- Roku shares fell more than 8% in after-hours trading Wednesday after the company reported second-quarter earnings that beat expectations but showed a slowdown in streaming TV viewing and tight hardware margins.
- The company's total net revenue grew 81% year over year in the quarter to $645 million.
Roku shares fell more than 8% in after-hours trading Wednesday after the company reported second-quarter earnings that beat expectations but showed a slowdown in streaming TV viewing since last quarter and tight hardware margins.
Here's how the company did compared with Refinitiv consensus estimates:
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- EPS: $0.52 per share vs. estimate of $0.13 per share
- Revenue: $645 million vs. estimate of $618 million
The company said streaming hours decreased by 1 billion hours from the first quarter of 2021, totaling 17.4 billion in the second quarter. The company cited consumers seeking more out-of-home entertainment activities such as dining and travel in the second quarter because of pent-up demand and the loosening of Covid-19 restrictions. But Roku's streaming hours were still up 19% globally year over year, the company said.
In its shareholder letter, it also said "tight component supply conditions and shipping constraints" continued increasing costs faster than expected.
"In Q2, we insulated consumers from increased costs for Roku players, which resulted in Player gross margin turning negative in the quarter," the letter says.
The company's total net revenue grew 81% year over year in the quarter to $645 million. Meanwhile, it said its platform revenue exceeded half a billion dollars in the quarter for the first time in the segment's history, reaching $532 million, driven by content distribution and advertising.
Roku also remarked on the advertising upfronts, where advertisers commit parts of their annual budget to TV advertising. The company said it earned double the dollar commitment compared with last year and that 42% of all advertisers who committed to Roku during upfronts did not participate last year.