Roku Inc (NASDAQ:ROKU), the streaming device manufacturer, has surprised markets with robust second-quarter results and an optimistic assessment of prospects driven by an uptick in ad sales.
The rebound in advertising expenditure from companies in response to easing inflation and a favourable shift in consumer sentiment led to shares rising by 9% in post-market New York trading.
Roku executives revealed in a shareholder letter that while certain ad sectors were showing signs of improvement, the company anticipates more significant growth once the ad market fully recovers.
With an estimated net revenue of $815 million expected for Q3, Roku's projection surpasses analysts' predictions.
Increased ad spending was particularly notable in consumer products, health and wellness industries, according to Roku CFO Dan Jedda.
The company's strong guidance follows the positive results of digital giants Meta Platforms Inc (NASDAQ:FB) and Alphabet Inc (NASDAQ:GOOG) driven by higher digital ad sales.
Roku also added 1.9 million active accounts in Q2, taking the total to 73.5 million. Overall, Roku's net revenue for Q2 increased by 11% to $847.2 million.