Roku Q1 2023 earnings results beat revenue expectations, miss EPS estimates
Roku is boasting some new records for streaming hours per user.
As part of our increasing focus on tech stocks, let's check in with Roku. Roku reported in with its quarterly earnings on Wednesday. For Q1 2023, the company reported a total net revenue of $741 million, which is up slightly year-over-year. However, this narrowly missed EPS expectations.
The following comes from the Roku Q1 2023 shareholder letter:
In Q1, Roku grew Active Accounts to 71.6 million globally. Sequential net adds of 1.6 million were above net adds in Q1 2022. In the U.S., our Active Accounts are approaching half of all broadband households. This unmatched scale is the foundation of our business model, leading to significant engagement and growing monetization opportunities.
Overall, smart TV unit sales in the U.S. were resilient in Q1, driven in part by lower TV panel and freight costs and consumer spend of income tax refunds. Roku benefited from these trends along with a consumer focus on value, particularly in a difficult macro environment. In Q1, the Roku operating system (OS) was once again the #1 selling smart TV OS in the U.S., achieving a record-high 43% of TV unit share, which was more than the next three largest TV operating systems combined (according to Circana). We achieved YoY share gains across the full range of TV screen sizes, particularly in the larger-screen segment.
In Mexico, the Roku OS was the #1 selling smart TV OS for the second quarter in a row. And in Germany, we expanded our Roku TV program with our third TV OEM partner, Coocaa. With more than 20 licensed Roku TV partners globally, we continue to drive great results across the program.
Roku is crediting its modest growth to record streaming numbers. Users streamed over 25.1 billion hours in Q1 2023 with the average 3.9 streaming hours per user figure representing a new record. Roku continues to refine its interface with new hubs added for Sports and Local News.
Wall Street had previously projected an EPS estimate $1.37/share loss and a whisper $1.42/share loss. Wall Street's estimate of $708 million revenue fell short of Roku's reported $742 million net revenue. Roku (ROKU) stock finished the trading day down by $1.16 per share, but has risen modestly by $2.13 per share in after-hours trading as of the time of this post.
Roku is hopeful that its streaming growth will continue while it weathers the storm of lowered ad spending across the entire streaming sector. The company noted that ad spending for travel and health & wellness verticals have shown improvement overall. Roku is projecting a $770 million net revenue number for Q2 2023 despite its anticipation of macro uncertainties persisting throughout the year. We'll continue to cover Roku and other earnings for major tech companies, including Facebook/Meta, which will have its Q1 2023 earnings call later today.
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