Roku Shares Plunge 26% on Q2 Miss and Disappointing Guidance

Roku (NASDAQ: ROKU) shares dropped more than 26% after-hours following the company’s reported disappointing Q2 results, with EPS of ($0.82) coming in worse than the consensus estimate of ($0.68).

Revenue grew 18% year-over-year to $764.4 million, missing the consensus estimate of $804.13 million. Platform revenue increased 26% year-over-year to $673 million. The lower-than-expected growth was due to marketers abruptly curtailing or pausing advertising spend in the ad scatter market during the latter half of the quarter.

The company added 1.8 million incremental active accounts to reach 63.1 million. Average Revenue Per User (ARPU) grew 21% year-over-year to $44.10 (trailing 12-month basis).

The company expects advertising spend, particularly in the scatter market, to continue to be negatively impacted in H2/22. Furthermore, consumer discretionary spend is expected to continue to moderate, pressuring both Roku TV and Roku player sales.

The company expects Q3/22 revenue of $700 million, worse than the consensus estimate of $901.7 million. Given the uncertainties and volatility in the macro environment, the company withdrew its full-year revenue growth rate estimate.

By Davit Kirakosyan

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