Roku Has 80 Million Active Accounts, But Issues Warning for 2024

Streaming hardware and service provider Roku delivered solid earnings and active users growth in the most recent quarter, beating expectations. But the firm warned that 2024 would be “challenging” for it and other media and entertainment firms, and Wall Street responded by sending its stock price spiraling downward.

“As the leading TV streaming platform, Roku aims to make television better for everyone,” Roku founder and CEO Anthony Wood said. “In a world where one day all TV will be streamed, we’re immensely proud to be the programmer of the home screen for more than 80 million active accounts around the globe, connecting people directly to what they love to watch.”

Roku reported that it earned a net loss of $104.2 million on revenues of $984.4 million in the quarter ending December 31, a gain of 14 percent year-over-year (YOY). Of that, $828.9 million came from services—the Roku platform, which is mostly ads—while $155.6 million came from set-top box and other hardware sales. Roku’s services/ads business is hugely profitable, while its devices business is not. The overall loss came from the firm’s operating expenses.

As noted in the quote above, Roku ended the quarter with 80 million active accounts, up 14 percent from the 70 million it reported in the year-ago quarter, and up by 4.2 million users quarter-over-quarter. Roku claims that its active accounts base is bigger than the subscribers of the six largest traditional pay-TV providers combined. Streaming hours were up 21 percent to 29.1 billion, and average revenue per user was $39.92, down 4 percent YOY.

This past year was notable because it was the first time in several years that the firm didn’t upgrade its set-top boxes devices broadly, as it had been doing each September. Instead, it focused its hardware efforts on first- and third-party Roku-branded TVs, and it revealed this week that it will expand those options over the next few months.

Looking ahead, Roku says it expects to maintain its previous quarter growth rate in the current quarter. But this growth will be difficult to maintain over the year. As a result, Roku stock fell 14 percent in after-hours trading.