Roku stock rallies 8% after raising Q3 revenue forecast on new job cuts

September 6, 2023 6:36 AM EDT
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(Updated - September 6, 2023 6:39 AM EDT)

Roku (NASDAQ: ROKU) is planning to reduce its workforce by approximately 10% as part of its ongoing efforts to control its annual operating expense growth rate.

This restructuring is expected to result in a charge ranging from $45 million to $65 million, the company said in a filing.

Roku shares rose 8% in early Wednesday trade.

The majority of these charges will be incurred in the third quarter of the year, and the workforce reduction is anticipated to be substantially completed by the end of the fourth quarter, Roku added.

Roku had previously announced a broader restructuring plan in March, which involved cutting about 6% of its workforce.

The company now expects its third-quarter net revenue, excluding restructuring, to be in the range of $835 million to $875 million, compared to a previous outlook of approximately $815 million.

Additionally, the company anticipates its adjusted EBITDA for the third quarter, excluding restructuring effects, to range from -$40 million to -$20 million.

Roku also sees an impairment charge of $160 million to $200 million related to the ceasing use of certain office facilities.

Truist analyst Matthew Thornton commented:

"We view 3Q results as satisfactory and view the additional cost actions as positive," the analyst said briefly after Roku announced the news.

By Senad Karaahmetovic

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