Roku is not worried about Amazon or anyone else looking at cash cows.
The electronics maker has transformed in recent years into an advertising business, thanks to a small part of the Roku Channel, an advertising-supported free streaming video service available on Roku devices and over the web. Last month, Amazon launched a rival service called Freedive from the IMDb, which threatens to steal viewers and advertising dollars from Rokus's offer.
But that's not how Steve Louden, Roku's Chief Financial Officer, sees it. Amazon's listing – along with similar services from YouTube, Vudu and others – only works as "validation" for the Roku Channel and the ad-supported streaming business in general.
"We are strong supporters of ad-supported content," Louden told Business Insider in an interview Thursday, just after the company reported the fourth quarter. Read this: Amazon has eyes set on yet another market ̵
Roku topped analyst expectations as an income from the platform business – which includes his advertising sales – the jump 77% from the holiday season 2017.
Roku is in a "strong position"
The streaming video company is in a better position than many of its rivals to capitalize on ad-supported video market, Louden said. Its control over not only a streaming channel, but a streaming media platform – through its Roku streaming boxes and smart TVs running the operating system – provides important data on users' viewing habits that competitors do not have, he said. Through the platform, Roku also has the ability to control viewers to the Roku Channel and other places that run their video ads.
"It puts us in a strong position," he said.
Amazon also has its own platform in the form of Amazon Fire TVs, and it has plenty of display habits data through it, the Amazon Fire tablets and its Prime Video service. But Louden didn't seem worried, suggesting that Amazon and many of Rokus's other competitors can't fully match it. Roku can offer advertisers both the data they need to target their ads and a great viewer for them.
"That's where many people have holes," he said.
Here's what Roku reported and how it compared to Wall Street expectations:
- Quarterly revenue (Q4): $ 275.7 million. Analysts had expected $ 262.4 million.
- Q4 earnings per share (EPS) : 5 cents. Wall Street waited 3 cents per share.
- First Quarter Income (Q1) (Company Guide): $ 185 million to $ 190 million. Analysts had estimated $ 188.8 million.
- Q1 EPS (Guidance): Roku forecasts that it will lose $ 28 million to $ 32 million, resulting in a loss per share of 23 to 26 cents, assuming that the stock remains stable. Wall Street forecast a loss of 12 cents per share.
- 2019 Full-Year Revenue (Guidance): $ 1 billion to $ 1,025 billion. Analysts had forecasts for $ 985.4 million.
- 2019 EPS (Guidance): The company estimated a loss of between $ 80 million and $ 90 million, which is about 65 cents to 73 cents per share, assuming the shareholding remains the same. Analysts had predicted a full-year loss of 23 cents per share.
Roku's share jumped $ 2.72, or 5%, to $ 54.20 in retrospect. The company's stock closed regular trading at $ 2.16, or 4% to $ 51.48.