Roku stock surges on earnings beat, record premium subscriptions
shares roku It rose more than 6% on Friday after the video streaming company sent fourth quarter results that beat analysts’ expectations and offered strong guidance.
According to analyst estimates compiled by LSEG, the company’s performance is as follows:
- Earnings per share: 53 cents etc. 28 cents
- Revenues: $1.35 billion versus $1.39 billion
“The biggest driver of our subscription business is the secular trend of more and more services moving to something like premium subscriptions rather than doing their own app,” Roku CEO Anthony Wood told CNBC’s Julia Boorstin on Friday. “I really think that’s the key driver.”
Roku executives said in their shareholder letter that the fourth quarter was the “largest quarter ever” in terms of net contribution to premium subscriptions. The program allows users to subscribe to different streaming services such as HBO Max and Paramount+ with a single login on the Roku platform.
The company said it expects to offer premium subscription packages this year.
Roku said it expects to report revenue of $1.2 billion for the current period, higher than the $1.16 billion analysts expected, according to StreetAccount. Additionally, full-year revenue was estimated at $5.5 billion, beating analysts’ estimates of $5.34 billion, according to StreetAccount.
Roku last May acquired Frndly, $185 million live TV subscription streaming service. The company also recently launched an ad-free streaming service called Howdy that costs $2.99 a month.
Howdy has the potential to become a “huge service” over time, Wood told investors about the company’s earnings. Roku also said it’s on track to surpass 100 million households this year.
Analysts at Rosenblatt Securities upgraded Roku’s shares from neutral to buy on Friday, citing strong fourth-quarter results and several potential near-term growth tools for the company.
“Big picture – Roku has built a formidable watchdog presence for streaming in the US; half of all streaming on US TVs passes through their devices,” analysts wrote.
Rosenblatt stated that his ability to monetize streaming has increased thanks to his partnership with . Amazona new advertising tool for small and medium-sized businesses and front page tweaks for improved ads.
Correction: Roku reported fourth-quarter earnings of 53 cents per share. An earlier version misidentified the figure.
