Roku sees deceleration in quarterly revenue growth, shares fall
The Roku company logo is displayed on a building in Austin, Texas, U.S., October 25, 2021. REUTERS/Mike Blake
Roku on Thursday forecast that its revenue growth will slow further in the fourth quarter, overshadowing its first operating profit since 2021 and sending shares down over 5 per cent after the bell.
The company expects revenue growth of 12 per cent for the current quarter, below the 14 per cent reported in the third quarter and the 15 per cent growth in the second quarter.
The streaming platform, whose stock has risen over 34 per cent so far this year, also sees a slowdown in growth at its platform segment — which includes ad sales and subscriptions — to 15 per cent in the fourth quarter.
While ad spending has been shifting from traditional television to streaming, advertisers have remained cautious with their budgets amid economic uncertainty, creating a challenging environment for platforms dependent on ad revenue.
Roku operates in a highly competitive advertising industry, facing intense competition from the streaming devices and operating systems of tech giants such as Amazon's Fire TV, Google's Chromecast and Apple TV.
For the fourth quarter, Roku expects revenue of $1.35 billion, slightly ahead of estimates of $1.32 billion, according to data compiled by LSEG.
Roku's operating income turned positive for the first time since 2021, reaching $9.5 million in the third quarter ended September 30.
It reported third-quarter total revenue of $1.21 billion, in line with estimates. Roku also saw a 5 per cent fall in its devices revenue, compared to last year.
