Roku Inc (ROKU.O) forecasted first-quarter revenue above analyst estimates on Wednesday. Pinning its growth hopes on its streaming devices and content platform.
Following the closing bell, shares of the San Jose, California-based company increased by nearly 12 percent.
Roku is profiting from the ongoing trend of consumers abandoning traditional cable packages, in favor of subscription-based streaming services.
The company’s push for more quality content on its own streaming channel has strengthened its subscriber and advertiser base.
Countless advertisers have been forced to reduce their marketing budgets.
This is because of record-high inflation rates as well as lingering economic uncertainty.
“Notwithstanding the stiffening advertising budgets in the fourth quarter, commercial expense on the Roku platform surpassed the overall ad and traditional TV markets in the U.S.,” the company reported.
Adding that ad spend among verticals including restaurants, travel, consumer packaged goods, and health and wellness appears to be improving thus far in the first quarter.
According to Refinitiv data, net revenue for the quarter ending December 31 exceeded analysts’ expectations of $801.7 million.
The streaming service anticipates net revenue of $700 million for the first quarter. According to data from Refinitiv, analysts expected $690.63 million.
During the fourth quarter, Roku reported a net loss of $237,2 million, or $1.70 per share, compared to a profit of $23.7 million, or 17 cents per share, a year earlier.
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