Roku Delivers Solid Quarter, Expands Services Offerings

Posted on August 9, 2018 by Paul Thurrott in Music + Videos with 10 Comments

Roku on Wednesday reported strong earnings growth, dramatically outpacing expectations. Of more interest to actual users, perhaps, the firm also announced it is expanding its video streaming service beyond its own set-top boxes and TVs.

Roku generated a gross profit of $77.8 million—up 107 percent year-over-year—on revenues of $156.8 million—up 57 percent YOY—in the quarter ending June 30. But the firm displayed other forms of strength in an increasingly competitive market, with active account up 46 percent, to 22 million, and streaming hours up 57 percent, to 5.5 billion hours.

“Roku delivered particularly strong Q2 2018 financial results,” the firm noted in its earnings announcement. “Robust active account growth expanded the reach and scale of our TV streaming platform, while at the same time Roku captured a bigger share of TV advertising budgets and continued progress on monetization. We believe Roku is well-positioned to seize the significant opportunities being created by the transition to streaming.”

Roku’s traditional “platform” business, which consists of its living room set-top boxes and other hardware, saw strong growth in the quarter, thanks largely to the Roku TV. But Roku’s solid footing is also helping the firm expand the reach of its free, ad-supported streaming video service, called The Roku Channel, beyond its own ecosystem.

The Roku Channel launched last fall on Roku’s devices, offering free, ad-supported movies and TV shows. But it is now available on the web and via select Samsung smart TVs in the United States too. And it will expand to other devices, platforms, and locales in the coming weeks. Roku has said that it will support Android, iOS, and Windows specifically.

Tied to this expansion, Roku is also updating the user interface on its hardware devices to provide a new Feature Free top-level menu item that provides free content from The Roku Channel and other apps, including those from broadcast TV networks, Sony Crackle, Tubi, and more.

“By expanding The Roku Channel to the Web, we’re broadening the access points to high-quality, free streaming entertainment,” Roku VP Rob Holmes said in a prepared statement. “With Featured Free, we’re making it easy for our customers to see the great, free content already available on the Roku platform in one place, while creating value for our content providers by connecting them with Roku’s growing audience.”


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