-
Total GAAP Revenue: Over $1.1 billion in Q3 2024.
-
Net Revenue Growth: 16% year-over-year to $1.06 billion.
-
Platform Revenue: $918 million, up 15% year-over-year.
-
Device Revenue Growth: 20% year-over-year in Q3 2024.
-
Gross Profit: $108 million, up 30% year-over-year.
-
Adjusted EBITDA: $98 million, significantly above outlook.
-
Free Cash Flow: $157 million on a trailing 12-month basis.
-
Cash Balance: $2.1 billion at the end of the quarter.
-
Q4 Revenue Outlook: $1.14 billion, a 16% year-over-year increase.
-
Q4 Gross Profit Outlook: $465 million with a gross margin of 41%.
-
Q4 Adjusted EBITDA Outlook: $30 million.
-
Full Year 2024 Adjusted EBITDA Outlook: $213 million.
Release Date: October 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
-
Roku Inc (NASDAQ:ROKU) achieved its first quarter with over $1.1 billion in total GAAP revenue.
-
The Roku OS remains the number one selling TV OS in the U.S., Canada, and Mexico.
-
Streaming hours increased by 80% year-over-year, indicating strong user engagement.
-
Platform revenue grew by 15% year-over-year, driven by streaming service distribution and advertising activities.
-
Roku Inc (NASDAQ:ROKU) ended the quarter with $2.1 billion in cash and a $300 million credit facility, indicating strong financial health.
-
Platform gross margin decreased by 198 basis points year-over-year.
-
Device gross margin was negative, down 260 basis points year-over-year.
-
Total ARPU was flat year-over-year at $41.10, indicating challenges in monetization.
-
International markets are in early stages of monetization, impacting overall revenue growth.
-
M&E (Media & Entertainment) continues to be a challenged vertical, affecting advertising revenue growth.
Q: Can you expand on the drivers of the platform acceleration in Q3 and the rationale for removing streaming households as a KPI? A: Anthony Wood, CEO, explained that platform revenue grew by 15% year-over-year, driven by deeper integration with third-party platforms and innovations on the home screen. The change in KPIs reflects a focus on platform revenue growth and profitability, as streaming household growth is not representative of revenue growth due to different monetization stages in international markets.
Q: How should we think about growth acceleration into 2025 and the right level of investment to support that growth? A: Dan Jedda, CFO, noted that while strong growth is expected in 2025, it may not accelerate each quarter due to variables like political spend and price increases. Operating expenses are expected to grow modestly, with a focus on high-impact projects and leveraging the operating model.
Q: Which will be a bigger benefit next year: the partnership with the Trade Desk or home screen video advertising? A: Charles Collier, President of Roku Media, highlighted that both are significant opportunities. The Trade Desk integration is already showing positive impacts, and home screen video advertising is in beta with promising feedback. Both initiatives are expected to drive incremental revenue.
Q: Are you seeing cost per thousand (CPM) pressure as other alternatives offer more direct performance-based CTV options? A: Anthony Wood, CEO, stated that Roku’s diversified revenue stream across streaming service distribution and advertising mitigates CPM pressure. The platform’s unique ad products and sponsorships, along with performance-based ad products, position Roku well in the market.
Q: Can you prioritize your areas of investment over the next 12 months? A: Dan Jedda, CFO, emphasized a focus on platform monetization, international expansion, and original content. Investments will continue in areas like deeper integration with DSPs, home screen innovations, and subscription growth, with modest OpEx growth expected.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
Add Comment