Continuing the strong momentum that started after going public nearly a year ago, Roku (ROKU) emerged from the negative territory in the second quarter reporting better than expected results. Shares of the TV streaming firm gained about 8% in the extended session as the impressive results triggered a stock rally.
Announcing its fourth earnings report as a public company, Roku reported net income of $0.53 million for the second quarter, compared to a loss of $15.51 million or $3.18 per share in the year-ago quarter. The outcome came in above the analysts’ estimates and the company’s own guidance. The improvement indicates that Roku is moving closer to near-term profitability.
Net revenues jumped 57% year-over-year to $156.8 million, helped by yet another strong performance by the platform segment which recorded a 96% growth. Player revenues moved up 23%, and the top-line exceeded the Wall Street forecast.
Roku had 22 million active accounts at the end of June, up 46% compared to last year. Average revenue per user (ARPU) rose 48% to $16.6 and the number of streaming hours surged 57% to 5.5 billion.
The improvement in bottom-line performance indicates Roku is moving closer to near-term profitability
During the second quarter, the company launched the Roku Channel in Canada. Looking ahead, the management expects a net loss in the range of $18 million to $13 million for the third quarter on revenues of $164-$172 million. The revised guidance represents a marked improvement from the comparable period last year. For the whole of 2018, the company forecasts a net loss between $22 million and $10 million on revenues in the range of $710 million to $730 million.
RELATED: Rating upgrade lifts Roku stock
Of late, Roku has made large strides in ramping up its streaming devices portfolio and forging partnerships with more and more television manufacturers. It has been successful in raising subscriber base consistently and getting viewers hooked to its platform, all the while competing with the likes of Google (GOOG) and Amazon (AMZN).
Roku’s shares ended Wednesday’s regular trading session lower. The stock, which has a history of making big moves during earnings announcements, rose sharply in the extended trading session.