Shares of Roku Inc. (ROKU) fell sharply Wednesday despite the TV streaming platform reporting a narrower net loss and higher revenues for the third quarter, which came in above analysts’ forecast. The company also revised up its revenue guidance for fiscal 2018.
After recording a surprise profit in the June quarter, the California-based company reported a net loss of $9.53 million or $0.09 per share for the third quarter, compared to a loss of $46.2 million or $8.79 per share in the year-ago quarter. Analysts had forecast a wider loss.
During the three-month period, net revenues jumped 39% year-over-year to $173.4 million, helped mainly by a 74% growth in the platform segment. Player revenue grew 9% from the third quarter of 2017 amidst the continuing retail demand for streaming players. The top-line exceeded the Wall Street forecast.
After recording a surprise profit in the June quarter, the California-based company reported a loss of $0.09 per share for the third quarter
Roku had 23.8 million active accounts at the end of September, up 43% compared to last year. Average revenue per user (ARPU) rose 37% to $17.34 and the number of streaming hours surged 63% to 6.2 billion.
Buoyed by the strong results, the management raised its full-year 2018 revenue growth forecast to 42% from the earlier estimate of 40%. The outlook for gross profit growth has been revised up to 63% year-over-year from the previous guidance of $61%.
Roku has been expanding the customer base ever since it rolled out its own TV channel last year, adding value to the network that continues to be a favorite among the company’s 21-million subscribers.
Roku is touted as the next Netflix in the streaming industry, considering its product mix that ensures optimum audience engagement, which made the company an important platform for both content providers and advertisers.
Roku shares gained 23% since the beginning of the year, and peaked in early October. The stock closed Wednesday’s regular session higher but dropped sharply in the after-hours trading.