CFRA Research media and entertainment analyst Tuna Amobie discusses how streaming competition affects consumer costs.
Roku Chief Executive Anthony Wood calls his company’s purchase of short video content from Quibi “economical”, suggesting in a quarterly call on Thursday that Roku would consider other acquisitions at reasonable prices.
In January, Roku agreed to acquire exclusive multi-year rights to the content of Quibi Holdings, an extinct subscription service for short programming, for less than $ 100 million.
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Roku will integrate the 75 Quibi series acquired with The Roku Channel, its app for movies and TV shows with ads, says Wood. “We will continue to look more broadly at all the different types of content that we can purchase and will be disciplined to ensure that the purchase price of the content fits – whether licensed or purchased or whatever the financial details – – fit into our AVOD [ad-supported video on demand] business model, “adds Mr. Wood.
Woods’ comments came at a time when Roku made a profit in the December quarter and gave better-than-expected projections for the first quarter, driven by the continued momentum during the coronavirus pandemic. Here’s what you need to know:
PROFIT: Roku had a profit of $ 67.3 million, from a loss of $ 15.7 million a year earlier. On a per-share basis, earnings were 49 cents per share. Analysts surveyed by FactSet had expected a loss of 5 cents per share.
| Ticker | Safety | Last | Change | Change % |
|---|---|---|---|---|
| ROKU | ROKU INC | 452.99 | -3.98 | -0.87% |
RECIPE: Net revenue for the quarter increased to $ 649.9 million, from $ 411.2 million, compared to analysts’ forecast of $ 619 million.
YEAR: Roku ended the year at a loss of $ 17.5 million and $ 1.78 billion in revenue, compared to a loss of $ 59.9 million and $ 1.13 billion in revenue a year earlier.
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ACCOUNTS: Roku ended the year with 51.2 million active accounts.
PANORAMA: In this quarter, Roku projected a loss of $ 16 million to $ 23 million and $ 478 million to $ 493 million in revenue, compared to the projected loss from the analysis of approximately $ 52 million and $ 463.2 million in revenue.
For the year, the company said that year-over-year revenue growth would fall below expected levels in the first and second quarters of 2021 and said that the 2021 gross margin will likely be around 40% as a platform margins remain quite stable And operates the Player segment with a gross margin close to zero to continue driving device sales and increasing active accounts. He said he hopes to return to a “robust OPEX year after year [opeating expenses] organic growth rates similar to 2019 (compared to most of 2020, where we restricted staff growth). “
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PANDEMIC: Roku saw higher rates of account activation and hours of streaming during the pandemic. She added more than 14 million active accounts in 2020. Strong demand for streaming TV products, company officials said, as well as strong growth in advertising and expanded content distribution partnerships are helping the company.