3 minBusiness
Roku revenue jumps 24% in third quarter as ad spending surges
Streaming platform Roku beat Wall Street expectations in the third quarter, with revenue rising 24% to $1.50 billion, as advertising demand from media and entertainment companies grew at its fastest pace in four years.
Roku beat Wall Street earnings expectations in the third quarter, posting 24% revenue growth to $1.50 billion as advertisers increased spending on its streaming platform. The results come as the company prepares for its takeover by Fox Corp. next year.
Total gross profit reached $649 million, also up 24%, and Roku generated net income of $183 million for the quarter. The strongest contributor to the quarter was spending from media and entertainment advertisers, whose budgets on the platform grew at their biggest pace in four years. Roku's performance was described in the source coverage as another stellar quarter, following a run of solid results for the company.
The figures point to sustained momentum in the connected-TV advertising market, where streaming services compete with traditional broadcasters for marketing budgets. Roku earns much of its revenue from selling advertising on its devices and platform, and it has benefited as brands move more of their spending toward streaming audiences. Growth of this size in gross profit alongside revenue suggests that the increase in sales was not confined to a narrow part of the business, though the source material does not break down the figures by segment.
The Fox acquisition adds a further dimension to the quarter. With the takeover expected to be completed next year, Roku's financial performance during this period carries weight both for the deal and for the wider streaming and advertising market in which the two companies operate. Investors and industry observers will be watching whether the momentum seen in the third quarter holds as the transaction approaches.
Roku's results also reflect the broader shift of entertainment marketing from linear television to streaming. Media and entertainment companies promoting new shows, films and streaming services have been among the heaviest buyers of connected-TV inventory, and their increased spending on the platform underscores how central these advertisers have become to the company's revenue base. The quarter's strong showing gives Roku a stronger position as it heads into the next phase of its corporate life under Fox ownership.
Source: variety.com
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