- Revenue up 55% to 321m, reaccelerate from 49% last quarter!
- Platform revenue up 73% to 233m, reaccelerate from 71% last quarter!
- Platform revenue is now 72.5% of total revenue
Great notes. I’ll mention a couple other things.
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I was a little dismayed that GM was so much lower on their platform revenue, but I’m sure this was due to lower bids per ad (and I think more subscriptions which carry a lower GM? don’t quote me on that part), which makes it all the more impressive that revenue not only beat guidance handily, but accelerated!
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Incredible trends they’re seeing in usage will help offset the lower margin. The acceleration of growth in new accounts and viewership continued in April. Active accounts grew roughly 38% versus last year, driven by a year-over-year (YoY) increase in new accounts of more than 70%. Streaming hours rose by roughly 80% year-over-year, driven by an increase in streaming hours per account of approximately 30% We knew they would benefit from everyone being home so much, but that quantification is nice to see. They also mentioned that the shift FROM traditional TV kicked into high gear: Nielsen data shows that primetime linear viewing among adults 18-34 from March 16 to April 19 was down 18% year-over-year, and nearly half of TV viewing by this important demographic was streamed.
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They laid out very plainly that they expect great growth this year, though maybe not 70%+ growth like they’ve been seeing. Despite the likelihood that total U.S. advertising expenditures will decline in 2020, we believe Roku is relatively well positioned based on the effectiveness of our ad products and the trend towards streaming. As a result, we anticipate that our ad business will deliver substantial revenue growth on a year-over-year basis, albeit at a slower pace and lower gross profit than we originally expected for the year.
I realize this is a little different than most of our companies, and maybe a little harder to value. But for me, the trend toward streaming overwhelms everything. I added a little Roku at $124 yesterday AH, and it remains a large position.
Bear