Roku, the digital streaming business, had a huge first earnings report, greatly surpassing analyst expectations.
The company quickly surged over 26% in initial after-hours trading.
Roku reported $124.8 million in net revenue for its third quarter, compared to $110.5 million in analyst estimates. It’s also above the $89 million in revenue for the same period last year.
Adjusted losses per share were just 10 cents, better than last year’s loss of 17 cents and far better than the loss of $1.40 that some on Wall Street anticipated. (There was a broad range of analyst estimates.)
Net loss was $46.2 million. Loss from operations was $7.9 million.
“Our higher margin platform segment is the key driver of our growth and gross margin expansion, and our advertising business has more than doubled in size year-to-date,” said CEO Anthony Wood in the company press release.
He’s referring to the revenue generated from advertising, licensing and revenue shares with Amazon, Hulu, Netflix and YouTube.
Roku’s devices are aimed at cord cutters. Its digital streaming platforms compete with Apple TV, Google Chromecast and more.
“Streaming is continuing to become more and more mainstream,” Wood said, in an interview with TechCrunch.
It has also been building out a TV business, integrating its operating system with smart TV manufacturers. Wood claims that 1 in 5 smart TVs sold in the U.S. are Roku TVs.
Roku says that its active accounts for the quarter totaled 16.7 million, up 48% year-over-year, with “the largest and fastest-growing portion coming from Roku TVs,” according to the release.
Roku says its users streamed 3.8 billion hours in the quarter, up 58% from the same period last year.
Trailing twelve-month average revenue per user was $12.68, an increase of 37%.
Here’s how the company has traded since its September IPO. Roku had priced its IPO at $14 and finished its first day at $23.50. The stock closed Wednesday at $18.84, with a market cap of $1.83 billion. Shares quickly traded up to almost $24, following the earnings report.