Roku Shares Surge on Q3 Results

Roku shares shot up more than 25% in after-hours trading Wednesday after the company posted Q3 revenues of $124.8 million, up 40% versus the year-ago period.

Those revenues were paired with a net loss of $46.2 million, impacted by a $37.7 million charge included in other expenses related to an increase in the company’s preferred stock warrant liability. The Q3 pro forma basic net loss per share, excluding the impact of the charge, was 10 cents, compared to a net loss per share of 17 cents a year earlier.

Roku, which went public in late September, said it now expects full year revenues to reach or exceed $500 million for 2017, up from $500 million in the prior year.

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Among business units within Roku, Q3 player revenues were $67.25 million, up 4%, while Platforms revenues, which includes advertising, subscription revenue sharing, and licensing fees from TV makers that have integrated Roku’s OS, rocketed 137%, to $57.52 million.

Roku ended Q3 with 16.7 million “active” accounts, up by 48%, or 5.4 million, year-over-year. In its letter to shareholders, Roku said more than half of new accounts in Q3 came from licensed sources, calling that a “milestone” for the company and citing research showing that one in five smart TVs sold in the U.S. and Canada in the period were licensed Roku-powered TVs.

Streaming hours on Roku’s platform grew 58%, to 3.8 billion hours, while the average revenue per user rose 37%, to $12.68, on a trailing 12-month basis.

Roku said player units grew 35% year-over-year, while revenue growth was partially offset by a 23% decline in average selling price due primarily from a mix shift to lower priced players like the $29.99 Roku Express.

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Roku expects Q4 revenues of $175 million to $190 million and a net loss of $8 million to $14 million.