Roku Tops 65M Active Accounts, but Ad Revenue Struggles

Despite adding 2.3 million active accounts in the third quarter, Roku is still experiencing a slowdown in TV advertising spend, a trend that’s plagued the industry. Roku reached 65.4 million active accounts in the third quarter, a 16% year-over-year increase and up from the 1.8 million it added last quarter. Streaming grew by 1.1 billion hours to hit 21.9 billion, reversing the decline from last quarter, a 21% year-over-year jump. “Certainly there are a lot of macroeconomic challenges and uncertainty out there,” CFO Steve Louden told reporters ahead of the company’s earnings call. “They're pressuring both consumers and businesses, including the TV ad market, but our opportunity remains as strong as ever.” Best Buy and Roku Partner for Season-Long Brand Integration in Idea House For the third consecutive quarter, The Roku Channel was once again a top five channel on the platform in terms of active account reach and streaming hour engagement. Streaming hours on the AVOD also grew more than 90% year over year. The company pointed to the success of titles like Roku Originals The Rich Eisen Show and Emeril Tailgates, in partnership with Coca-Cola, as a driver for growth. Roku’s series Idea House: Mountain Modern also expanded its partnership with Best Buy this quarter, coming as a spinoff from This Old House, which Roku acquired last year as part of an expansive original content strategy. Still slowing down Despite the slowdown in the ad marketplace, the company remains confident that TV viewership will continue to shift to streaming. “Our primary challenge here is macro headwinds that we’re seeing that are affecting the whole market, not Roku-specific,” Alison Levin, vp of ad revenue and marketing solutions, said. “We're still in the early innings of ad revenue moving from linear TV to streaming. The temporary economic cycles don't change the long term opportunity that we have at Roku.” Roku is expecting year-over-year platform and player revenue in the fourth quarter to be lower—around $800 million—with total gross profit of roughly $325 million. However, the platform's biggest original film to date, Weird: The Al Yankovic Story, which stars Daniel Radcliffe, comes out on Friday, and the company expects it to drive further viewership on The Roku Channel. Roku and T-Mobile Get Weird Ahead of Biopic Premiere Shifting tides Roku’s chief financial officer Steve Louden will be departing in 2023 after helping recruit his successor and assisting with the transition. The executive first announced he would leave Roku in 2019, but he decided to remain at the company until now. Louden will be the second executive to exit in recent months, with the company’s platform chief Scott Rosenberg announcing his departure this past January. The connected TV platform also just hired Charlie Collier as its first president of Roku Media. Collier stunned the landscape when he exited his role as CEO of Fox Entertainment for the Roku role.

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Roku Tops 65 Million Active Accounts, but Advertising Revenue Lags

Plus, CFO Steve Louden is leaving the company (again)

Mollie Cahillane

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Mollie Cahillane