Shares of Roku Inc. (NASDAQ: ROKU) were up 12% on Friday. The stock has gained 151% in the past 12 months. The company reported revenue and earnings for the first quarter of 2021 a day ago that surpassed market expectations. Looking ahead, Roku remains optimistic that it will benefit from the ongoing rise in demand for streaming services.
Total revenue increased 79% year-over-year to $574.2 million while EPS amounted to $0.54. Platform revenue doubled YoY to $466.5 million while player revenue jumped 22%. Active accounts increased 35% during the quarter to reach 53.6 million.
During the quarter, Roku benefited from strong sales of its players and TV models in both domestic and international markets. Last month, the company introduced two new products – the Roku Express 4K+ and the Roku Voice Remote Pro. The sales of these devices helped drive increases in active accounts and streaming hours. In Q1, streaming hours rose 49% YoY to 18.3 billion.
As the number of streaming services such as Disney+, Amazon Prime Video, Netflix, and HBO Max continues to grow, media companies are investing heavily in content for these platforms in order to gain and retain users. Media and entertainment advertising has also witnessed strong growth during the quarter. As users and content providers continue to move to streaming services, Roku believes it is well-positioned to take advantage of this trend.
The Roku Channel witnessed strong growth and is estimated to have reached 70 million people during Q1. Streaming hours and account reach more than doubled compared to the prior-year period. Total premium subscriptions more than doubled YoY on The Roku Channel.
For the second quarter of 2021, total revenue is estimated to range between $610-620 million while net income is expected to come between $10-20 million. Roku expects more volatile comparisons for revenues going forward into the year as it laps the spikes seen during the COVID-19 pandemic period last year. Revenue growth rates are expected to be stronger during the first half of 2021 as comps get tougher during the latter half.
The rise in streaming witnessed during the spring and summer of last year amid the pandemic drove strong growth in both streaming hours per account and the active account base. For the rest of 2021, growth rates of both these metrics are expected to be lower than 2020. However, net adds for both metrics are expected to be above pre-pandemic levels and the company expects to see strong engagement during the year.
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