Roku delivers mixed results that could indicate troubles in the streaming waters

By Matt Collins Article may include affiliate links

In another sign that the streaming business may be getting clogged, Roku announced mixed results April 28, 2022, which sent its already beleaguered stock falling.

The good news is that Roku saw a 28% jump in revenue, reaching $734 million in the first quarter of 2022, which beat what Wall Street was expecting.

However, its losses per share came in at 19 cents per share. Analysts were expecting 18 cents per share, so the company ended up missing that projection by a single cent.

What’s more significant is that the company delivered a profit of 54 cents a share only one year ago, so the losses, while expected, are still significant.

Roku suggested that coronavirus stimulus payments in early 2021 may have been helpful in driving purchases of devices and signups, and also blamed supply chain issues for a downturn in device sales that remained up over 2019 levels but down 12% year over year.

The company attempted to put a positive spin on its average revenue per user figure growth, which increased 34% in the trailing 12 months. It also noted account growth of 1.1 million in the quarter, but that is significantly less than the growth seen previously.

Roku is also facing investors wary of the increasingly crowded streaming market and supply chain issues as well as the April 27, 2022, announcement that Comcast would license its Flex platform, a Roku competitor, to Charter.

Roku execs say they are moving forward with a plan to invest much of its gross profits back into further development on its platform. Roku remains the leader in its category, with Amazon Fire TV coming in second.

Streaming ventures have been hit hard in recent weeks. Netflix announced its first subscriber loss in years and plans to crackdown on password sharing to boost revenue. Many streamers are slowing investments in original content development and CNN+ shut down after less than a month of operation — a failure estimated to have cost it around $300 million.