Roku’s Grab for Ad Money Pays Off with 57 Percent Growth in Q2 | Video Ad News
Over-the-top (OTT) platform Roku recorded 57 percent year-on-year growth to $157 million in its Q2 financial results as the company’s ramped up targeting of ad revenue appears to be paying off. Investors responded positively to the news, with Roku’s share price jumping over eight percent after the results were released.
Roku has over the past few years been diversifying its revenue streams, moving away from reliance on hardware sales. Income from the Roku platform, drawn from licensing fees and advertising revenue, exceeded income from Roku player sales for the first time in Q1 this year, and is now substantially higher. Platform revenue reached $90.3 million in Q2, a 96 percent year-on-year increase, compared to player revenue which hit $66.5 million.
“Robust active account growth expanded the reach and scale of our TV streaming platform, while at the same time Roku captured a bigger share of TV advertising budgets and continued progress on monetisation,” the company said in a statement.
Roku’s play for ad dollars has helped move the company closer to profitability, reporting losses of $100,000 for Q2, down from $13.4 million in Q2 last year. Some investors have been very sceptical of the company since its IPO last year, given that Roku doesn’t turn an annual profit, but ad revenue seems to be steering the company in a positive direction.
Roku runs both display ads and video ads on its platform, but counts video advertising as its primary source of ad revenue. Video ad revenue was listed as the largest driver of platform revenue growth, with a 48 percent year-on-year growth in average revenue per user (ARPU) also attributed to video advertising.