Roku announced its financial results for the second quarter of 2022, reporting total net revenue growth of 18% yearly to US$764 million. Moreover, platform revenue increased 26% year over year to US$673 million, and the gross profit was up 5% yearly to US$355 million.
Meanwhile, the company revealed that it had added 1.8 million incremental active accounts during the period to reach 63.1 million. Furthermore, streaming hours were 20.7 billion, a decrease of 0.2 billion hours from last quarter, and average Revenue Per User (ARPU) grew to US$44.10 (trailing 12-month basis), up 21% year over year. During this period, the company surpassed a milestone with US$1 billion in Upfront commitments.“In Q2, there was a significant slowdown in TV advertising spending due to the macro-economic environment, which pressured our platform revenue growth. Consumers began to moderate discretionary spend, and advertisers significantly curtailed spend in the ad scatter market (TV ads bought during the quarter). We expect these challenges to continue in the near term as economic concerns pressure markets worldwide,” the company wrote in a letter to its shareholders.
“In response, we took steps in Q2 to significantly slow both operating expense and headcount growth. While our revenue and gross profit growth have slowed, we continue to win advertising share and grow active accounts. We remain confident in our industry leadership in TV streaming, the size of the opportunity in front of us, and our unique assets, including the Roku TV OS, The Roku Channel, and our ad platform,” Roku added.
For the second half of the year, Roku forecasts that advertising spend, particularly in the scatter market, will continue to be negatively impacted. The company also believes that consumer discretionary spend will continue to moderate, pressuring both Roku TV and Roku player sales. Considering these factors, the company’s Q3 outlook is for total net revenue to increase approximately 3% year over year to US$700 million. Roku anticipates a total gross profit of roughly US$325 million, and adjusted EBITDA of negative US$75 million. “We will remain focused on growing our market leadership by further advancing our technology and brand, and continuing to execute our strategy,” Roku said.