(Reuters) -Roku Inc said on Wednesday that it was keeping a lid on costs and forecast first-quarter revenue above Wall Street estimates, as the company bet on its streaming devices and content platform to drive growth.
Shares of the San Jose, California-based company rose nearly 12% in trading after the bell. The stock, which closed up 12%, had lost nearly a third of its value in the past year but is up 56% so far this year.
Roku, which has benefited from people ditching their traditional cable packages and flocking to subscription-based streaming services, has pushed to put out more original content on its own streaming channel to gain subscribers and advertisers.
San Jose, Calif.-based Roku is the nation’s largest maker of streaming hardware, but derives most of its revenue from advertising. It sells all ads viewed on its own streaming service the Roku Channel and sells some ads that appear on other streaming services viewed on Roku devices.
Roku said the advertising market was muted in the fourth quarter but noted that ad spending among companies in the restaurant, travel, packaged goods and wellness sectors appeared to be improving so far in the first quarter. Other industries, including financial services and media and entertainment, remained under pressure, Roku said, which it expected would affect its margins.
The company also said its operating expenses, which grew by 68% last year, would grow at a gradually slower pace over the course of 2023. The company laid off about 200 employees in the fourth quarter.
