(Reuters) -Roku forecast fourth-quarter revenue above Wall Street estimates after posting better-than-expected revenue growth in the previous three months on Wednesday, sending its shares up nearly 20% in extended trading.
A pandemic winner, Roku is benefiting from the ongoing trend of people ditching their traditional cable packages and flocking to subscription-based streaming services. The company’s push towards more original content on its own streaming channel have only helped it to strengthen the influx of subscribers and advertisers. Meanwhile, a steady uptick in the advertising market, as evidenced by the strong results from Meta Platforms, Alphabet and Snap, is also aiding the business at Roku.
“We had a solid rebound in video ads in Q3 and we expect the YoY growth rate of video ads in Q4 to be similar,” CEO Anthony Wood and chief financial office Dan Jedda said in a letter to shareholders.
The streaming platform said it expected net revenue of $955 million in the quarter ending December. Analysts were expecting $952 million, according to LSEG data.
It forecast adjusted core profit of $10 million, compared to the estimate of $53 million core loss, helped in part by the company’s cost reduction measures.
Total net revenue grew 20% to $912 million in the quarter ending Sept. 30, comfortably beating analysts’ consensus estimate of $855.2 million, according to LSEG. The company reported adjusted core profit of $43 million, compared with expectations of a $31.4 million core loss.
Total active accounts globally were 75.8 million, a net increase of 2.3 million accounts, sequentially.
Roku had said in September it would reduce its workforce by 10% and close some offices.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Krishna Chandra Eluri)
