Roku provides Q1 estimates

Joanna Estrada
April 16, 2020

Apparently, not all companies are being cut down by COVID-19.

Roku, like other streaming-based businesses, is reaping strong results from higher usage - but has continuing concerns about the remainder of the year.

The company expects Q1 streaming hours will total 13.2 billion, a 49% year-over-year increase.

The company estimates that it had 39.8 million active accounts as of March 31, a net increase of almost 3 million since the end of 2019.

Speaking about changes to marketing budgets due to the coronavirus pandemic, Roku CEO Anthony Wood said: "We have been working closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix which has been affected by social distancing".

The increased hours in streaming will also mean more cash for the company. That is: total net revenue of between $307 million-$317 million; gross profit between $139 million-$144 million; adjusted ebtida (earnings before interest, taxes, depreciation and amortization) from negative $18 million to negative $23 million; and a net loss of between $55 million-$60 million.

"While we believe that our offerings to consumers, content providers and advertisers will enable our company to deliver value in these uncertain times, the wider business and consumer impacts, as well as the duration of the pandemic, are unclear and thus we are withdrawing our prior 2020 outlook", Roku CFO Steve Louden said in a statement.

Keep-at-home edicts through the coronavirus pandemic drove up Roku's streaming hours and energetic consumer accounts for the primary three months of 2020 - however the financial uncertainty attributable to the disaster led the streaming platform firm to withdraw its earlier steerage for the complete yr.

"Whereas we anticipate some entrepreneurs to pause or scale back advert investments within the close to time period, we consider that the focused and measurable TV advertisements and distinctive sponsorship capabilities that Roku gives are extremely useful to manufacturers in the present day", Wooden stated in an announcement. Initially, analysts expected this feature to flatten growth, but it was more than offset by increased viewership by those sheltering in place. This however is being mitigated by an acceleration in new account growth and viewing at the end of Q1, from people on lockdown at home.

Roku will release first-quarter results on May 7, 2020.

Ethen Kim Lieser is a Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek and Arirang TV.

Other reports by Click Lancashire

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