(Reuters) - Roku Inc beat Wall Street estimates for holiday-quarter sales and forecast full-year revenue above expectations on Thursday, as the video streaming device maker benefited from the launch of new streaming services from Walt Disney and Apple.
Shares of the company rose 6% after the bell.
Roku expects full-year revenue between $1.58 billion and $1.62 billion, while analysts were expecting $1.58 billion, according to IBES data from Refinitiv.
Walt Disney Co's streaming platform Disney+ launched here in November and reached 10 million sign-ups in its first day, while Apple Inc also introduced its streaming service Apple TV+ in the same month.
Streaming device makers have benefited alongside platforms like Netflix Inc and Amazon.com Inc’s Prime Video as consumers cut the cord to cable or satellite TV and shift to subscription-based streaming services.
New services and increased content on the platform is a positive thing for Roku, Chief Financial Officer Steve Louden told Reuters.
“It attracts more users to the platform, it drives more engagement, and that gives us the foundation to help monetize, in one way or the other,” Louden said.
Roku has shifted its focus from device sales to advertising, which is now the company’s fastest-growing revenue stream, to tap the jump in number of streaming services providers.
Advertising is one of the biggest opportunities for Roku as the viewership moves from traditional TV to streaming, Louden added.
The company charges a commission from media companies that stream programming on the free, ad-supported Roku channel.
Roku added 4.6 million active accounts in the fourth quarter, bringing the total to 36.9 million at the end of the year.
“We see the customer adds as an example of Roku’s ability to exploit increasing interest in OTT for new SVOD’s, such as Apple+ and Disney+”, D.A. Davidson analyst Tom Forte said.
Roku’s streaming devices compete with the likes of Amazon Fire TV, Apple TV and Google Chromecast. Amazon said last month it had surpassed 40 million active users globally for its streaming device.
Total net revenue jumped about 49% to $411.2 million, beating analysts’ average estimates of $391.6 million.
The company posted net loss attributable to common stockholders of $15.7 million, or 13 cents per share, in the fourth quarter ended Dec. 31, compared with a profit of $6.8 million, or 5 cents per share, a year earlier.
The loss of 13 cents per share matched Wall Street expectations.
Reporting by Ayanti Bera in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila
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