Market Commentary

Roku Finally Rebounds As Demand Returns

Raza Akram · 1 minute read

Roku (ROKU:US) shares closed 11.1% higher on Thursday after the streaming-video company delivered consensus-beating results and gave a revenue forecast that also exceeded analysts' expectations.

Roku reported an adjusted Ebitda loss of $95.2 million for its fourth quarter, compared to a $86.7 million profit reported for the year-ago period. Analysts were expecting an adjusted Ebitda loss of $132.5 million.

Revenue came in nearly flat at $867.1 million but easily above the consensus of $804.5 million, as well as above the company’s FQ1 guidance, shared in November. The surprisingly high revenue figure for the fourth quarter was led by a nearly 4% increase in the platform revenue - by far Roku’s largest source of revenue generation.

“Despite a difficult macro environment in 2022, we made excellent progress building on our platform, brand, and industry leadership with the addition of nearly 10 million net new active accounts – ending the year with 70 million active accounts globally,” the company said in a shareholder letter.

For this quarter, Roku projects an adjusted Ebitda loss of $110 million on revenue of $700 million, beating the consensus for a loss of $80.4 million on sales of $687.1 million.

Representative Ro Khanna was actively trading Roku shares in 2022. His latest trades include the sale of shares on January 11, when they closed at $48.97 per share. This week’s earnings report, as well as improving risk sentiment, facilitated a rebound in Roku shares in the recent week, pushing the stock to the highest levels since September.