01—Abstract
Summary
Summary of the 10-Q filed August 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Roku, Inc. reported second-quarter 2024 results in this Form 10-Q, with total net revenue of $968.2 milliona for the three months ended June 30, 2024, up from $847.2 million a year earlier, and a net loss of $34.0 million, compared with $107.6 million in the prior-year quarter.
Platform revenue rose to $824.3 millionb, driven by higher streaming services distribution revenue, including Premium Subscriptions through The Roku Channel, while devices revenue grew to $143.8 million, led by Roku-branded TVs. Devices gross profit remained negative at $(15.2) million, while platform gross profit was $439.9 million. Operating loss narrowed to $71.2 million from $126.0 million, with lower research and development and sales and marketing expenses partly offset by higher general and administrative costs.
Key operating metrics improved: Streaming Households reached 83.6 million as of June 30, 2024, up from 73.5 million, and Streaming Hours were 30.1 billion for the quarter, up from 25.1 billion. ARPU was essentially flat at $40.68c versus $40.67, which the company attributed to a rising share of Streaming Households in international markets. Trailing twelve-month Free Cash Flow was $317.9 million, compared with negative $169.3 million a year earlier, and cash and cash equivalents stood at $2,058.5 million.
The company also recorded restructuring charges of $10.7 milliond in the quarter, primarily related to impairments of office lease right-of-use assets. The filing also highlights ongoing risks, including a $981.0 million estimated contracted revenue backlog, customer concentration in devices (Amazon, Best Buy and Walmart accounted for 76% of devices revenue in the quarter), and a pending Walmart acquisition of Vizio that the company says could increase competition. The company reported an accumulated deficit of $1,382.4 million and a discrete tax benefit of $11.1 million from releasing a valuation allowance on certain foreign deferred tax assets.
02—Key points
Key Highlights
- Total net revenue of $968.2 million for Q2 2024, up from $847.2 million, with platform revenue at $824.3 million and devices revenue at $143.8 million.
- Net loss narrowed to $34.0 million ($0.24 per share) from $107.6 million ($0.76 per share) in Q2 2023.
- Streaming Households reached 83.6 million, up from 73.5 million, and Streaming Hours reached 30.1 billion, up from 25.1 billion.
- ARPU was $40.68, essentially flat versus $40.67, as international household growth outpaced monetization.
- Trailing twelve-month Free Cash Flow was $317.9 million, versus negative $169.3 million a year earlier.
- Devices gross profit remained negative at $(15.2) million, while platform gross profit was $439.9 million.
- Cash and cash equivalents were $2,058.5 million, and the company recorded $10.7 million of restructuring-related impairment charges in the quarter.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2024, Roku lost $0.04.
- Revenue$968.2M100.0%
- Cost of revenue−$543.5M56.1%
- Gross profit$424.7M43.9%
- Operating costs−$495.9M51.2%
- Operating income−$71.2M7.4%
- Interest, other & tax$37.3M3.9%
- Net income−$34.0M3.5%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 2, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $968.18M$847.19M | +14.3% |
| Cost of Revenue | $543.48M$468.92M | +15.9% |
| Gross Profit | $424.70M$378.27M | +12.3% |
| R&D Expenses | $175.48M$192.39M | −8.8% |
| Operating Expenses | $495.94M$504.23M | −1.6% |
| Operating Income | -$71.24M-$125.96M | +43.4% |
| Net Income | -$33.95M-$107.59M | +68.4% |
| EPS (Basic) | $-0.24$-0.76 | +68.4% |
| EPS (Diluted) | $-0.24$-0.76 | +68.4% |
| Shares Outstanding (Basic) | 144.34M141.03M | +2.3% |
| Shares Outstanding (Diluted) | 144.34M141.03M | +2.3% |
05—Questions
Frequently Asked Questions
How did Roku's revenue and profitability change in the second quarter of 2024?
Total net revenue rose to $968.2 million from $847.2 million, with platform revenue up to $824.3 million and devices revenue up to $143.8 million. The operating loss narrowed to $71.2 million from $126.0 million, and the net loss narrowed to $34.0 million from $107.6 million.
What drove the growth in platform revenue?
The filing attributes the increase primarily to higher revenue from streaming services distribution, such as revenue share on content subscriptions and Premium Subscriptions through The Roku Channel, along with slightly higher advertising revenue despite continued weakness in the media and entertainment vertical.
Is Roku's user base and engagement growing?
Yes. Streaming Households rose to 83.6 million from 73.5 million as of June 30, and Streaming Hours reached 30.1 billion for the quarter versus 25.1 billion a year earlier. However, ARPU was roughly flat at $40.68, as growth in international households outpaced monetization.
How concentrated are Roku's devices sales?
Amazon, Best Buy, and Walmart in total accounted for 76% of devices revenue for the three months ended June 30, 2024, compared with 67% a year earlier, according to the risk factors section. The filing also notes that the pending Walmart acquisition of Vizio could increase competition.
What is Roku's liquidity position?
Cash and cash equivalents totaled $2,058.5 million as of June 30, 2024, and trailing twelve-month Free Cash Flow was $317.9 million. Management believes existing cash is sufficient to meet working capital, capital expenditure, and known contractual obligations for the next twelve months and beyond.
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