Roku delivered second-quarter result well below Wall Street’s expectations, blaming a slowdown in TV advertising amid economic uncertainty.
The streaming giant said it lost 82 cents a share, compared with a profit of 52 cents in the year-earlier period and posted revenue of $764 million, up 18%. Analysts had expected a loss of 68 cents and revenue of $805 million.
Roku stock plunged more than 25% on the news during after-hours trading. It was in the $63 range, a level not seen since early 2019.
During the quarter, the company wrote in a letter to shareholders, “there was a significant slowdown in TV advertising spend due to the macro-economic environment, which pressured our platform revenue growth. Consumers began to moderate discretionary spend, and advertisers significantly curtailed spend in the ad scatter market (TV ads bought during the quarter). We expect these challenges to continue in the near term as economic concerns pressure markets worldwide.”
The number of active accounts ended the quarter on June 30 at 63.1 million, up 14% from a year ago, but once again, the economic climate had a negative impact. “Reduced consumer discretionary spend is pressuring many verticals including TV and player sales,” the shareholder letter said. “Retailers managed through elevated U.S. TV inventory and temporarily lowered TV prices in Q2, which helped soften the decline in TV unit sales in the quarter.”
Despite the gloom and doom pervading the quarter, Roku said it has completed its upfront advertising sales process, exceeding $1 billion for the first time. It launched original programming in 2021 after acquiring programming originally set up at short-lived mobile subscription startup Quibi and has added a number of original titles since. Originals stream on The Roku Channel, a popular hub for tens of thousands of film and TV titles on demand and hundreds of live, linear channels.
Roku had been a charmed company during the coronavirus pandemic. Like many of the subscription streaming apps found in its menu, it thrived as more and more of its customers were forced to stay home and overall streaming viewership boomed. Eventually, not only did people begin circulating more (though Nielsen has indicated streaming continues to gain record share) but a series of macroeconomic issues hit home. Because Roku has licensed its interface to a number of smart-TV makers and now has a presence in more than one-third of all sets in North America, supply-chain snags and inventory problems meant fewer units on store shelves and fewer new streaming customers.
Like other tech stocks, Roku’s has been beaten up this year, but the damage has been particularly sustained. While shares have recovered from recent 52-week lows, they are less than 20% of their high point of $472. Despite the company’s dominant position in streaming, more and more investors have taken skeptical views of the profit model in the sector and some analysts have questioned the company’s ability to stave off much larger rivals like Amazon or Comcast.
During a conference call with reporters, CFO Steve Loudon said the “severity of the pullback in the ad / scatter market was not expected.” But he also said it was “not unlike” downturns in 2020 and other times of disruption.
"TV" - Google News
July 29, 2022 at 03:22AM
https://ift.tt/6gW18O2
Roku Blames Q2 Earnings Miss On “Significant Slowdown In TV Advertising Spend” Due To The Broader Economy - Deadline
"TV" - Google News
https://ift.tt/EuAXW0n
Bagikan Berita Ini
0 Response to "Roku Blames Q2 Earnings Miss On “Significant Slowdown In TV Advertising Spend” Due To The Broader Economy - Deadline"
Post a Comment