Roku Inc. (NASDAQ: ROKU) shares jumped on Tuesday after the company provided an update on its first quarter. Streaming has been one of the emerging coronavirus trends in the past weeks, and Roku is right at the heart of that. Although Roku stock has fallen off significantly since the onset of the COVID-19 pandemic, there seems to be a light at the end of the tunnel.
According to the update, Roku estimates 39.8 million active accounts as of the end of March, a net increase of nearly 3 million since December. Roku also expects first-quarter streaming hours will be 13.2 billion, a 49% year over year increase.
Looking at the first quarter, Roku expects to see total revenue in the range of $307 million to $317 million, with a net loss of $60 million to $55 million. Analysts are calling for a net loss of $0.43 per share and $300.44 million in revenue for the quarter.
Early in the first quarter, Roku completed the rollout of its “Are you still watching” feature, which exits video playback after long periods of user inactivity. As previously noted, the rollout of this feature will moderate streaming hour growth. However, late in the first quarter, Roku started to see the effects of large numbers of people “sheltering at home.” For Roku, this has resulted in an acceleration in new account growth and an increase in viewing.
Anthony Wood, Roku’s CEO, commented:
Consumers are turning to Roku now more than ever. As the leading TV streaming platform in the U.S., Roku is proud to provide easy access to live news, free movies and TV, great paid content, and helpful programming for individuals and families who are sheltering at home. We have been working closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix which has been affected by social distancing. While we expect some marketers to pause or reduce ad investments in the near term, we believe that the targeted and measurable TV ads and unique sponsorship capabilities that Roku offers are highly beneficial to brands today.
Roku stock traded up about 9% on Tuesday, at $105.64 in a 52-week range of $55.02 to $176.55. The consensus analyst target is $140.31.
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