Roku presented its financial results for the second quarter of 2024, topping Wall Street expectations. The streamer announced a 2% drop in operating expenses and a 39% increase in devices revenue, which led to a total revenue of $968.2 million, up 14%. Net loss was $33.95 million, or 24 cents per share, compared with a net loss of $107.6 million in the year-earlier period. Analysts projected Roku to report Q2 revenue of $937.9 million and a net loss of 44 cents per share, per financial data provider LSEG. Gross profit was $425 million, up 12% year over year, as total operating expenses declined 2% to $495.9 million.
Roku said streaming households were 83.6 million, a net increase of 2.0 million from Q1 2024 and up 14% year over year, while streaming hours on its platform were 30.1 billion, up 5.0 billion hours from the year prior.
In the platform segment, which encompasses ad sales, content sales and subscription-revenue sharing, revenue was up 11% to $824.3 million. Roku said its streaming services distribution business grew faster than platform revenue overall, due primarily to price increases for subscription-based apps on the Roku platform. Devices revenue increased 39%, to $143.8 million.
“We delivered solid results in Q2,” said Roku CEO Anthony Wood and CFO Dan Jedda in the letter to shareholders. “The Roku Home Screen, which is the beginning of our viewers’ streaming experience, reaches U.S. households with over 120 million people every day. We achieved our fourth consecutive quarter of positive Adjusted EBITDA and Free Cash Flow (TTM) as a result of top-line growth and ongoing operational efficiencies. Importantly, Roku is executing well against initiatives to accelerate Platform revenue growth, which include maximizing ad demand for Roku, leveraging our Home Screen as the lead-in for TV, and growing Roku-billed subscriptions.”
For Q3, Roku estimates total net revenue of $1.01 billion, up 11%, with platform revenue growing 9% and devices revenue growing 24%. The company expects Q3 total gross profit of $440 million and adjusted EBITDA of $45 million. “We remain confident in our ability to accelerate Platform revenue in 2025 and beyond as we maximize ad demand, lean into our Home Screen as the lead-in for TV, and grow Roku-billed subscriptions,” Wood and Jedda stated.
As part of boosting the Roku Channel’s slate of free, ad-supported programming, the company landed exclusive multiyear rights for Major League Baseball’s Sunday Leadoff live games, a package previously with NBCUniversal’s Peacock. Also, Roku announced its adoption of Unified ID 2.0 (UID2), an identity solution developed by the Trade Desk that will let Roku Media become interoperable with multiple programmatic advertising systems. With UID2, Roku “is empowering advertisers to deliver more personalized ad experiences across Roku’s inventory and devices at scale,” according to the company.
Moreover, according to Parks Associates’ recently released “Tech Ecosystem Dashboard,” Roku is the most popular brand of streaming media players, followed by Amazon. Parks Associates’ consumer survey of 8,000 internet households revealed 43% of streaming media player (SMP) owners report using Roku the most often. 35% of SMP owners report they use an Amazon-branded SMP the most often to watch video content.
“Historically, Amazon and Roku have dominated the streaming media player market, and our research shows their dominance continues,” said Sarah Lee, Research Analyst, Parks Associates. “Other competitors such as Apple and Google have held on to their respective shares but do not show much growth as of yet.”
Streaming media players have increased their market share in U.S. households, with 46% of U.S. internet households owning at least one of the devices, but they trail smart TVs, which are in 68% of these households. SMPs are also behind smart TVs as the most commonly used device to watch video.
Among U.S. internet households that own at least one internet-connected entertainment device, 56% consider the smart TV as the primary device for consuming video, while 34% consider an SMP as their primary viewing device. Together, smart TVs and streaming media players are the primary viewing device for 90% of households, while other devices such as gaming consoles and smart Blu-ray players are now squeezed out.
“Today, smart TVs are much more affordable, as are streaming media players,” Lee said. “These devices offer consumers cost-effective solutions as well as an ecosystem-consistent experience,” she concluded.
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