Roku reported revenue of $645 million during the second quarter against an estimate of $618 million according to wall Street analysts.
Roku Inc (NASDAQ: ROKU) stock dropped over 8.88% in Wednesday’s after-hours trading session to trade around $382.99. The streaming platform provider reported its second-quarter earnings results that beat analysts’ expectations. However, in Q2 Roku reported a slowdown in streaming services and a tight hardware margin.
According to the earnings report, Roku reported revenue of $645 million during Q2 2021 against an estimate of $618 million. Additionally, the company reported earnings per share of $0.52 versus a Wall Street estimate of $0.13 per share.
As the coronavirus restrictions eased during the second quarter, Roku recorded a decline in viewership. Moreover, more people preferred outdoor activities after a year-long social distancing protocol. Notably, the company recorded a decline of 1 billion viewership hours to 17.4 billion during the second quarter.
“Consumers sought increased out-of-home entertainment activities (such as dining and travel) in Q2 as a result of pent-up demand and the loosening of COVID-19 restrictions, which led to a broader secular decline in overall TV viewing hours,” the company explained in the report.
Notably, the second saw Roku’s active accounts grow by 1.5 million, closing the quarter with 55.1 million. The average revenue per user (ARPU) grew to $36.46 during the second quarter, up 46% year over a year basis.
Overall, the gross profit for the second quarter came in at $338 million, 130% higher on a year-over-year basis. On the other hand, its revenue has spiked by over 81% during the second quarter in comparison to last year.
Roku Stock and Company’s Performance in Q2
As a technology-based, particularly online company, Roku stocks were among the coronavirus winners. According to metrics provided by MarketWatch, Roku shares are up approximately 150%, 26%, and 38% in the past year, seven months, and three months respectively through Wednesday.
With a market capitalization of approximately $55.32 billion, the company is well-positioned to take up opportunities presented by the market in post-Covid.
According to the company, it expects net revenue of $680 million during the third quarter. Thus would reciprocate to a 51% rise year over year basis. Additionally, the company estimates the third quarter will record a gross profit of $320 million, representing a turnover of 49% from last year.
“We are pleased with our strong performance in the second quarter and are excited about the road ahead. Roku remains very well positioned to benefit from the long-term secular trend of audiences, content, and advertisers shifting to TV streaming around the globe,” the company concluded in the earnings report.
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