Roku's Quarterly Revenue Hits High After Passing 50 Million Active Accounts
Streaming hours surged to 17 billion during the fourth quarter as the company added new services Peacock and HBO Max to its offering.
Roku had more than 51 million active accounts at the end of 2020, a year in which it flexed its muscle as a distribution platform with new streaming services.
That marks a 39 percent increase in accounts for the company, which makes connected TV devices on which it operates a streaming video platform. Roku users streamed 17 billion hours during the final three months of the year, an increase of 55 percent year-over-year.
During the period, Roku added HBO Max to its third-party channel lineup. The company had been locked in negotiations with HBO Max-owner WarnerMedia but was able to work out a deal ahead of the release of Wonder Woman 1984 on the direct-to-consumer service. NBCUniversal also reached a carriage deal for streamer Peacock in late September.
Roku had its best quarter ever in terms of revenue and gross profit. Quarterly revenue was up 58 percent to $650 million. Net income for the quarter was 53 cents per share.
The Roku Channel, where the company offers a curated selection of free, ad-supported programming, is growing nearly twice as fast as the overall Roku platform and reached 63 million people in the fourth quarter.
In January, Roku acquired Quibi's library of shortform programming in a deal said to be worth significantly less than $100 million. Roku could use the 75-show catalog — which will be available for free with advertising on its curated Roku Channel later this year — to help it launch a more robust slate of original programming for its users. The company recently solicited applications for a lead production attorney which, according to the LinkedIn job description, would work on its "expanding slate of original content," including episodic and feature length projects.
Quibi was "a unique opportunity" for Roku, general manager of platform business Scott Rosenberg told reporters in a Thursday afternoon call, adding that the company "felt it was great original content to be had at an attractive price." He added that the deal was driven by Quibi's finished, or nearly finished, content but that Roku did acquire the option to pick up future seasons of some Quibi titles.
But Rosenberg stopped short of confirming that Roku will invest to produce its own original programming. "There are many avenues for us to grow the Roku Channel," he said, noting, that "anything we do in terms of content for the Roku channel has to be appropriate for our size and for an AVOD business model. In the case of Quibi those conditions were met."
Roku expects to bring in between $478 million and $493 million in revenue during the first quarter of 2021 and to have a quarterly net less between $23 million and $16 million.
Roku shares, which closed the day down less than 1 percent, were trading up nearly 2 percent after hours.