The news: Roku eked out better-than-expected results in Q1, showing resilience in hardware sales and viewership in an ad market that’s been unkind to the connected TV (CTV) company.
In other areas, Roku showed signs of weakness. Though active accounts grew 17% to 71.6 million, average revenue per user (ARPU) fell 5%. The company had a Q1 net loss of $193.6 million, widening from the year earlier, as operating expenses rose about 42%.
Thanks, cord-cutting: Roku’s strong hardware sales and growth in time spent are partially due to the record number of US consumers who are choosing to cut the cord.
Acquisition speculation: A series of mixed or poor quarters, the crowded CTV market, and recent layoffs have caused many to wonder if Roku will sell off part of its multifaceted business to competitors or other streaming giants, but for now it appears to be hanging tight.
Our take: Roku’s slow-but-steady results in a space with meteoric ad spending growth shows just how contentious the CTV market is, even for a company at the top. Without the potential for bundling that a service like Hulu has, Roku will have to do a lot to get cord-cutting consumers to jump aboard.
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