TV streaming platform Roku Inc. (ROKU) Wednesday reported a narrower net loss for the first quarter when overall performance improved to a greater extent than analysts had expected. After the announcement, the stock gained significantly in the aftermarket.
The loss narrowed to $6.63 million or $0.07 per share from $8.7 million or $1.79 per share in the first quarter of 2017. Analysts were looking for a wider loss. The bottom line was particularly dragged by a 50% rise in operating expenses to $70 million.
Announcing its third quarterly financial results as a public company, Roku said revenues jumped 36% year-on-year to $136.6 million. Revenues came in above market expectations.
Driving the top line growth, platform revenues more than doubled to $75 million, benefiting from the continuing shift from legacy TV distribution to streaming. Meanwhile, revenue from the player segment dropped 3.4% to $61.5 million, continuing the recent trend.
The company, which competes with the likes of Amazon (AMZN) and Apple (AAPL), had 20.8 million active accounts at the end of the first quarter, up 47% compared to the same period last year. Overall streaming hours surged 56% annually to 5.1 billion and average revenue per user climbed 50% to $15.07, reflecting the company’s efforts to expand platform monetization and capture more TV ads.
The bottom line was particularly dragged by a 50% rise in operating expenses to $70 million
Encouraged by the improvement in first-quarter results, Roku raised its second quarter revenue outlook to the range of $135 million to $145 million. The Los Gatos-based company currently expects a net loss in the range of $19 million to $14 million for the second quarter. For the whole of 2018, the company forecasts revenues between $685 million and $705 million. Full-year net loss is projected in the range of $40 million to $25 million.
ROKU shares, which plunged more than 30% since the beginning of 2018, traded higher during Wednesday’s regular session and closed up 9%. In the after-hours, the stock further advanced towards north.