01—Abstract
Summary
Summary of the 10-Q filed April 26, 2024. Cited figures are marked; the original filing is the authoritative source.
Roku, Inc. reported its Form 10-Q for the quarter ended March 31, 2024.
Total net revenue was $881.5 milliona, up 19% from $741.0 million in the prior-year quarter, with platform revenue of $754.9 million (up 19%) and devices revenue of $126.5 million (up 19%). Loss from operations narrowed to $72.0 million from $212.5 million, reflecting lower operating expenses of $460.3 million (down 16%) following restructuring efforts in 2023. Net loss was $50.9 million, or $0.35 per share, compared with a net loss of $193.6 million, or $1.38 per share, a year earlier.
Key operating metrics showed Streaming Households of 81.6 million as of March 31, 2024, up 14% from 71.6 million, and Streaming Hours of 30.8 billion for the quarter, up 23% from 25.1 billion. ARPU was flat at $40.65b versus $40.67. Devices gross profit was negative at $(6.1) million, while platform gross profit was $394.4 million.
Cash and cash equivalents totaled $2,055.7 millionc, and trailing twelve-month Free Cash Flow was $426.8 million, compared with negative $448.1 million a year earlier. The company stated that its existing cash balance is sufficient to meet working capital, capital expenditure, and known contractual obligations for the next twelve months and beyond.
Remaining performance obligations were $1,030.9 milliond, with approximately 48% expected to be recognized over the next 12 months. Anthony Wood, the CEO, adopted a Rule 10b5-1 trading arrangement for up to 300,000 Class A shares, expiring December 9, 2024.
02—Key points
Key Highlights
- Total net revenue rose to $881.5 million, up 19% year over year, driven by both platform and devices segments.
- Loss from operations narrowed to $72.0 million from $212.5 million, as total operating expenses fell 16% to $460.3 million.
- Net loss was $50.9 million, or $(0.35) per share, versus a net loss of $193.6 million, or $(1.38) per share, in Q1 2023.
- Streaming Households reached 81.6 million, up 14% from 71.6 million, while Streaming Hours grew 23% to 30.8 billion.
- ARPU was flat at $40.65 compared with $40.67 a year earlier.
- Devices gross profit was negative at $(6.1) million, while platform gross profit was $394.4 million.
- Trailing twelve-month Free Cash Flow was $426.8 million, compared with negative $448.1 million in the prior-year period.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2024, Roku lost $0.06.
- Revenue$881.5M100.0%
- Cost of revenue−$493.2M55.9%
- Gross profit$388.3M44.1%
- Operating costs−$460.3M52.2%
- Operating income−$72.0M8.2%
- Interest, other & tax$21.2M2.4%
- Net income−$50.9M5.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 26, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $881.47M$740.99M | +19.0% |
| Cost of Revenue | $493.18M$403.39M | +22.3% |
| Gross Profit | $388.29M$337.60M | +15.0% |
| R&D Expenses | $180.46M$220.09M | −18.0% |
| Operating Expenses | $460.33M$550.06M | −16.3% |
| Operating Income | -$72.04M-$212.46M | +66.1% |
| Net Income | -$50.85M-$193.60M | +73.7% |
| EPS (Basic) | $-0.35$-1.38 | +74.6% |
| EPS (Diluted) | $-0.35$-1.38 | +74.6% |
| Shares Outstanding (Basic) | 143.75M140.33M | +2.4% |
| Shares Outstanding (Diluted) | 143.75M140.33M | +2.4% |
05—Questions
Frequently Asked Questions
How did Roku's revenue and profitability change in the quarter ended March 31, 2024?
Total net revenue increased 19% to $881.5 million. Loss from operations improved to $72.0 million from $212.5 million, and net loss narrowed to $50.9 million from $193.6 million. The filing attributes the reduction in operating expenses mainly to restructuring efforts during 2023.
What drove growth in platform revenue?
Platform revenue increased $120.3 million, or 19%, to $754.9 million. The filing attributes the increase primarily to higher advertising revenue, which it links to an overall improvement in the advertising market, and to higher streaming services distribution revenue, including revenue share on content subscriptions and Premium Subscriptions through The Roku Channel.
Is Roku's devices business profitable?
No, not in this quarter. Devices revenue rose 19% to $126.5 million, but cost of revenue for devices rose 29% to $132.6 million, producing a devices gross loss of $(6.1) million compared with gross profit of $3.6 million a year earlier. The filing cites higher manufacturing costs, driven mainly by Roku-branded TVs and smart home products, along with higher freight costs.
Does Roku have enough cash to fund its operations?
The company reported cash and cash equivalents of $2,055.7 million as of March 31, 2024. It stated that this balance is expected to be sufficient to meet working capital, capital expenditure, and material cash requirements from known contractual obligations for the next twelve months and beyond. Operating cash flow for the quarter was $46.7 million, compared with negative $153.4 million a year earlier.
Did any insiders adopt trading plans during the quarter?
Yes. Anthony Wood, Chief Executive Officer, President, and Chairman, adopted a Rule 10b5-1 trading arrangement on March 13, 2024, covering up to 300,000 Class A common shares, with an expiration date of December 9, 2024. The arrangement was adopted by the Wood Revocable Trust.
06—Continue