Roku shares skyrocket almost 55% as sales crush Wall Street estimates

• Roku posts a narrower loss than Wall Street estimated, thanks to better-than-expected sales in its first earnings report as a public company.
• The streaming technology company went public in late September in a $252 million IPO.

     

Roku shares popped nearly 55 percent on Thursday, a day after the company posted a narrower-than-expected loss.

In its first earnings report after its initial public offering, the streaming technology company also beat expectations for sales.

Expectations vs. results

• Adjusted EPS: 10 cents loss, excluding items, vs. loss of $1.37 expected by a Thomson Reuters consensus estimate.
• Revenue: $124.8 million vs. estimate of $110.5 million by Thomson Reuters' consensus.

The company went public in late September in a $252 million IPO. Its fortunes have risen alongside services like Netflix that have moved TV viewership online, often using devices made by Roku. Netflix also reported better-than-expected results last quarter.

"Our business really is about building active accounts," CEO Anthony Wood told CNBC's "Squawk on the Street" Thursday. "For us, selling players is just a great way to build up active accounts and we optimize that business around volume of players."

Roku saw a 48 percent year-over-year increase in active accounts, and a 58 percent yearly increase in streaming hours. This quarter, DirecTV Now and Hulu Live were added to the Roku platform.

Wood said a potential tie-up between Disney and 21st Century Fox, adding another over-the-top content-maker to the mix, would only serve to drive business for Roku.

"We are the leading OTT distribution company in the U.S. and so those companies naturally come to Roku for distribution of their content, and we're just a great partner for them," Wood said. "Those companies, as they shift to OTT, that is what's driving our business."

Roku is also in the process of expanding its advertising business to better monetize its viewership. It said the advertising segment has more than doubled this year, reporting that it makes about $12.68 per user, up 37 percent from a year ago on a trailing 12-month basis.

WATCH: Roku's ultimate goal is to be the TV platform

"Everyone over time is going to shift to streaming, and I think importantly, the entire ad business — television ad business, which today is still predominantly on traditional linear TV — is moving to streaming as they follow their viewers to streaming," Wood said.

The company predicted it could break even next quarter, before interest, taxes, depreciation and amortization, if it performs on the high end of estimates.

By Anita Balakrishnan

Source: https://goo.gl/77LBfi

Roku skyrockets on opening day of trading—jumps more than 50%

Roku had $398.6 million in revenue last year, up 25 percent from $319.9 million in 2015.

It posted a net loss of $42.8 million in 2016, steeper than the $40.6 million the year before.

The company priced its 18 million share offering at $14 per share on Thursday, the high end of the expected range.

Roku CEO on IPO: Our goal is to power every TV in the world from CNBC.

Roku skyrocketed more than 50 percent above its IPO price on Thursday, as the entertainment technology company made its public debut.

The company, which makes most of its money from selling streaming video players, listed its $252 million IPO on the Nasdaq under the trading symbol ROKU.

The company priced its 18 million share offering at $14 per share on Thursday, the high end of the expected range of between $12 per share and $14 per share. Shares opened for trading at $15.78 a piece.

Roku had $398.6 million in revenue last year, up 25 percent from $319.9 million in 2015. But the Los Gatos, Calif.-based company still loses money: It posted a net loss of $42.8 million in 2016, steeper than the $40.6 million the year before.

In addition to sales of Roku players and TVs, the company has been expanding its advertising business. It's hoping to grow the number of hours streamed by each user, and monetize the hours through advertising, according to its prospectus.

The IPO comes as more and more companies look to take a slice of the video-streaming market. Advertising giant Facebook has deepened its ambitions in video streaming, and Apple and Amazon debuted new high-definition streaming devices this month.

Founder and CEO Anthony Wood told CNBC ahead of the IPO the company isn't worried about its heavyweight competitors.

"Roku's position in this ecosystem is being the platform that ties together the customers, the advertisers, the user, and we've been competing with big companies for a long time very successfully," Wood said on CNBC's "Squawk Box."

Wood — a former Netflix executive who played a role in the invention of the DVR — will own 27.3 percent of Roku's stock, and will control approximately 32.1percent of the voting power, the prospectus said.

Other major backers include Menlo Ventures, Twenty-First Century Fox and Fidelity. The IPO's underwriters include Morgan Stanley, Citigroup, Allen & Company and RBC Capital Markets.

Source: https://goo.gl/8JJNtX

By Anita Balakrishnan