Roku (NASDAQ:ROKU) shares traded over 10% higher in pre-open Friday after the video streaming company reported better-than-expected second-quarter results.
The company reported a loss per share of $0.76 on revenue of $847.2 million, better than the consensus for a loss per share of $ 1.27 on revenue of $773M. Revenue rose 11% year-over-year.
“We delivered solid results in Q2, growing scale, engagement, and monetization. The operating environment remains largely unchanged from Q1, with strong consumer demand for Roku TV models while TV advertising remains muted industry-wide,” the company said in a shareholder letter.
“We have begun to see some ad verticals improve, which resulted in modest YoY PlaLorm revenue growth in Q2, and we are well positioned to reaccelerate growth as the ad market recovers. We continue to moderate the YoY growth rate of operating expenses and remain committed to our plan to deliver positive Adjusted EBITDA for the full year 2024.”
On the outlook front, the company guided to Q3 revenue of $815M, better than the expected $810M. The company expects to report a negative adjusted EBITDA of $50M.
“Overall, trends that we observed in Q1 played out in Q2, and we expect them to continue throughout the year. While consumer spend is showing some modest growth, macro concerns and uncertainty remain,” the company further noted.
Oppenheimer analysts bumped the price target to $90 per share "on improving Platform revenue trends, even with M&E/strike headwinds. Platform revenue 11% above Opco/Street, with Platform gross profit 13% above, as M&E improved q/q along with strength in CPG, health and wellness."
JPMorgan analysts said the beat was driven by stability in the ad market.
"We think the 3Q outlook could prove conservative, and it appears investors agree with us as ROKU shares are trading up," they said.