Roku’s revenue increased by 79% year-over-year.
Roku revealed a great first-quarter earnings report on Wednesday, beating investor expectations in almost every category. The company’s revenue is up by 51% and its active accounts grew by 8.3 million.
In the first quarter, the company’s total streaming hours increased by 74% to 8.9 billion. This means that the average user spends more than three hours a day streaming Roku’s content. Roku has seen its total streaming growth take off over the past year.
As a result of this rapid growth, the platform’s revenue has increased 79% from a year earlier. The company’s shares were up 8% in after-hours trading on Wednesday.
Key takeaways from Roku’s first-quarter results
Hardware sales and smart TV licensing have been a huge growth driver for the company. During the first quarter of 2019, a third of all smart TVs sold were Roku TVs. This makes it the most popular smart TV operating system in the U.S.
There are many advantages to Roku of having its customers use a Roku TV platform. First, Roku’s home screen will be the first thing a user sees every time they turn on their TV. This increases the odds that Roku becomes the default program they use.
And Roku TV gives the company unique insights into its customers. For instance, the company can see what shows are most popular and in turn, advertise those shows on its home screen. This provides a better customer experience and increases user engagement.
Finally, the Roku Channel is the company’s ad-supported streaming channel and it’s been growing at a fast pace since launching in 2017. In fact, the sale of video ads was one of the companies biggest revenue drivers.
According to company management, ad-supported streaming is growing more quickly than subscription streaming. Consumers can only afford to pay for so many streaming services so the ad-supported content is a good choice.
The streaming wars can only help Roku
More companies are starting to offer streaming services, including Disney and Apple. Roku management said they feel like the increase in streaming services positions Roku well in the market.
The more options consumers have, the more time they’ll spend streaming on Roku. And the company plans to start offering more premium services, which should help increase revenue as well.
All in all, Roku is well-positioned for strong future growth, with the company investing heavily in growing its business in the U.S. and abroad. The U.S. is Roku’s primary market but the company is focused on growing internationally as well.