Media streaming company Roku Inc (NASDAQ:ROKU) delighted the market with its first earnings report as a public company.
The stock shot up almost 50% after the company said net revenue grew 40% year-on-year to US$124.8mln, driven by platform revenue growth of 137% to US$57.5mln.
The number of active accounts rose 5.4% to 16.7mln from 11.3mln in the same quarter of 2016, with Roku streaming a mind-boggling 3.8bn hours (in aggregate) of programming, up 58% year-on-year.
Average revenue per user rose 37% to US$12.68 from US$9.26 the year before.
Despite all the excitement, the company is still making a loss, but the size of the loss is declining rapidly.
Underlying earnings, or EBITDA, in the third quarter were negative at –US$3.67mln, compared to LBITDA of US$10.74mln in the third quarter of 2016.
The company said it could actually break even on the year, as it guided to fall year LBITDA of zero to US$6mln.
Full-year net revenue should fall within the range of US$175mln to US$190mln, the company advised.
“The third quarter of 2017 was a milestone quarter for Roku. We priced an initial public offering, refreshed our entire line of players, released Roku OS 8 with exciting new features for Roku TV, expanded reach significantly and continued to innovate and monetize our platform. We entered 2017 with great momentum, and with solid execution throughout the year, we are seeing that momentum continue,” said Anthony Wood, founder and chief executive officer of Roku.
“Overall, we believe in our business trajectory with robust top-line growth, expanding gross margins and decreasing operating losses even while we continue to make significant investments toward our longer term strategic initiatives,” he added.
RBC Capital responded to the update by increasing its target price to US$28 from US$26.
Roku’s shares were up 46% at US$27.52 in early deals.