shares of Roku Shares soared 8% on Friday after the video streaming company reported fourth-quarter results that beat analysts’ expectations and provided strong guidance.
Here’s how the company performed based on analyst forecasts compiled by LSEG:
Earnings per share: 53 cents vs. 28 cents Revenue: $1.39 billion vs. $1.35 billion
“The biggest driver for our subscription business is the long-term trend of more and more services moving toward premium subscription-like services rather than offering their own apps,” Roku CEO Anthony Wood told CNBC’s Julia Boorstin on Friday. “I think that’s really the core driving force.”
Roku executives said in a letter to shareholders that the fourth quarter was the company’s “largest quarter in history” for net additions to premium subscriptions. The program allows users to subscribe to various streaming services, including HBO Max and Paramount+, using a single login on the Roku platform.
The company said it plans to roll out premium subscription bundles this year.
Revenue increased 18% from $1.03 billion in the same period last year. Net income totaled $80.5 million, or 53 cents per share, compared with a loss of $35.5 million, or 24 cents per share, a year ago.
Roku said it expects sales of $1.2 billion for the current fiscal year, higher than analysts’ expectations of $1.16 billion, according to Street accounts. Full-year sales are expected to be $5.5 billion, beating analysts’ estimates of $5.34 billion, according to Street Accounts.
Last May, Roku acquired live TV subscription streaming service Frndly for $185 million. The company also recently launched an ad-free streaming service called Howdy for $2.99 per month.
Wood told investors on the company’s earnings call that Howdy could become a “very large-scale service” over time. Roku also said it expects to reach more than 100 million streaming households this year.
Analysts at Rosenblatt Securities upgraded Roku’s stock to buy from neutral on Friday, citing strong fourth-quarter results and several potential near-term growth drivers for the company.
“The big picture — Roku has established itself as a strong gatekeeper for streaming in the U.S. — half of all streaming on U.S. TVs goes through the device,” the analysts wrote.
Rosenblatt noted that the partnership with has increased its ability to monetize streaming. Amazona new advertising tool for small businesses with tweaks to the front page for advanced advertising.
Correction: Roku reported fourth-quarter earnings of 53 cents per share. In previous versions, the diagram features were incorrect.
