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Stock Alert: Roku Down 6%; Expects Ad Revenue Growth To Slowdown Amid Covid-19

Shares of Roku Inc. (ROKU) are currently slipping over more 6% on Friday morning after the video streaming platform shared a downbeat outlook for ad revenues going forward.

ROKU is currently trading at $130.16, up $7.34 or 5.34%, on the Nasdaq.

For the first quarter, Roku recorded $232.56 million in platform revenue, which includes advertising and licensing fees for its software, and $88.21 million in its player segment.

Roku said its advertising business has seen higher than normal cancellations, but it was offset by other advertising that moved to its platforms from traditional TV.

The company said it anticipates ad business to deliver substantial revenue growth on a year-over-year basis, however at a slower pace and lower gross profit than it originally expected for the year.

"In summary, while our advertising business faces near-term challenges, our content distribution business, as well as overall consumer engagement, have benefited from a surge in OTT usage," the company said in its letter to shareholders. "There can be no assurance that these patterns will continue through the remainder of the second quarter or throughout 2020; however, we believe that they may represent an acceleration of the longer-term trends reshaping the industry that were already well established prior to COVID-19."

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