(Bloomberg) — Roku Inc. shares were volatile postmarket Wednesday after the video-streaming platform company reported second-quarter revenue that topped the highest analyst estimate but warned that its short-term outlook remains uncertain.
The company had revenue of $356.1 million, which beat the highest analyst estimate at $349.0 million, according to Bloomberg data. However, investor enthusiasm was tempered by cautious commentary about the fourth quarter, its seasonally strongest period. Roku also warned that total TV ad spending probably won’t recover to pre-pandemic levels until “well into” 2021.
“We believe the pandemic has accelerated the long-term trend towards all TV being streamed, but because the short-term outlook is both variable and uncertain, we are not issuing a formal outlook at this time,” Roku said in a letter to shareholders.
Roku added 3.2 million active accounts in the quarter for a total of 43 million and reported 14.6 billion streaming hours. Bloomberg Consensus data had pointed to about 41.5 million active accounts and 14.4 billion streaming hours.
The company also reported a net loss of 35 cents a share. Wall Street had been looking for a loss of 55 cents per share, according to data compiled by Bloomberg.
Roku rose as much as 8% postmarket before paring the gains. The stock has gained about 160% off a March low, and has been trading near its highest level since last September.
The pandemic has contributed to the stock’s rally by keeping audiences at home, driving demand for streaming-video services. This trend has offset the weakness in the market for digital advertising.
“We’re still growing significantly, but it is slower growth than we would’ve otherwise expected, given the macro environment,” said Steve Louden, the company’s chief financial officer, in a phone interview. “There might be some short-term volatility with the ad market, but overall this environment is very good for Roku. It is clear that the long-term trend to streaming has being accelerated by Covid.”
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