Roku Jumps After Forecasting FY20 Revenue Growth Of 42%

Shares of Roku (ROKU) moved higher on Friday after the company reported fourth-quarter results, adding that it expects fiscal 2020 revenue to be up 42% year-over-year.

RESULTS AND GUIDANCE: On Thursday after the market close, Roku reported a fourth-quarter loss per share of (13c), slightly better than the (14c) loss analysts were expecting. Revenue of $411.23M, however, handily beat the $391.61M consensus.

For all of 2019, Roku said streaming hours were up 16.3B y/y to a record-high of 40.3B. Roku added 9.8M incremental active accounts in 2019 to reach 36.9M at year-end, it added. Average Revenue Per User, or ARPU, increased $5.19 y/y to $23.14.

Looking ahead, Roku forecast first-quarter revenue of $305M, above the $297.48M analysts' currently expect. The company noted that Q1 is seasonally its softest quarter from a revenue perspective, with revenue that has historically been around 25% lower sequentially than Q4. The company also forecast fiscal 2020 revenue of $1.6B, above the $1.58B consensus, amounting to roughly 42% year-over-year growth. "We anticipate overall revenue seasonality to be similar to 2019 with our seasonally strong Q4 accounting for approximately 35% of annual revenue," it said.

EXECUTIVE COMMENTARY: "2019 was a tremendous year for TV streaming as the massive shift of the TV ecosystem gained momentum. These developments were a clear indication that traditional media, as well as new entrants, plan to compete aggressively in OTT and we believe Roku is the best platform for them to engage streamers," the company said in its Q4 shareholder letter. "While 2019 was a tipping point in commitments to streaming, the full force of change is still to come," the company wrote.

Roku’s 2020 outlook does not include material impacts from the coronavirus outbreak in China, where the company does manufacturing. “There is potential for more significant manufacturing and supply-chain disruptions if the outbreak becomes more severe, which may hamper our and our partners’ abilities to replenish inventory after a strong holiday season,” Chief Financial Officer Steve Louden said on the company's earnings conference call.

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Disclosure: None.


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