Roku's platform drives quarterly revenue beat

(Reuters) - Roku Inc topped Wall Street estimates for quarterly revenue on Wednesday as the company added more subscribers to its ad-supported platform, sending its shares up nearly 9 percent.

FILE PHOTO A video sign displays the logo for Roku Inc, a Fox-backed video streaming firm, in Times Square after the company's IPO at the Nasdaq Market in New York, U.S., September 28, 2017. REUTERS/Brendan McDermid/File Photo

Roku, which made a spectacular trading debut on the Nasdaq in September last year, is known for its device that connects televisions to streaming services from companies such as Hulu, Netflix Inc and Amazon.com Inc.

However, Roku has been witnessing intense competition in this space from companies with deeper pockets such as Apple Inc, Alphabet Inc’s Google, Amazon.com Inc.

This has led the company to tap other sources of revenue such as by licensing its technology to television makers and also by getting a share of the advertising revenue from media companies based on sign-ups for apps on its platform.

The company’s subscriber addition rose 46 percent in the quarter, with its platform adding 22 million active accounts.

This helped platform revenue nearly double to $90.3 million in the quarter. However, revenue from its streaming devices business rose only 24 percent to $66.5 million.

Last September, Roku launched a namesake channel, a streaming service that delivers television shows and movies, and opened up its platform to more television apps than its peers, allowing it to offer over 5,000 channels internationally.

Separately, the company said it launched the Roku Channel for the web in the United States, giving free access to users via personal computers, mobile phones and tablets.

The company reported a profit of $526 million in the second quarter ended June 30 compared with a loss of $15.5 million a year ago.

Excluding items, the company broke even on a per share basis, better than analysts’ estimate of a 15-cent loss.

Total net revenue rose to $156.8 million from $99.6 million, beating the average analyst estimate of $141.5 million.

Shares of the company rose to $51.25 in after-hours trading.

Reporting by Sonam Rai in Bengaluru; Editing by Arun Koyyur

(Original source)