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Sep 30, 2020
Roku Q3 2020 Earnings Report
Roku delivered strong financial and operational results driven by demand for TV streaming, advertising growth, and content distribution partnerships.
Key Takeaways
Roku's Q3 2020 results showcased significant growth, with total net revenue increasing by 73% year-over-year to $452 million. The company added 2.9 million active accounts, reaching a total of 46 million, and streaming hours increased to 14.8 billion. Platform revenue grew by 78% year-over-year, and gross profit increased by 81%.
Total net revenue grew 73% year-over-year to $452 million.
Platform revenue increased 78% year-over-year to $319 million.
Roku added 2.9 million incremental active accounts in Q3 2020, reaching 46 million.
Streaming hours increased to 14.8 billion.
Revenue by Segment
Forward Guidance
Roku anticipates Q4 year-over-year revenue growth to be in the mid-40% range, with platform revenue accounting for roughly two-thirds of total revenue. They plan to keep Q4 player gross margins close to breakeven and expect Q4 platform gross margins to be in the mid-50% to 60% range. The sequential expense growth rate from Q3 to Q4 is expected to be in line with last year, driven primarily by headcount and sales and marketing expense growth.
Positive Outlook
- Overall Q4 year-over-year revenue growth will likely be in the mid-40% range.
- Platform revenue to account for roughly two-thirds of total revenue.
- Plan to keep Q4 player gross margins close to breakeven.
- Expect Q4 platform gross margins to be in the mid-50% to 60% range.
- Sequential expense growth rate from Q3 to Q4 to be in line with last year driven primarily by headcount and sales and marketing expense growth.
Challenges Ahead
- Potential for COVID-19 or economic-related disruptions.
- Potential impact to historical consumer spending levels or shopping patterns as we enter the holiday season.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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