By Yasin Ebrahim
Investing.com – Roku was roughly flat in after-market hours on Wednesday after the streaming device company’s gloomy outlook overshadowed second-quarter results that topped consensus estimates.
Roku (NASDAQ:) was up 0.2% in after-market trading.
The company’s beat on the top line was helped by platform revenue, which increased 46% year-on-year to $244.8 million.
“The company generated the largest net increase in active accounts in our history outside of a Q4 holiday period,” Roku said. “As economic pressures caused advertisers to further re-evaluate how much and where to invest media dollars, Roku delivered strong growth in our ad business, particularly relative to the overall TV ad market that was down.”
Average revenue per user (ARPU) was up 18% to $24.92, while streaming hours increased by 2.3 billion hours over last quarter to 14.6 billion.
Looking ahead, the company warned of uncertainty.
“The ad industry outlook remains uncertain for Q3 and Q4, and we believe that total TV ad spend will not recover to pre-COVID-19 levels until well into 2021. Advertisers in industries like Casual Dining, Travel and Tourism have significantly slowed their spending. However, we remain confident in our ability to grow our ad business, albeit not as much as we would have expected prior to the pandemic, as marketers re-allocate spend and follow consumers in the shift to streaming,” Roku warned. “As a result, despite the potential reasons for variability listed above, we believe that our overall revenue will grow substantially on a year-over-year basis in the second half and for the full-year 2020, albeit not as strongly as we had anticipated prior to the pandemic.”
The company also reversed a decision to replace chief financial officer Steve Louden.
“Last December, we announced that Steve Louden would relocate and leave Roku after bringing on board his successor. Over recent months, Steve has proven that he is more than capable of performing the CFO role while residing in Seattle. Hence, we are delighted that Steve will be staying on as Roku’s CFO and we have ended the search for his successor,” it added.
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