Roku delivered its first quarter results on Wednesday with better-than-expected revenue and the addition of 1.6 million active streaming accounts in the period. Although the company’s results came in above analyst estimates, Roku told investors that it sees its advertising business remaining challenged.
The company’s revenue for the quarter reached $741 million, up just 1% from the year-ago quarter, and a net loss of $193.6 million.
Notably, the company revealed that it reached 71.6 million active accounts, a 17% year-over-year increase. Streaming hours reached 25.1 billion, up 4.2 billion hours or 20 percent year-over-year. Average revenue per user fell 5% year-over-year to $40.67.
“Similar to our viewpoint during our last earnings call, we expect macro uncertainties to persist throughout 2023,” the company wrote in a letter to shareholders. “Consumers remain pressured by inflation and recessionary fears, and thus discretionary spend is likely to remain muted. Accordingly, we expect the advertising market in Q2 to look much the same as it did in Q1, with ad spend from certain verticals improving (travel and health and wellness), while others remain pressured (M&E and financial services).”
In its letter, Roku wrote that it was the most popular streaming platform for this year’s Super Bowl with approximately half of all streams. The company notes that of those viewers, 12% started the game through either its Sports experience or a game-related ad.
Roku expects Q2 total net revenue of about $770 million, total gross profit of roughly $335 million and Adjusted EBITDA of negative $75 million.
The company’s earning results come a month after Roku conducted a second round of layoffs and let go of 6% of its workforce, or around 200 employees. Roku disclosed the cuts in an SEC filing, explaining that the decision was part of a larger plan to lower its year-over-year operating expense growth and prioritize projects that it believes will have a higher return on investment. The company had laid off 200 U.S. employees back in November, citing economic conditions in the industry.