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Roku Posted Strong Start to 2021; Account Growth Slows Down Due to 2020 Demand Pull Forward

Neil Macker, CFA Senior Equity Analyst

Analyst Note

| Neil Macker, CFA |

Roku kicked off 2021 with a strong first quarter as revenue and operating income both handily beat FactSet consensus projections based on strong ad revenue growth. The firm only added 2.4 million accounts in the quarter, reaching 53.6 million, as the pandemic may have pulled forward some demand in 2020. However, streaming hours continued to expand to 18.3 billion, up another 1.4 billion hours sequentially and 6 billion versus the first quarter last year. We expect that the continued secular trend towards streaming will help drive growth in both streaming hours and revenue per user over the near term. We are maintaining our no-moat rating and our $170 fair value.

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Company Profile

Business Description

Roku is the leading streaming platform in the U.S. by hours watched with over 40 billion hours of content streamed in 2019. The firm's eponymous operating system is used not only in Roku's own hardware but in co-branded TVs and soundbars from manufacturers like TCL, Onn, and Hisense. Roku generates revenue from advertising, distribution fees, hardware sales, OS licensing, and subscription sales.

Contact
1155 Coleman Avenue
San Jose, CA, 95110
T +1 408 556-9040
Sector Communication Services
Industry Entertainment
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type Speculative Growth
Employees 1,925

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