Roku stock appears on first quarter estimates

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Roku’s shares rose more than 9% after office hours on Monday after the company said it expects Q1 revenue to be slightly higher than expected in its previous outlook , and still expects strong growth in active accounts and hours of streaming, with consumers at home in the midst of a refuge. place orders to slow the Covid-19 coronavirus pandemic.

Roku has also withdrawn his forecast for the whole year due to uncertainty about how the pandemic will unfold.

The company estimates total net sales of $ 307 million to $ 317 million for the first quarter; the company’s previous outlook forecasted $ 305 million as the midpoint of total revenue.

The company said it estimated it had 39.8 million active accounts as of March 31, 2020, with a net increase of 3 million since December 31. It also expects its first quarter streaming hours to be 13.2 billion, an increase of 49% over the year. during the year. Roku previously reported that users spent 11.7 billion hours streaming in the fourth quarter of 2019.

The company noted at the start of the first quarter that it had completed the rollout of its “Are you still watching” feature that ends video playback after user inactivity, which should result in slower growth. But this feature has been more than compensated for by use by the people taking refuge there.

“As previously stated, the deployment of this feature will slow the growth of streaming hours; however, from the end of the first quarter, Roku began to see the effects of large numbers of people “taking refuge in the home,” the company said in a statement.
“For Roku, this has resulted in faster growth of new accounts and increased audience. “

Company CEO Anthony Wood said consumers are looking to the platform “now more than ever.”

“We have worked closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix that has been affected by social distancing,” said Wood. “While we expect some marketers to suspend or reduce their advertising investments in the short term, we believe that the targeted and measurable television ads and unique sponsorship capabilities that Roku offers are very beneficial to brands today.” hui. “

The company said it closed the first quarter with cash, cash equivalents, restricted cash and short-term investments estimated at $ 587 million, including a drawdown of its credit facility of $ 70 million renewable. The company will release its first quarter 2020 results on May 7 after the market closes.

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