Roku is predicting a billion-dollar year after it reported earnings that beat Wall Street expectations with ad inventory that more than doubled last quarter.
On Wednesday, the streaming-video company released first-quarter earnings with $206.7 million in revenue, up 51 percent year-over-year. Wall Street analysts had been predicting revenue closer to $190 million.
Platform revenue, which includes advertising sales, rose 79 percent year-over-year to $134.2 million. (The remainder of the revenue comes mostly from the sale of its connected TV devices.)
Shares in the company jumped more than 8 percent in after-hours trading.
“While traditional linear TV ads still make up the bulk of TV ad budgets, TV advertisers are beginning to commit more ad budgets to [over-the-top TV],” Roku executives wrote in a letter to shareholders on Wednesday, “and we expect this trend to gain even more momentum and eventually catch up with the shift in viewing behavior.”
The number of ad impressions running on Roku’s platform doubled last quarter from the year prior, and the company said it expects that to continue throughout the year. It issued a forecast for the rest of the year that predicted revenue would top $1 billion for the first time, with the ad-supported platform revenue accounting for about two-thirds of it.
Roku seems to be holding its own as an independent operator in the streaming video-on-demand space as it faces giants including Amazon, YouTube, Disney-owned Hulu and others. Roku takes a piece of the ad load from apps that stream on its devices, and it has its own channel.
Roku says it now generates about $19 on average for every user, which represented an increase of 27 percent from a year ago. It counts 29 million active accounts, up 40 percent from a year ago.
Meanwhile, the number of streaming hours hit 8.9 billion in the first quarter, up 74 percent year over year. Each account spends about 3.5 hours a day on average streaming video through Roku, the company says.
“Roku accesses [ad] inventory through content distribution agreements that provide Roku with a defined split of available inventory (or video ad impressions), through access to inventory at pre-negotiated [rates] or through aggregation points like The Roku Channel where we control 100 percent of the ad inventory,” the executives said in their letter.