Roku soars past revenue expectations as it bets on streaming devices to boost growth

Over a month after Roku announced its first Roku-branded TVs, which will launch in the U.S. in spring 2023, the hardware company reported its quarterly earnings this afternoon, which showed Roku beat its own revenue expectations, reporting a total net revenue of $867.1 million for Q4.

The company previously cautioned investors of a shaky fourth quarter, predicting total revenue at around $800 million, a 7.5% decrease year over year. In Q3, Roku had total revenue of $761 million. Analysts predicted a year-over-year decline of 7% to $804.19 million.

However, the company's Q1 2023 guidance is still cautious of the current macroenvironment. Roku predicts a total net revenue of $700 million.

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Also, Roku recently announced that it surpassed 70 million active accounts globally in 2022, an impressive milestone for the company. It had 65.4 million active accounts in Q3. For comparison, rival Tubi, Fox's free ad-supported streaming TV service, revealed yesterday that it reached 64 million monthly active users.

Plus, Roku had a 19% year-over-year increase in global streaming hours, with a total of 87.4 billion streaming hours in 2022 and 23.9 billion for the fourth quarter.

Despite the growth in accounts, Roku continued to see operating losses widen to $249.9 million, compared to a loss of $147 million in the prior quarter. Due to the economic challenges, Roku wrote in an SEC filing in November that it planned to cut 200 jobs in the U.S. between Q4 2022 and Q1 2023.

"We plan to continue to improve our operating expense profile to better manage through the challenging macro environment while building on our platform's monetization and engagement tools and partnerships," the company wrote in its letter to shareholders. "Through a combination of operating expense control and revenue growth, we are committed to a path that delivers positive adjusted EBITDA for full year 2024. Our platform and industry leadership positions us well for reaccelerated revenue growth as the ad market recovers and the shift to TV streaming continues."

The company added that Roku's operating system (OS), which will power the forthcoming Roku-branded TVs, grew to 38% of units sold in the U.S. Q4 2022, per NPD. This means Roku OS continues to be among the top-selling smart TV OS in the U.S. The new Roku-branded TVs, announced last month, were another significant move for the company.

Roku recently closed a few deals with major companies to boost its streaming business. For instance, the company closed a deal with Warner Bros. Discovery, getting 2,000 hours of movies and TV shows, including HBO's "Westworld," "The Bachelor," "Cake Boss" and "Say Yes to the Dress," among others.

Earlier this week, the company struck an exclusive programming deal with Pocket.watch, a kids and family entertainment studio, to bring more children's content to the Roku Channel.

Also, Roku partnered with DoorDash earlier this month to give customers a free six-month subscription to DashPass and launched interactive shoppable ads for DoorDash businesses on Roku devices.

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