Roku continued to see operating losses balloon in the fourth quarter to $249.9 million, even as net revenue for the quarter reached $867.1 million and total active accounts crossed 70 million users.
The operating losses represent a 1,270 percent decline compared to the previous year, when Roku reported operating income at $21.4 million during the holiday season. Despite the growing losses, Roku stock surged in after-hours trading by roughly 10 percent due to the company’s better-than-expected revenue performance, which analysts had expected to land closer to $803 million.
Total streaming hours for the quarter rose to 23.9 billion hours, a 23 percent year-over-year increase. Roku’s platform business continued to drive the majority of revenue while the device business — impacted by slower holiday sales — saw an 18 percent decline from the previous year.
For the current first quarter, Roku said it expects the net losses to sustain but shrink to $205 million. Total net revenue is expected to reach $700 million while gross profit will land around $310 million.
“We plan to continue to improve our operating expense profile to better manage through the challenging macro environment, while building on our platform’s monetization and engagement tools and partnerships,” the company said in a letter to shareholders on Wednesday. “Through a combination of operating expense control and revenue growth, we are committed to a path that delivers positive adjusted EBITDA for full year 2024.”
When reporting its third-quarter earnings, company executives warned that the fourth quarter would continue to see a decline in the ad market. As a result, Roku in November said it would lay off around 200 employees in the U.S. as part of an effort to reduce its headcount expenses by 5 percent.
During the fourth quarter, Roku expanded its free, ad-supported (a.k.a. FAST) channel lineup by striking licensing deals with NBCUniversal, the National Hockey League and AMC. In January, Warner Bros. Discovery also made its foray into FAST with Roku for channels that will launch in the spring for around 2,000 hours of on-demand library programming and around titles like Westworld, The Bachelor, Cake Boss, Say Yes to the Dress and FBoy Island.
The device and streaming company also closed out the year with the release of Weird, a satirical biopic about “Weird Al” Yankovic starring Daniel Radcliffe, on The Roku Channel in November. The company did not disclose viewership numbers, but David Eilenberg, then the vp and head of Roku Originals, said in November that the film “drove more first-time, new audiences to The Roku Channel than any past content launch.” (Eilenberg — under new Roku Media President Charlie Collier — was most recently promoted in January to oversee both the Roku Originals and Roku Studios divisions, succeeding Rob Holmes.)
In making his debut on the company’s earnings call with analysts on Wednesday, Collier emphasized Roku’s outside partnerships and its position as a platform. “There’s an emerging appreciation that Roku is not just another player in the streaming wars, but that the streaming wars are actually being fought on the Roku platform, and that is a tremendous advantage for all of us,” Collier told analysts.
On the device side, Roku said it will unveil its own line of TVs this spring. Roku CEO Anthony Wood said the TV lines will help the company move into “higher-end market segments.”
