Roku Inc (NASDAQ:ROKU) stock plunges 25.12% (As on Feb 18, 11:50:55 AM UTC-4, Source: Google Finance) after the company reported quarterly revenue that missed estimates, as the company was hit by supply chain issues that affected sales of television sets and its own streaming devices, sending shares down nearly 20per cent in after-market trading. The company also issued first-quarter revenue guidance below consensus. The company, which got a boost during the pandemic with people stuck at home, has lately seen demand for streaming services ease with curbs put in place to prevent the spread of COVID-19 being rolled back. The company said acquiring customers will remain a priority and it will not pass on higher costs to customers. Roku’s gross margins fell about 3per cent in the reported quarter. Delayed advertising spend in verticals affected by supply chain issues will continue into 2022, affecting how it monetizes content. Sales of televisions are likely to remain below pre-pandemic levels affecting the rate at which it acquires active customers.
Meanwhile, in Q4, there was a mix of strength and softness among different advertising verticals. Verticals like restaurants and travel had strong growth, while auto and CPG (consumer packaged goods) experienced supply chain disruptions that had a negative impact on their product availability and therefore led to Q4 softness in advertising spend. In the long-term, the advertising upside in the shift to TV streaming remains strong across categories.
Further, in 2021, ROKU grew Platform revenue 80% yearover-year to $2.3 billion. ARPU grew from $28.76 to $41.03 (trailing 12-month basis), an increase of 43% year-over-year.
ROKU in the fourth quarter of FY 21 has reported the adjusted earnings per share of 17 cents, beating the analysts’ estimates for the adjusted earnings per share of 9 cents, according to Refinitiv Ibes Data (analyst estimates). The company had reported the adjusted revenue growth of 35.9 percent to $865.3 million in the fourth quarter of FY 21, missing the analysts’ estimates for revenue of $894.1 million.
Roku expects current-quarter revenue to be of $720 million, compared with analysts’ estimates of $748.5 million, according to IBES data from Refinitiv. For Q1, the company anticipates Total Gross Profit to be of Roughly $360 Million and Adjusted EBITDA to be of $55 Million. As the business mix normalizes toward video advertising, the company expects platform gross margin to be of around 60%.
On the other hand, In the U.S., the company had launched new versions of the Roku Express 4K+ and the Roku Streaming Stick 4K, delivering powerful 4K streaming at an incredible value. Roku also introduced the Roku Voice Remote Pro, which features a rechargeable battery, lost remote finder, and hands-free voice controls. The Roku Streaming Stick 4K+ was named “Best Overall” streaming device by WIRED, and the Roku Voice Remote Pro was recently lauded by The Wall Street Journal as the go-to remote for consumers.