Roku cut its operating losses to $212.5 million in the first quarter of 2023, after several quarters of growing losses.
This is an improvement on Q4 operating losses of $249.9 million, and comes after Roku put in place a plan to limit spending going forward, with a plan to achieve positive adjusted earnings before interest in 2024. , taxes, depreciation and amortization.
The total number of active accounts increased to 71.6 million, from 70 million in the previous quarter. Streaming hours reached 25.1 billion, an increase of 4.2 billion hours or 20 percent year over year, and more than the 23.9 billion in the previous quarter.
Roku reported total net sales of $741 million, above their expectation of $700 million and a net profit loss of $193.6 million, compared to their expectation of a loss of $205 million.
As part of its plan to cut costs, and amid a tough advertising environment, Roku announced in late March that it would cut an additional 200 jobs, or about 6 percent of its workforce, after cutting about 200 jobs earlier in November. deleted.
With the most recent round of layoffs, Roku was expecting $30 million to $35 million in charges. The company also planned to vacate or sublease “certain office facilities”.
All this comes after Roku made a gloomy forecast for its fourth-quarter earnings, which covered the holiday season and tends to be the strongest ad quarter. Roku CEO Anthony Wood said at the time that companies were canceling their fourth-quarter campaigns in anticipation of a possible recession. Revenue in the fourth quarter was better than expected, but there was still concern that Roku would be weighed down by the advertising decline.
For the first quarter, Roku reported platform revenue of $635 million, down 1 percent year-over-year, and ARPU was $40.67 (on a 12-month basis), down 5 percent year-over-year. The company noted that advertising spend in travel, health and wellness, financial services, and media and entertainment remained under pressure.
The company expects concerns about the uncertain macro environment to persist through 2023 and continue to impact consumers. In turn, Roku said it expects total net sales of approximately $770 million, total gross profit of approximately $335 million and adjusted EBITDA of -$75 million in the second quarter.
“Consumers remain under pressure from inflation and recession fears, so discretionary spending is likely to remain contained. Accordingly, we expect the advertising market to look much the same in the second quarter as it did in the first quarter, with certain verticals improving advertising spend (travel and health and wellness) while others remain under pressure (M&E and financial services),’ Roku said.
On Wednesday, Roku announced a new partnership with Instacart, allowing consumer goods advertisers to better understand whether viewers purchase products on Instacart after seeing an ad on the Roku platform.
At the end of January, Roku Media president Charlie Collier promoted David Eilenberg, who was chief of originals, to oversee the media division’s content. He succeeded Rob Holmes, who was a vice programmer and worked at Roku for six years.
Dan Jedda, who was previously the CFO at Stitch Fix, will join Roku as CFO starting May 1.
The company has invested in new content, including a recently announced docuseries for the Roku channel titled WWE: Recruitswith WWE wrestler John Cena who will produce and appear in the eight-episode series.
In March, Roku launched its Roku-branded TVs at Best Buy. The company did not provide an update on sales of the new offering, but noted positive reviews from the media about the quality of the devices.