Expectations are very high for Roku’s (NASDAQ: ROKU) fourth-quarter earnings report this Thursday. The company’s last earnings announcement was a hit, with revenue jumping 73% on what Roku called “robust demand for TV streaming products.”
Roku stock has skyrocketed lately, rising more than 100% over the past three months. This bump in share price has been driven mainly by rapid revenue and account growth influenced by the arrival of new streaming services on the platform. Pandemic-induced lockdown periods that have forced people to consume more media has also helped the company bring in more consumers. This growth in users has helped lift its key metrics including engagement, membership, and average revenue per user.
Netflix reported sales figures in late January which showed robust demand for streaming services in late 2020. So if demand for streaming services is rising, Roku stands to benefit. Roku shareholders will be looking to get updates on the company’s advertisers’ engagement and for details on some big-picture plans for 2021.
When is Roku’s earnings date?
Roku reports earnings for the fourth quarter of 2020 on Thursday, 18th of February at 5:00 pm Eastern Time.
How can I listen to Roku’s earnings call?
To listen to the call and to access the transcript, as well as the shareholder’s letter and the financial statements for the quarter, all you need to do is go to Roku’s investor relations page.
What to expect from Roku’s earnings
Wall Street expects Roku’s to lose $0.07 per share on revenue of $613.07 million. In the year-ago quarter, the company lost $0.13 per share on revenue of $411.23 million.
Shareholders are optimistic about the company’s earnings release after seeing Netflix and Hulu’s report which showed growth trends in the streaming sector. The emergence of Disney+ and Apple TV+ are also expected to expand Roku’s platform as more households continue to cut their cable package and decide to opt for online streaming services. As a result, analysts predict that more advertisers are going to start switching from selling on standard TV channels to streaming services. To ensure the company has a good library of content to attract users, which in turn will draw advertisers, Roku signed a deal with Quibi in January to buy some of their content.
Roku said it experienced accelerating growth in active accounts and revenue in 2020. The streaming platform company said it ended the year with around 51.2 million active accounts — up 39% for the year which represented a gain of about 14.3 million accounts. Shareholders will be keen to see confirmation of the company continuing to grow active account numbers in the December quarter to ensure it is keeping up with estimates.
Roku also made a deal with AT&T in December to bring WarnerMedia’s HBO Max to the Roku channel store. HBO Max and HBO had almost 61 million subscribers across its different channels worldwide in the fourth quarter of 2020, whereas Roku only had just over 50 million. These figures suggest that there are clearly a lot of streaming users still out there for Roku to capture.
Shareholders will be looking forward to hearing Roku’s plans to capture more users in 2021 alongside initiatives to bring in more advertisers.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.
Financial Writer at MyWallSt
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