Roku reports impressive Q3 results, growing revenues and user numbers

  • Roku saw a surge in not only watch time, but also ad sales and device sales in Q3.
  • And the streaming company expects further growth going into the holidays.
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Roku continued its good year with a strong Q3, per its latest earnings release. The company, which saw a surge in not only watch time, but also ad sales and device sales, reported a 73% year-over-year (YoY) increase in revenues for the quarter. Roku said in the release that it expects further growth going into the holidays, albeit tempered by pandemic-related contractions in consumer spending.

Here are the top-line numbers:

  • Revenues: Roku pulled in total net revenues of $451.7 million, up 73% from $260.9 million in Q3 2019. About 70% of Q3 net revenues was platform revenue—predominantly ad revenue, though also subscription, licensing, and other non-ad-related revenues—which surged by 78% YoY to $319.2 million. 
  • Accounts and viewers: The company added 2.9 million active accounts during Q3 to reach 46.0 million, up 43% from the 32.3 million active accounts in Q3 2019. Additionally, an estimated 54 million people in US households watched The Roku Channel during the quarter, revealing a significant chunk of additional viewers on shared accounts. 
  • Hours watched: Roku reported a whopping 14.8 billion hours watched in the three-month period, up 54% from 9.6 billion in Q3 2019, further evidence of the boost that streaming is seeing amid the new socially distanced reality.

The streaming company cited several factors for its Q3 success, highlighting the draw it holds given continued cord-cutting and this year's unprecedented disruption in linear TV. Not only has cord-cutting continued during the pandemic—we estimate that by the end of 2020, 31.2 million US households will have canceled their traditional pay TV service, up 27.0% YoY—but upfront commitments plummeted, freeing up ad dollars for reallocation.

Advertisers who were already shifting toward streaming leaned in more, and new blood flocked to the format: Roku reported that 97% of TV advertisers who spent $1 million or more in Q3 2019 renewed that investment in Q3 2020, and that the number of first-time advertisers more than doubled YoY.

And it's not just Roku that's seeing such success: The Trade Desk reported in its Q3 earnings that programmatic CTV ad spend on its platform grew by 100% YoY (more on this below). As the year finishes out and the pandemic endures, we'll likely continue to see advertisers converting spend to streaming options.

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