We’re in the home stretch for earnings season, and a strong report can send a stock higher. Shares of Roku (NASDAQ: ROKU) initially moved sharply skyward after the company posted encouraging financial results on Thursday afternoon following the market’s closing bell.
Roku was already turning heads before this week’s blowout fourth-quarter performance. The shares had nearly doubled since bottoming out this past summer. The strong results are kicking things up a notch higher, so let’s take a closer look at some of the reasons the Roku story is getting even better.
The top line is always a good place to start. Net revenue for the final three months of 2024 topped $1.2 billion, just ahead of both the $1.15 billion analysts were targeting and the $1.14 billion Roku was modeling back in October. The record revenue is a 22% increase, the strongest year-over-year percentage jump for Roku since early 2022. Platform revenue topped $1 billion for the first time.
The bottom line brought an even bigger beat. Its net loss narrowed to $0.24 a share, a lot less red ink than the $0.43 Wall Street pros were expecting. Roku came through with large bottom-line beats in every quarter in 2024. Deficits aren’t fun, but Roku keeps clawing its way back to return to profitability.
There are now 89.8 million streaming households on the Roku platform, a net gain of 12%, or 9.8 million homes, from where it was at the start of last year. An important milestone was reached, as Roku now has a presence in more than half of the country’s broadband households. Roku competes against some of the wealthiest companies in the planet, and it’s gobbling market share at their expense.
This isn’t a passive audience that Roku is reaching. These homes spent 127.1 billion hours streaming through Roku during the fourth quarter, an 18% jump over the prior year’s holiday quarter. Streaming hours keep growing faster than the number of households on the platform, and that’s a good thing. It means the average viewer is spending more time cradling the Roku remote.
When the streaming services pioneer launched The Roku Channel, it was easy to wonder if the platform operator was flying too close to the sun. One thing that sets Roku apart from other streaming hubs is its agnosticism. It plays nice with most apps, giving viewers thousands of options without being perceived as trying to steer folks to its own premium offerings.
The Roku Channel is a free ad-supported channel. Roku has made shrewd grabs for content that it can serve up to generate ad revenue while also making its platform more engaging. And that approach is working, as The Roku Channel became one of the five most popular channels on its hubs earlier in 2024. It’s still a speedster. Streaming hours have increased 82% over the past year, and it now reaches households with roughly 145 million people.
