Roku Inc. (NASDAQ: ROKU) highlighted increases in subscriptions and growth in the number of streaming hours when it reported first-quarter earnings last week. Now the video streaming service is making moves to bolster those numbers with additions to its Spanish-language offerings.

The company announced on its blog Monday that it is adding six new live/linear Spanish-language channels. The entertainment options on those channels will include music, movies, family entertainment and telenovelas. The new channels will be provided to subscribers at no additional cost.

The new channels are:

• AFV Family Español, which provides home video America’s Funniest Home Videos and other comedy programming.
• América TeVé, which offers news and entertainment shows.
• Latido Music, which plays all genres of Latin music from the United States, Latin America and Spain.
• Love Nature en Español, which shares stories of nature from around the world.
• Moovimex, which shows Mexican action, narco and comedy movies.
• Pongalo NovelaClub, which provides telenovelas from throughout Latin America.

Roku’s blog added that it will make it easier for subscribers to find the platform’s Spanish-language content with a new Roku Zone. And the voice search function will respond to Spanish in addition to English.

Roku will also offer local news and weather in Spanish through Telemundo’s affiliate network. And the Pantaya network will be a premium option for movies in Spanish from Latin America and the United States.

Seeing Benefits from the Lockdown

The streaming platform was already seeing large increases in its audience because of the COVID-19 pandemic.

Active accounts increased 2.9 million sequentially to 39.8 million in the first quarter, while streaming hours increased by 1.5 billion to 13.2 billion, Roku reported last week. Average revenue per user came to $24.35 on a trailing 12-month basis, up 28% year over year.

“The pandemic is accelerating the shift to streaming by both viewers and the industry,” Anthony Wood, the company’s founder and chief executive, said in a call with Wall Street analysts last week. “People are spending more time at home and so TV viewing is increasing. Viewers are selecting streaming because of its excellent content and value. Increased unemployment and a likely recession are making value more important than ever. These factors have driven dramatic increases in our new account growth rate since the pandemic took hold.”

Share Price Lags After Earnings Report

Although Roku delivered what was widely considered to be a positive first-quarter earnings report last week, the stock price has lagged over the last week.

Roku shares were priced at $127.13 at the close of trading on Tuesday, down 3.8% from Monday’s closing price of $132.18. When the company announced its earnings report on May 7, the stock was at $137.50.

The company reported that advertising revenue was pressured because of the coronavirus pandemic.

“In the short term, the pandemic is slowing the growth of Roku’s video advertising business,” Wood said on the earnings call last week. “While advertisers are spending less, reduced budgets mean marketers are looking for ways to invest more effectively and this should accelerate the shift to streaming ad buys.”

For the first quarter, Roku reported a net loss of $0.45 per share and $321 million in revenue. The loss was in line with consensus estimates and the revenue figure exceeded the estimates by about $14 million.

Last year Roku had earnings of $0.09 per share and revenue of $206.66 million in the first quarter.

Average revenue per user came to $24.35 on a trailing 12-month basis, up 28% year over year.

Platform revenues increased 73% year over year to $232.6 million. Player revenues increased by about 22% to $88.2 million.

Withholding Guidance for Second Quarter

The company did not issue guidance for the second quarter, like many other companies, citing the uncertainty surrounding the coronavirus crisis. Consensus estimates call for a net loss of $0.43 per share and $313.32 million in revenue.

Steve Louden, Roku’s chief financial officer, noted last week that one innovation was decreasing the number of streaming hours.

“We completed the rollout of the Are You Still Watching feature in late January, which prompts users to confirm they’re still watching after a period of inactivity.” Louden said. “We estimate that the rollout of this feature adds roughly a 7 to 8 percentage point negative impact on the year-over-year streaming hour growth rate in Q1 and we expect a slightly higher percentage point impact on year-over-year growth in subsequent quarters in 2020, given the rollout of this feature is now complete.”

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