Roku stock (ROKU) is soaring once again, up on massively heavy volume, after its first earnings report as a public company easily surpassed revenue expectations as platform sales more than doubled. Let us discuss:
Overall, revenues grew 40% to $124.8M and gross profit was up 92% to $49.9M. In operations, active accounts were up 48% to 16.7M; streaming hours grew 58% to 3.8B; and average revenue per user was up 37% to $12.68. Net revenue breakout by segment: Player, $67.25M (up 3.8%); Platform, $57.5M (up 137.1%). For Q4, it’s guiding to total net revenue of $175M-$190M (vs. consensus for $177.1M); a net loss of $8M-$14M; and EBITDA of -$6M to break-even (vs. -$7.4M expected). However, there is rampant speculation over an acquisition that occurred MONTHS AGO:
Contributing to the rise in Roku stock, it acquired Danish audio start-up Dynastrom, adding evidence to the supposition that the streaming-device maker has its eyes on entering the smart-speaker market currently dominated by Amazon.com. The deal went down for $3.5M in September, with Dynastrom’s co-founders getting 108,332 additional Roku shares as part of the transaction (Roku priced its IPO in late September at $14/share; it’s now at $29.19). Dynastrom works on a “software solution for multi-room audio experiences working flawlessly over standard Wi-Fi,” it says, and Roku had previously begun adding employees specializing in far-field voice control.
Quad 7 Capital remains bullish on Roku stock.
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