Roku Tops Wall Street Estimates with $1 Billion Revenue Quarter, But Stock Drops on Q4 Guidance

Roku Inc. has made significant strides in its third quarter, exceeding Wall Street analysts’ expectations with a revenue of $1.06 billion, marking the company’s first billion-dollar revenue quarter. This represents a 16% increase in revenue compared to the same period last year.

Despite the impressive revenue growth, Roku reported a narrower-than-expected loss of $0.06 per share for the third quarter, which was better than the analyst estimate. The company’s Platform revenue grew to $908 million, with a Platform gross margin of 54%, up 80 basis points quarter-over-quarter. Average revenue per user (ARPU) remained flat, however.

However, the positive financial performance was overshadowed by the company’s fourth-quarter profit guidance, which led to a significant drop in Roku’s stock price. Shares of Roku fell over 14% following the announcement, reflecting investor concerns about the company’s future profitability.

The stock price decline is part of a broader trend, with Roku’s stock having dropped by 20.22% in recent trading, reflecting a market cap of $11.215 billion and a year-to-date change of -15.44%).