Despite tough competition in the streaming space, Roku reported solid results in Q1 2024, beating revenue expectations, with total net revenue up 19% YoY to $882 million and gross profits up 15% to $388 million.
Streaming Households were also up, hitting 81.6 million, a net increase of 1.6 million from Q4 2023 and streaming Hours grew to 30.8 billion, up 5.7 billion hours YoY.
“Globally, our users streamed 30.8 billion hours in Q1,” management said in a letter to shareholders. “Streaming Hours grew 23% YoY as viewers continue to shift to TV streaming. During the same period, hours on traditional TV in the U.S. fell 13% YoY (Nielsen). We also grew engagement per household globally, with Streaming Hours per Streaming Household per day of 4.2 hours in Q1 2024, up from 3.9 hours in Q1 2023.”
The company also reported its third consecutive quarter of positive Adjusted earnings before interest depreciation and amortization (EBITDA) and free cash flow.
Despite beating analyst expectations and seeing strong growth in usage at a time when streaming media devices are facing more competition from streaming platforms owned by smart TV manufacturers, the company’s stock fell on Friday morning by 7.75% at 12 p.m. ET based on management’s assessment of an increasingly competitive landscape in 2024.
“Looking ahead, we face difficult year-over-year growth rate comparisons within streaming service distribution activities,” the letter to shareholders explained. “This headwind is due to past price increases and a higher mix shift toward ad-supported offerings. In Q2, we estimate Total net revenue of $935 million, Total gross profit of $410 million, and Adjusted EBITDA of $30 million. Looking into the second half of the year, we anticipate normal seasonal spend in Sales & Marketing for Devices, which will cause Adjusted EBITDA to slightly moderate relative to the first half of the year. We remain confident in our ability to accelerate the growth of Platform revenue and continue to grow Adjusted EBITDA, and Free Cash Flow in 2025 and beyond.”
