Analysts believe Roku has massive growth opportunities in areas such as advertising and licensing. The company is expected to benefit from the arrival of more streaming services into the market and the rise of cord-cutting. Last month, Roku announced the availability of the Apple TV app and Apple TV+ on its platform.
The television advertising market is a vastly lucrative area and Roku has ample chance to carve a space for itself here. The acquisition of Dataxu, a demand-side platform that helps marketers plan and buy video ad campaigns, will aid Roku in achieving this target. The spending on OTT advertising is projected to increase over the coming years.
In the second quarter of 2019, Roku beat market estimates on revenue and reported a narrower-than-expected loss. Revenues jumped 59% year-over-year to $250.1 million, driven by growth in advertising. The company reported a loss of $0.08 per share versus the loss of $0.22 per share expected by analysts.
For the third quarter, Roku has guided for revenues of $250-255 million and net loss of $40 million to $34 million.
For full-year 2019, the company expects a net loss of $71-61 million on revenues of $1.07 billion to $1.09 billion. Platform revenue is expected to represent roughly two-thirds of total revenue.
Roku’s shares have gained 361% year-to-date and 32% in the past one month. The stock was down over 3% in midday trade on Monday.