-Roku produced good results with a beat but the guidance looked to be a bit weak as those tough Covid comps come into play for the 2nd half of the year. The main thing to complain about was weak subscriber growth (ala Netflix). Stock is down 8% after hours
-Active accounts grew just 28% to 55.1 million, against expectations that the company would have at least 55.8M accounts. Streaming hours rose 19%, to 17.4 billion.
• Total net revenue grew 81% year-over-year (YoY) to $645 million
• Platform revenue increased 117% YoY to $532 million
• Gross profit was up 130% YoY to $338 million
• Active Accounts reached 55.1 million, an increase of 1.5 million active accounts from Q1 2021
• Streaming hours were 17.4 billion hours, a decrease of 1.0 billion hours from Q1 2021
• Average Revenue Per User (ARPU) grew to $36.46 (trailing 12-month basis), up 46% YoY
Q2 2021 net adds were higher than pre-covid levels in Q2 2019, but as expected, lower than the pandemic-related surge of Q2 2020. Player unit sales in Q2 2021 were relatively flat year-over year, following the demand spike in Q2 2020.
In Q2, Platform revenue exceeded half a billion dollars for the first time in the Platform segment’s history. Revenue of $532 million, up 117% year-over-year, was driven by significant contributions from both content distribution and advertising activities. ARPU was $36.46 (trailing 12-month basis), up 46% year-over-year.
Ad Business Strength
In Q2, advertisers continued to follow audiences and move budgets into TV streaming. Roku’s monetized video ad impressions more than doubled year-over-year. Our competitive advantages in first-party customer relationships, data, ad innovation, and ad technology helped drive this growth. We’re pleased with our progress increasing the number of small/medium sized businesses on our platform, as the number of advertisers outside the Ad Age 200 grew over 50% year-over-year.
Operating income swung to a gain of $69.1M (from a year-ago loss of $42.2M), and EBITDA did as well (to $122.4M from a year-ago loss of $3.4M).
Our Q3 outlook is for robust growth with total net revenue of $680 million at the midpoint (up 51% year-over year) and total gross profit of $320 million at the midpoint (up 49% year-over-year). We anticipate quarterly sequential increases in operating expenses in the second half of 2021 from our investments in headcount, product development, and sales & marketing. As a result, we expect adjusted EBITDA to be $65 million at the midpoint in Q3.
Within the Platform segment, monetization remains strong, and while there will be a slowdown in year-over-year growth relative to last year’s pandemic-driven acceleration, we expect continued significant growth in the second half of the year.
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