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Roku Shares are Surging Ahead of Earnings
Roku shares are jumping before earnings today. It’s a great day for tech stock sin general with the Nasdaq Composite up .83% today following outstanding earnings from Meta (Nasdaq: META) and Microsoft (Nasdaq: MSFT).
What Wall Street Expects When Roku Reports Tonight
Here are the consensus expectations for Roku’s second quarter earnings:
- Revenue: $1.072 billion
- Adjusted EPS: -$.16
- Free Cash Flow: $57.7 million
And Wall Street will also be closely watching Roku’s guidance, so here’s what’s expected from the company’s third quarter earnings.
- Revenue: $1.169 billion
- Adjusted EPS: $.11
- Free Cash Flow: $99.1 million
Roku (Nasdaq: ROKU) shares have been soaring in recent months. The company’s shares are up 66% since April 4th. Can the rally continue?
We’ll be hosting a live blog breaking down Roku’s Q1 earnings. The moment earnings go live, we’ll be posting news and analysis. All you have to do is leave this page open and new updates will automatically appear as we post them.
Before diving into what Wall Street expects next quarter, let’s take a look at what Roku reported when it last released earnings.
What Roku Reported Last Earnings
Roku last reported on May 1st. Shares dropped the next day, but are up 37% since. Here’s what Roku reported:
ROKU | Roku, Inc. Q1’25 Earnings Highlights:
- Adj. EPS: $(0.19)
; UP +46% YoY - Revenue: $1.021B (Est. $1.070B)
; DOWN -1% YoY - Adj. Gross Margin: 43.6% ; UP +10 bps YoY
- Net Income: $(27.4)M ; UP +46% YoY
- Free Cash Flow: $298.4M; DOWN -30% YoY
Q1’25 Outlook:
- Revenue: $1.070B ±11% (Est. $1.070B)
- Platform revenue is expected to grow 14% YoY with a gross margin of roughly 51%.
- Devices revenue is projected to decline about 10% YoY with a gross margin of negative 10%.
Q1 Segment Performance:
- Platform Revenue: $881M ; UP +17% YoY
- Devices Revenue: $140M ; UP +11% YoY
Other Key Q1 Metrics:
- Adj. Operating Income: $(57.7)M ; UP +20% YoY
- Adj. Operating Expenses: $502.8M ; UP +9% YoY
- R&D Expenses: $184.6M ; UP +2% YoY
- Cash and Cash Equivalents: $2.256B; UP +9% YoY
- Inventories: $135.3M; DOWN -14% YoY
CEO Commentary:
- Anthony Wood: “In Q1 we grew Platform revenue 17%, in line with our outlook, with contributions from both video advertising and streaming services distribution activities. Our scale in the U.S. exceeds half of broadband households and continues to grow. We remain focused on our initiatives to grow Platform revenue, Adjusted EBITDA, and Free Cash Flow.”
CFO Commentary:
- Dan Jedda: “While there is more macro uncertainty than normal, we are providing our best outlook based on our current visibility and what we are observing in our business. We remain vigilant and adaptable as market conditions evolve.”
Strategic Updates:
- Roku announced an agreement to acquire Frndly TV, a subscription streaming service that offers over 50 live TV channels, on-demand video, and cloud-based DVR for an affordable price. This acquisition is intended to support Roku’s focus on growing Platform revenue and Roku-billed subscriptions.
The post Live: Roku (Nasdaq: ROKU) Earnings Analysis appeared first on 24/7 Wall St..
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Author: Eric Bleeker
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