Roku delivered mixed financial results this week, posting a net loss of $112.3 million on revenues of $764.4 million for the quarter ending June 30. The firm missed its financial targets while delivering more new active users than expected.
“In Q2, there was a significant slowdown in TV advertising spend due to the macro-economic environment, which pressured our platform revenue growth,” a Roku letter to shareholders reads. “Consumers began to moderate discretionary spend, and advertisers significantly curtailed spend in the ad scatter market (TV ads bought during the quarter). We expect these challenges to continue in the near term as economic concerns pressure markets worldwide. In response, we took steps in Q2 to significantly slow both operating expense and headcount growth.”
Roku says it had 63.1 million active user accounts as of the end of the quarter, so it added 1.8 million in that time period. Despite the downturn, Roku says it remains confident in its “industry leadership in TV streaming, the size of the opportunity in front of us, and our unique assets, including the Roku TV OS, The Roku Channel, and our ad platform.”
In recent years, Roku has shifted from an all-hardware lineup to one that includes software and services. But Roku’s hardware business also stumbled in the quarter, with a 19 percent drop in revenues to $91 million. And its operating loss of $22 million was worse than the $6.7 million loss this business posted a year ago. Roku’s Platform business, which includes advertising and content revenue-sharing, jumped 26 percent to $673 million.
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