What happened

Shares of Roku (ROKU -0.35%) turned sharply lower Wednesday, cratering as much as 18.1%. As of 10:23 a.m. ET, the stock was still down 16.3%.

The overall market slump added fuel to the fire, but it was the streaming pioneer's quarterly financial report that took center stage -- and investors did not like what they saw.

So what

For the third quarter, Roku generated revenue of $761 million, up 12% year over year, driven by active accounts of 65.4 million, which grew 16%. Platform revenue grew 15% but was offset by player revenue that fell 7%. This weighed heavily on the company's bottom line, resulting in a loss per share of $0.88, compared to earnings per share of $0.52 in the prior-year quarter. 

To give those numbers some context, analysts' consensus estimates were guiding for revenue of $696.2 million and a loss per share of $1.29, so Roku surpassed expectations on both counts. 

Viewers streamed 21.9 billion hours during the quarter, an increase of 1.1 billion hours sequentially, showing the death of streaming has been greatly exaggerated.

There were a number of positive developments that were overshadowed by Roku's mounting losses. Streaming hours on The Roku Channel, the company's ad-supported streaming option, grew more than 90% year over year, while also launching in Mexico. Roku also said its three-phase model of scale, engage, and monetize -- which worked so well in the U.S. -- also succeeded in Mexico, as the company boasts the No. 2-selling smart TV in the country.

Now what

There were two issues that spooked Roku investors, its weakening results aside. First, the company announced that CFO Steve Louden would be leaving the company sometime in 2023. Louden helped usher the company through its IPO and originally planned to leave in 2019 but ultimately put off the move.

Roku's outlook was a shocker, however, as the company is guiding for net revenue of roughly $800 million, a decline of roughly 8% year over year, resulting in adjusted EBITDA of -$135 million.

Its status as the industry-leading platform, as well as reasonable valuation of just 2 times sales, make Roku a steal. Until the economy improves, however, investors should buckle in for a bumpy ride.