Roku Inc. has announced its latest financial results, showing strong growth in fiscal 2018.
In fiscal 2018, Roku net revenue reached US$742.5 million, a year-on-year increase of 45%. Gross profit was up by 66%, to US$332.1 million. Average revenue per user (ARPU) increased by US$4.17, to US$17.95. Monetized video-ad impressions more than doubled over the previous year.
Roku notes that it added 7.8 million active accounts during fiscal 2018, reaching a total of 27.1 million by the end of that period. The 4th quarter alone saw the addition of 3.3 million incremental active accounts. Sales of Roku-based players were up 30% year-on-year, although strong growth in the sub-US$50 category helped produce an 8% decrease in ASPs.
The company estimates that nearly 1 in 5 US TV households now use the Roku platform to stream at least a portion of their TV viewing. And more than 1 in 4 smart TVs sold in the US were Roku TVs. Total streaming hours increased by 9.2 billion, to a total of 24.0 billion.
Over the past three years, says Roku, its active accounts increased by about 4 million, 6 million and 8 million. During that same period, platform revenue quadrupled, from just over US$100 million in 2016 to over US$400 million in 2018. Roku notes that in the US, its active account base makes it roughly equivalent in saize to the number-two traditional pay TV/cable company.
Just the Beginning
Roku believes that it is "only beginning to capitalize on the large opportunity streaming presents."
Since its launch in late 2017, the Roku Channel has expanded from allowing free, ad-supported access to 1,000 movies and TV episodes, to roughly 10,000 today - plus free live channels such as ABC News and TMZ, and paid access to Premium Subscriptions to Showtime, Epix, Starz and other services. Roku expects the Roku Channel to become a "significant destination" for its users, and a growing source of advertising revenue.
Roku notes that it took a few years for advertisers to take full advantage of the exploding audience on mobile platforms. It believes that rapid growth in its own ad revenues indicates that advertisers are beginning to respond similarly to streaming media.
Roku expects that TV will follow the path seen with mobile phones, transitioning from numerous proprietary software stacks to licensed OSes. And it quickly points out that it has "the world's only purpose-built-for-TV licensed OS."
International revenues are expected to be an increasingly important part of the Roku business. However, the company notes that growing the user base will come first, followed only then by full monetization. Roku is "building the foundation" for its global presence, including key hires and projects.
Roku cautions that its upcoming Q1 is seasonally its "softest" quarter from a revenue perspective. So it is predicting a 32% decrease in revenues quarter-over-quarter. However, Roku expects to achieve 36% growth over the course of 2019, bringing its revenues for the first time to US$1 billion.