Roku beat Wall Street expectations for the third quarter and said it will stop providing quarterly updates on the number of streaming households and average revenue per user, starting in the first quarter of 2025.
“Since our IPO in 2017, the streaming industry has evolved significantly, with Americans now spending significantly more time watching streaming TV than watching cable TV. Our business has also grown and evolved, and we are now primarily focused on increasing platform revenue and profitability,” the company said in its third-quarter letter to shareholders.
This move follows in the footsteps of Netflix, which sets the same timeline.
For the third quarter, Roku reported total net revenue of $1.062 billion, up 16% year over year, and achieved revenue of $1 billion, gross profit of $480 million for the first time, and a net loss of 6 cents per share. Analysts had expected a loss of 32 cents per share and revenue of $1.02 billion.
Roku had forecast revenue of $1.01 billion, gross profit of $440 million and adjusted EBITDA of $45 million.
The number of streaming households using Roku reached 85.5 million, an increase of 2 million from the previous quarter. Streaming hours increased 20% year over year to 32 billion.
Average revenue per user was $41.10, unchanged from the previous year. The flat ARPU numbers “reflect a growing share of streaming households in international markets, where we are currently focused on scale and engagement,” the company said in its letter to shareholders, with different countries in different stages of monetization.
“While much of our streaming household growth occurs in our international markets, the majority of our platform revenue is currently generated in the United States. Therefore, as we continue to grow internationally, streaming household growth is not representative of platform revenue growth. We expect to continue growing streaming families in all of our locations, including the United States. We will provide updates on our reach as we reach certain milestones, such as 100 million streaming households, which we expect to reach in the next 12 to 18 months,” the shareholder letter reads.
In the third quarter, the platform's revenue, which comes from advertising and distribution of streaming services, grew to $908 million, up 15% year over year. Revenue from the distribution of streaming services, which include subscriptions, has grown faster than overall platform revenue, primarily due to increased prices for subscription-based services on the platform, the company said. The platform's overall revenue growth was attributed to home screen improvements, growing advertising demand thanks to deeper third-party integrations, and more subscriptions billed to Roku.
The company expects fourth-quarter revenue of $1.140 billion, up 16% year over year, gross profit of $465 million and adjusted EBITDA of $30 million.
More to come.