Roku Could Say Revenue Fell for the First Time Ever in Q1
Roku Inc. (ROKU), among the nine most-downloaded entertainment apps in the U.S., will likely report its first-ever year-over-year revenue decline in the first quarter as a tepid advertising market outweighs the growing popularity of its Roku Channel.
The streaming platform provider will probably report net losses attributable to shareholders of $204.8 million, or $1.45 per share, compared with losses of $26.3 million, $0.19 a share, in the prior-year quarter, according to estimates compiled by Visible Alpha. Revenue could fall by 3.3% to $709.5 million, the first such decline in company history.Roku announces results after markets close Wednesday.
Roku's advertising business, its largest source of revenue, faces macroeconomic headwinds including inflation and rising interest rates that shrunk ad budgets in recent quarters. The company said in February it was seeing some improvement in certain segments, including restaurants, travel, and wellness.
Citing the difficult economic environment, Roku promised investors last year that it would cut costs, and investors will be looking at first-quarter expenses to see evidence of that plan.
The company laid off 200 employees in November of last year and 200 more this March, for which it expects to incur between $30 and $35 million in one-time charges in the first quarter.Savings won't be fully realized until later in the year.
Total operating expenses for the first quarter are expected to come in at $537 million, 38% higher than the year-ago quarter. That would be the slowest rate of increase in two years. Analysts expect operating expenses to increase by just 1% by the end of the year.
Meanwhile, Roku is expanding its product line-up and in-house programming. During the first
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