Roku ROKU reported fourth-quarter 2023 loss of 55 cents per share, narrower than the Zacks Consensus Estimate of a loss of 65 cents. The company had incurred a loss of $1.70 per share in the year-ago quarter.

Revenues increased 13.5% from the year-ago quarter’s level to $984.43 million and beat the consensus mark by 2.58%. Growth of The Roku Channel’s active accounts and streaming hours drove fourth-quarter performance.

Active account net adds were 4.2 million in the fourth quarter, taking the total active accounts to 80 million globally, reflecting greater engagement and more monetization opportunities.

Roku has become the No. 1 TV streaming platform by hours streamed in the United States, Canada and Mexico. Globally, users streamed a record of 29.1 billion hours in the fourth quarter, up 2.4 billion hours from the prior quarter.

The average revenue per user declined 4% from the prior-year quarter’s levels to $39.92 (on a trailing 12-month basis).

For the eighth consecutive quarter, The Roku Channel was among the top five channels by both active account reach and streaming hour engagement on the Roku platform in the United States. The Roku Channel’s active accounts are approaching half of all broadband households in the United States.

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Quarter Details

Platform revenues (84.2% of revenues) increased 13.3% year over year to $828.9 million through strong contributions from content distribution and video advertising.
Devices revenues (15.8% of revenues) jumped 14.6% from the year-ago quarter’s level to $155.6 million.

Roku operating system (OS) was the #1 selling TV OS in the United States for the fifth year in a row. In the fourth quarter, Roku OS was the #1 selling TV OS in both Canada and Mexico.

In the fourth quarter, Roku partnered with Tennis Channel to launch T2, the 24-hour sports network’s second channel, on The Roku Channel in the United States. T2 unlocked free, year-round access to live and daily coverage of the sport’s best players and signature events for the estimated U.S. households with 100 million people.

Operating Details

Gross margin, as a percentage of total revenues, expanded 250 basis points from the year-ago quarter’s level to 44.5%.

Operating expenses decreased 11.8% year over year to $542.1 million. As a percentage of total revenues, the metric contracted to 55.1% from 70.8% in the year-ago quarter.

Research & development decreased 16.7% to $183.8 million year over year. Sales & marketing and general & administrative expenses contracted 11.1% and 2.4% on a year-over-year basis to $264.6 million and $93.7 million, respectively.

In the third quarter, adjusted EBITDA was $43.4 million against negative adjusted EBITDA of $34.4 million in the year-ago quarter.

Operating loss was $104.2 million in the reported quarter compared with an operating loss of $249.9 million in the year-ago quarter.