Roku is gunning for a new record high after crushing earnings

Roku CEO Anthony
Wood
Marcio Jose
Sanchez/AP

• Roku
  topped Wall Street’s earnings expectations on Wednesday,
  posting a financially neutral quarter where analysts had
  anticipated a 14 cent loss per share. 
• The streaming company’s ad business helped fuel the
  beat — an area Netflix and Amazon ignore. 
• Shares surged more than 10% in after-hours trading
  following the release.
• 
  
  Follow Roku’s stock price here. 
  

Shares of Roku
were up more than 10% in early trading Thursday, indicating an
opening price of $52.15, after the company reported
second-quarter earnings on Wednesday that
blew Wall Street’s expectations out of the water.

Here are the important numbers:

• Revenue: $156.8 million. Analysts were
  expecting $141.5 million.
• EPS: 0 cents a share. Wall Street was
  looking for a loss of 14.6 cents a share.
• Revenue forecast (Q3): $164 million to
  $172 million. Analysts had previously predicted it would post
  $166.5 million in sales in the third quarter.
• Net loss (Q3 forecast, non-GAAP): $3
  million to $8 million. Wall Street’s prior estimate was an
  adjusted net loss of 11.6 million for the period.
• Subscribers: 22 million. That’s up from 20.8
  million in the first quarter and 15.1 million in the same
  quarter of 2017.

If the stock continues to climb in trading Thursday, it could
easily top its record high of $52.70, set back in February.

The earnings report also solidifies Roku’s clear delineation from
its streaming competitors like Netflix and Amazon: advertising.
The two elephants in the room don’t advertise, and instead, the
giants rely on subscriber numbers to fuel nearly all of their
revenue. 

“It’s a mainstream ad business,” CEO Anthony Wood told analysts
on a conference call. More than half of the top 200 advertisers
listed by Ad Age now advertise via Roku, he said.

That bump in advertising helped Roku’s revenue climb to $16.60
per user on a 12-month trailing basis, up from $11.22 a year ago.

“The shift to streaming is really happening,”
Wood said. “It’s a big opportunity for us.”

Wall Street analysts have ratcheted up their estimates for Roku
following the earnings report, and now have an average price
target of $53, according to Bloomberg, up from $45 before the
report. Shares were flat since the beginning of the year before
Thursday’s pre-market surge.

Troy Wolverton contributed to this report. 

Now read:

Markets
Insider