ROKU Q1 Loss Narrower Than Expected, Revenues Increase Y/Y

Roku ROKU reported first-quarter 2025 loss of 19 cents per share, narrower than the Zacks Consensus Estimate of a loss of 27 cents. The company had incurred a loss of 35 cents per share in the year-ago quarter.Revenues increased 15.8% from the year-ago quarter’s level to $1.02 billion and beat the consensus mark by 1.61%. See the Zacks Earnings Calendar to stay ahead of market-making news.Beginning with this quarter, Roku will no longer report quarterly updates on streaming households and, by extension, ARPU. Roku, Inc. Price, Consensus and EPS Surprise Roku, Inc. price-consensus-eps-surprise-chart | Roku, Inc. QuoteStrength in The Roku Channel and Roku TV Aids the Top Line In the first quarter, The Roku Channel achieved a significant milestone by becoming the #2 app on its platform in the United States and maintained its #3 position globally by both reach and engagement, with Streaming Hours up 84% year over year. This tremendous growth is a result of Roku’s ability to recommend relevant content throughout the Roku Experience, as well as its broad content offering. In the first quarter, more than 85% of streaming hours on The Roku Channel originated from the Roku Experience (not a Roku Channel app tile), with the content row on its Home Screen driving the most hours of any entry point. In the first quarter, Roku continued to attract advertiser interest through its Roku Originals. Airbnb ABNB sponsored the romantic comedy This Time Next Year, and Miller Lite sponsored the launch of Roku’s new sports talk show, Women’s Sports Now. Additionally, it featured its first shoppable Roku Recipes execution for Hellmann's/Best Foods Mayo in partnership with Walmart WMT.Also, Roku partnered with Apple AAPL to create a fan experience on Roku’s Home Screen for the hit show Severance. The successful campaign helped drive both engagement and viewers, including first-time Apple TV+ subscribers. Roku also announced an agreement to acquire Frndly TV, which is intended to support Roku’s focus on growing Platform revenues and Roku-billed subscriptions.In the first quarter, advertising activities grew faster than overall Platform revenues and outperformed the OTT ad market in the United States. This excludes the Media and the Entertainment vertical. This Zacks Rank #3 (Hold) company continues to make progress, growing ad demand through deeper third-party platform integrations, improving the Roku Experience to expand monetization, and growing Roku-billed subscriptions. The Roku Experience begins with the Home Screen (which is the interface of viewers’ streaming experience), the lead-in to TV for U.S. households. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.In the first quarter of 2025, Roku maintained its leadership as the #1 selling TV operating system (OS) in the United States, Canada and Mexico. In the United States, sales of TV units powered by the Roku TV OS were greater than those of the #2 and #3 selling TV operating systems combined. The Roku TV OS represented nearly 40% of TV units sold in the United States.Quarter Details of ROKUPlatform revenues (86.3% of revenues) increased 16.7% year over year to $880.8 million.Devices revenues (13.7% of revenues) rose 10.6% from the year-ago quarter’s level to $139.9 million.ROKU Operating DetailsGross margin, as a percentage of total revenues, contracted 50 basis points from the year-ago quarter’s level to 43.6%.Operating expenses increased 9.2% year over year to $502.8 million. As a percentage of total revenues, the metric contracted to 49.3% from 52.2% reported in the year-ago quarter.Research & development and sales & marketing expenses rose 2.3% and 10.7% on a year-over-year basis to $184.6 million and $223.7 million, respectively. General & administrative expenses increased 21.6% to $94.5 million.In the first quarter, adjusted EBITDA was $56 million, up 36.9% year over year. Operating loss was $57.7 million in the reported quarter compared with an operating loss of $72 million in the year-ago quarter.Balance Sheet of RokuAs of March 31, 2025, cash and cash equivalents were $2.26 billion compared with $2.16 billion as of Dec. 31, 2024. As of March 31, 2025, Roku had no long-term debt.Roku Provides Guidance for Q2 & 2025For the second quarter, Roku estimates total net revenues of approximately $1.07 billion, up 11% year over year. Platform revenues are expected to grow 14% year over year, with a gross margin of roughly 51%. Devices revenues are expected to decline 10% year over year with a gross margin of negative 10%. Roku expects first-quarter total gross profit of $465 million and adjusted EBITDA of $70 million. For 2025, Roku expects Platform revenues of $3.95 billion and adjusted EBITDA of $350 million. Platform gross margin is expected to be 52% due to evolving dynamics in the company’s advertising product mix.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Apple Inc. (AAPL): Free Stock Analysis Report Walmart Inc. (WMT): Free Stock Analysis Report Roku, Inc. (ROKU): Free Stock Analysis Report Airbnb, Inc. (ABNB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks