LOS GATOS, Calif. — With large numbers of people sheltering at home due to the Covid-19 pandemic, Roku says it has seen a dramatic increase in streaming hours on its platform in the first quarter of 2020.
In a news release Monday, Roku says it expects the platform’s first-quarter streaming hours to total 13.2 billion, a 49% year-over-year increase. In addition, Roku estimates it has 39.8 million active accounts as of March 31, 2020, a net increase of almost 3 million since December 31, 2019.
Roku made the announcements as part of a Covid-19 update to its shareholders ahead of the release of its financial results for the first quarter of 2020, scheduled for May 7.
For the three months ended March 31, 2020, Roku says it expects revenue to be slightly higher and other financial metrics to be generally in-line with its prior outlook. The company’s estimated revenue for Q1 2020 is now between US$307 million and US$317 million, with total gross profit estimated to be between US$139 million to US$144 million. It is estimating a Q1 2020 net loss between US$55 million to US$60 million, says the news release.
At the same time, given the business and economic uncertainties arising from the Covid-19 pandemic, Roku is withdrawing its full-year 2020 financial outlook, the release says.
“While we believe that our offerings to consumers, content providers and advertisers will enable our company to deliver value in these uncertain times, the wider business and consumer impacts, as well as the duration of the pandemic, are unclear and thus we are withdrawing our prior 2020 outlook,” said Steve Louden, Roku’s chief financial officer, in the release.
Roku ended the first quarter with an estimated US$587 million in cash, cash equivalents, restricted cash and short-term investments. This includes a US$70 million draw-down from its revolving credit facility, says the release. “We decided it was prudent to draw down our credit facility in light of current financial market conditions,” said Louden.
“We have been working closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix which has been affected by social distancing. While we expect some marketers to pause or reduce ad investments in the near term, we believe that the targeted and measurable TV ads and unique sponsorship capabilities that Roku offers are highly beneficial to brands today.”
