Streaming video firm Roku ( ROKU ) saw its shares rocket in late trading Wednesday after the company reported much better-than-expected results for the third quarter, its first as a publicly traded company.
Roku reported an adjusted loss of 10 cents a share in the third quarter, compared with a loss of 17 cents a share in the year-earlier period. Revenue rose 40% to $124.8 million. Analysts expected a loss of 28 cents a share on sales of $110.5 million in the September quarter.
For the December quarter, Roku expects revenue of $182.5 million, based on the midpoint of its guidance. It did not give a target for earnings per share. Wall Street was modeling a loss of 13 cents a share and sales of $177 million.
Roku shares soared 26%, near 23.80, in after-hours trading on the stock market today . During the regular session, Roku fell 1.5% to 18.84.
Roku went public on Sept. 28 at $14 a share. It notched a record high of 29.80 on its second day of trading. Since then, it has fallen in 20 out of the last 28 trading sessions.
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Roku makes hardware and software for accessing internet video services like Netflix ( NFLX ), Hulu and Amazon.com ‘s ( AMZN ) Amazon Prime Video. It sells set-top boxes and dongles and provides software for smart TVs. It also gets revenue from selling advertising on its home screen and takes a share of pay-per-view movie sales and subscriptions sold through its platform.
In the streaming hardware market, Roku competes with Amazon, Apple ( AAPL ), Alphabet ( GOOGL )-owned Google and others.
The company describes itself as a “content distribution platform.” It had ended the quarter with 16.7 million active users, up 48% year over year.
Average revenue per user grew 37% year over year to $12.68.
“We now expect full-year revenue to reach or exceed $500 million in 2017, up from nearly $400 million last year,” Chief Executive Anthony Wood and Chief Financial Officer Steve Louden said in a letter to shareholders. “Our higher-margin platform segment is the key driver of our growth and gross margin expansion, and our advertising business has more than doubled in size year-to-date.”
Roku’s home screen provides access to advertiser-supported and subscription-based TV networks. In the U.S., it offers more than 5,000 streaming channels on its platform.
Roku also offers access to transactional video-on-demand content so users can watch pay-per-view movies, TV shows and other content.
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