Roku (NASDAQ: NASDAQ:ROKU), the online TV streaming service provider, has reported a robust Q3 FY2023 performance, surpassing expectations with a 19.8% YoY revenue increase to $912 million. The company also anticipates Q4 revenue to be around $955 million, in accordance with analysts' forecasts.
Despite a GAAP loss of $2.33 per share, a decline from the previous year's loss of $0.88 per share, Roku's Free Cash Flow surged by 85.4% to $239.1 million. In contrast, the Gross Margin (GAAP) fell from 46.9% to 40.4%. However, active accounts saw a significant increase, growing by 10.4 million YoY to total 75.8 million.
The company, originally a spinoff of Netflix (NASDAQ:NFLX), manufactures hardware players for various streaming TV services and credits its successful quarter to content distribution, video advertising, and the launch of Roku-branded TVs in March 2023. For the first time on a trailing 12-month basis, Roku's Streaming Hours exceeded 100 billion, and it reported positive Adjusted EBITDA.
In September, Roku announced cost reductions and has since been focusing on enhancing service usage and customer loyalty through its consumer subscription model. The company views monetization as a vital component of future investments.
As part of their future strategy, Roku aims to further reduce its OpEx growth rate while striving for positive adjusted EBITDA by full year 2024. The company plans to achieve this while continuing to invest in scale and engagement.
InvestingPro Insights
As per InvestingPro's real-time data, Roku's market capitalization stands at $8450.0M. The company's revenue for the last twelve months as of Q2 2023 was $3216.61M, reflecting a 5.69% growth. However, the Price to Earnings ratio is at -12.48, indicating a negative earnings trend.
InvestingPro Tips provide further insights. Roku holds more cash than debt on its balance sheet, suggesting a stable financial position. However, the company's earnings per share are on a declining trend, and net income is expected to drop this year. Additionally, the stock price movements have been quite volatile, with the price falling significantly over the last three months.
For a deeper dive into Roku's financials and more valuable insights, the InvestingPro platform offers an additional 7 tips related to the company's performance. This can be a valuable resource for potential investors and financial enthusiasts alike.
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