01—Abstract
Summary
Summary of the 10-K filed February 16, 2024. Cited figures are marked; the original filing is the authoritative source.
Roku, Inc. (Class A common stock listed on Nasdaq as ROKU) reported net revenue of $3,484,619 thousanda ($3.48 billion) for 2023, up 11% from $3,126,534 thousand in 2022.
Platform revenue rose 10% to $2,994,105 thousandb, driven mainly by streaming services distribution such as Premium Subscriptions on The Roku Channel, partially offset by weaker advertising, especially media and entertainment promotional spending. Devices revenue rose 18% to $490,514 thousand, helped by Roku-branded TVs launched in March 2023. Active Accounts reached 80.0 million, up 14%, and Streaming Hours reached 106.0 billion, up 21%.
Profitability weakened sharply. Gross profit increased 6% to $1,522,615 thousandc, but total operating expenses rose 17% to $2,314,992 thousand, including a $356.1 million restructuring charge. The company reported a loss from operations of $792,377 thousand and a net loss of $709,561 thousand, or $(5.01) per share, compared with a net loss of $498,005 thousand in 2022.
ARPU declined 4% to $39.92d, which management attributed to a growing share of Active Accounts in international markets where the company is prioritizing scale and engagement over monetization. The balance sheet remained liquid, with cash and cash equivalents of $2,025,891 thousand and no outstanding debt at December 31, 2023, after the Credit Facility was repaid in February 2023.
Operating cash flow was positive at $255,856 thousand, though this was well above the net loss because of large non-cash charges of $972.7 million, including stock-based compensation and impairments. Management stated that its existing cash is sufficient for the next twelve months and beyond.
02—Key points
Key Highlights
- Revenue grew 11% to $3.48 billion, with platform revenue up 10% to $2.99 billion and devices revenue up 18% to $490.5 million.
- Active Accounts grew 14% to 80.0 million and Streaming Hours grew 21% to 106.0 billion.
- ARPU fell 4% to $39.92, which the company attributed to a larger share of Active Accounts in international markets.
- Net loss widened to $709.6 million ($5.01 per share) from $498.0 million in 2022, including a $356.1 million restructuring charge.
- Operating expenses rose 17% to $2.31 billion, with sales and marketing up 23% and research and development up 11%.
- Cash and cash equivalents were $2.03 billion at year-end, with no debt outstanding after the February 2023 repayment of the Credit Facility.
- Devices gross loss narrowed to $43.9 million from $90.6 million, while platform gross profit rose 2% to $1.57 billion.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2023, Roku lost $0.20.
- Revenue$3.48B100.0%
- Cost of revenue−$1.96B56.3%
- Gross profit$1.52B43.7%
- Operating costs−$2.31B66.4%
- Operating income−$792.4M22.7%
- Interest, other & tax$82.8M2.4%
- Net income−$709.6M20.4%
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 16, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $3.48B$3.13B | +11.5% |
| Cost of Revenue | $1.96B$1.69B | +16.4% |
| Gross Profit | $1.52B$1.44B | +5.7% |
| R&D Expenses | $878.47M$788.91M | +11.4% |
| Operating Expenses | $2.31B$1.97B | +17.4% |
| Operating Income | -$792.38M-$530.89M | −49.3% |
| Net Income | -$709.56M-$498.00M | −42.5% |
| EPS (Basic) | $-5.01$-3.62 | −38.4% |
| EPS (Diluted) | $-5.01$-3.62 | −38.4% |
| Shares Outstanding (Basic) | 141.57M137.67M | +2.8% |
| Shares Outstanding (Diluted) | 141.57M137.67M | +2.8% |
05—Questions
Frequently Asked Questions
Why did the net loss widen despite revenue growth?
Operating expenses grew faster than gross profit. Total operating expenses rose 17% to $2,314,992 thousand, and gross profit rose only 6%. The restructuring charge of $356.1 million, which spanned research and development, sales and marketing, general and administrative, and cost of revenue, contributed to the increase. The loss from operations was $792,377 thousand, compared with $530,888 thousand in 2022.
What drove platform revenue growth in 2023?
Platform revenue rose $282.7 million, or 10%, mainly from streaming services distribution, including revenue share on content subscriptions and Premium Subscriptions through The Roku Channel. Advertising revenue declined slightly, driven primarily by weakness in media and entertainment promotional spending.
Why did ARPU decline?
ARPU fell 4% to $39.92 from $41.68. The company said the decrease reflects an increasing share of Active Accounts in international markets, where it is currently focused on growing scale and engagement rather than monetization.
How is Roku's liquidity position?
At December 31, 2023, cash and cash equivalents totaled $2,025.9 million, and the company had no outstanding debt. Operating activities provided $255.9 million of cash in 2023. Management believes existing cash will be sufficient to meet working capital, capital expenditure, and known contractual obligations for at least the next twelve months and beyond.
06—Continue