rate pick up steam in Q4?
Roku is scheduled to report its fourth-quarter and full-year results after market close on Thursday, Feb. 17.
