Roku headquarters in San Jose, CA.
Roku blames economy for Q2 Miss as net loss mushrooms – Reuters
July 28, 2022
Roku on July 28 proved the naysayers right, posting a net loss of more than $112.2 million in the second quarter, compared to revenue of $73.5 million in the year-ago period. Revenue rose 18.5% to $784.4 million from $645.1 million last year, with player sales falling nearly 20% to $91.2 million from $112.8 million of dollars.
Roku added 1.8 million more active accounts to reach 63.1 million. Streaming hours topped 20.7 billion hours, up 19% (3.3 billion hours) from 17.4 billion hours a year earlier. Notably, total viewing time decreased by 0.2 billion hours compared to the first quarter.
In the letter to shareholders, CEO Anthony Wood and Chief Financial Officer Steve Louden suggested that a “significant slowdown” in TV ad spend during the quarter due to the macro environment “put pressure” on the platform revenue growth. In response to inflationary pressures, executives believe consumers have begun to moderate discretionary spending and advertisers have significantly reduced spending in the “ad dispersion market” (TV ads purchased during the quarter).
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“We expect these challenges to continue in the near term as economic concerns put pressure on markets around the world,” they wrote. “In response, we have taken steps to significantly slow operating expense and headcount growth.”
Wood and Louden said they remain confident in Roku’s leadership in the TV streaming industry, the size of the market opportunity, and the company’s unique strengths, including the Roku TV operating system, The Roku Channel and advertising platform.
Indeed, Roku said it has reached a major milestone with $1 billion in initial ad commitments going forward.
Wall Street remains less confident. Roku’s stock is down more than 25% in the secondary market.