Roku Inc. said it expected revenue to increase 42% in 2020 after posting 52% growth last year, fueled in part by an explosion of new streaming services and the transition of customers from traditional pay TV to streaming video.
The Los Gatos, Calif. -based maker of streaming-media devices expects to generate $1.6 billion in revenue this year, up from $1.13 billion last year, the company said Thursday.
"2019 was a tremendous year, both for the streaming industry and for Roku," Chief Executive Anthony Wood said on a call with analysts. The company is poised to benefit from the recent launch of several prominent streaming services, including Walt Disney Co.'s Disney+ and Apple Inc.'s Apple TV+, which will be followed by Comcast Corp.'s Peacock and AT&T Inc.'s HBO Max later this year.
Roku is the market leader among connected-TV devices in the U.S., according to Strategy Analytics. Mr. Wood said just under one in three smart TVs sold in the U.S. last year were Roku TVs. Roku reported 36.9 million active accounts at the end of the fourth quarter, a 36% increase from the prior year.
For the fourth quarter, the company swung to a loss of $15.7 million, or 13 cents a share, from a profit of $6.8 million, or 5 cents a share, a year earlier, because of a rise in marketing and research expenses. Revenue rose 49% to $ 411.2 million. Analysts polled by FactSet were looking for a loss of 13 cents a share on revenue of $392 million .
Shares were up 6% in after-hours trading.
Average revenue per user hit $23.14 for the quarter, in a 29% increase from a year earlier.
"I think it was a good quarter," said Vasily Karasyov, a research analyst at Cannonball Research . "Bears are disappointed. People were waiting for the blood in the water. I don't think they gave it to them."
The company's platform business, which includes licensing fees for its smart-TV operating system as well as its advertising, metrics and subscription businesses, was the company's fastest-growing unit. It shot up 78% for the year, hitting $740.8 million.
Advertising makes up the largest component of Roku's platform business. Roku said its monetized video ad impressions more than doubled in 2019 and predicted the figure would double again in 2020. Roku enlarged its bet on the ad business for growth when it bought the ad-buying platform Dataxu Inc. for about $150 million in October.
Roku said time spent by consumers watching programs on its platform grew by 60% in the quarter from a year earlier. Roku said it sold ads at a faster rate during the period, but didn't provide specifics.
Roku's 2020 outlook didn't include material impacts tied to the novel coronavirus outbreak in China, where the company does manufacturing. "There is potential for more significant manufacturing and supply-chain disruptions if the outbreak becomes more severe, which may hamper our and our partners' abilities to replenish inventory after a strong holiday season," Chief Financial Officer Steve Louden said on the call.
