Roku Q2 Results Keep Climbing, But Streaming Hours Dip And Active Account Growth Moderates

Roku posted another strong quarter of results, but its shares fell 9% in after-hours trading due to factors like a dip in streaming hours and flattening growth trajectory of its active accounts.

The streaming provider said net revenue grew 81% year-over-year to $645 million, ahead of Wall Street forecasts. Operating income reached $69.1 million, compared with a loss of $42.2 million in the year-earlier quarter.

Platform revenue, a comprehensive category that includes advertising, jumped 117% to $532 million, reflecting momentum in the burgeoning streaming ad arena. The arrival of new ad-supported players, among them Peacock, Discovery+ and HBO Max with Ads, has boosted results from the ad realm.

Progress in overall streaming and active accounts proved less than inspiring to many investors. Active accounts increased by 55.1 million, an increase of 1.5 million from the first quarter but a more modest gain than in recent quarters.

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Streaming hours totaled 17.4 billion hours, a decrease of 1 billion hours from the first quarter.

In a letter to shareholders, Roku blamed the drop in streaming hours was due to loosening Covid-19 restrictions and the reopening of the economy. The company pointed to a rosier year-over-year story, in which streaming hours gained 19%.

“Consumers sought increased out-of-home entertainment activities (such as dining and travel) in Q2 as a result of pent-up demand and the loosening of COVID-19 restrictions, which led to a broader secular decline in overall TV viewing hours,” the letter said. “On a year-over-year basis, Roku significantly outperformed the industry, with Roku’s streaming hours increasing nearly 19% globally, compared to a nearly 19% decline in traditional TV consumption and a nearly 2% decline in TV streaming across all platforms, for persons 2+ years of age in the U.S., according to Nielsen.”

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