Roku users streamed more than 10 billion hours of entertainment in the September quarter, helping the company to once again rake in big bucks with digital advertising. However, investors were apparently taken aback by Roku’s accelerating losses as well as slight decline in hardware revenues, sending the stock down as much as 15% in after-hours trading.
Roku generated $260.9 million in revenue during the quarter ending September 30, compared to $173.4 million during the same quarter a year ago. Net losses for the quarter came in at $26.5 million, compared to $7.9 million for Q3 of 2018. This translates to a loss of $0.22 per share.
Analysts had expected losses of $0.28 per share on revenue of $257 million.
The company now predicts to generate between $1.098 billion and $1.113 billion in revenues in 2019, and book net losses anywhere between $66 and $61 million for this year. Both are better predictions than what Roku had forecast a quarter ago.
Roku may still be best known for its hardware business, but most of that revenue was driven by ads running against those billions of hours of streaming content: In Q3, Roku generated 69% of its overall revenue, or $179.3 million, with advertising and services, while hardware sales were responsible for just $81.6 million.
Developing.