Roku reported a total of 56.4 million active users during its third quarter, a slight increase from the previous quarter, as revenue met expectations at $680 million.
Total gross profit for Q3 hit $364 million, topping last quarter’s projections of $320 million. During Q3, streaming hours amounted to 18 billion hours as Roku made up for some of its Q2 losses, when the company reported 17.4 billion streaming hours, a roughly 1 billion-hour decline from Q1’s 18.3 billion hours. At the time, Roku attributed the decline to loosening COVID-19 restrictions and the reopening of activities for customers to participate in outside their homes, but the company’s stock still fell in after-hours trading.
In a letter to shareholders on Wednesday, Roku noted the “ongoing headwinds created by the global supply chain disruptions,” especially with the upcoming holiday season, but said the company was making “significant progress” with traditional TV advertisers, as well as digital-first advertisers. Next quarter, Roku projects revenue to hit $893 million with profit at $385 million.
Over the past year, Roku has focused on growing its original content following its acquisition of the Quibi library in January. Since then, Roku picked up multiple Emmy nods — including a win for J.B. Smoove in Mapleworth Murders —and acquired its first half-hour comedy, created by Schitt’s Creekco-executive producer Kurt Smeaton, for an exclusive streaming release in the U.S.
As for hardware, Roku released new 4K and 4K+ streaming sticks and a refreshed Roku Ultra in September as part of its fall product launches. That same month, Roku announced it would launch a Shopify app ahead of the holiday season to help small and medium-sized advertisers create, buy and measure the performance of streaming ad campaigns. The app has been in beta, but it’s not immediately clear when the full launch is slated to happen.
Roku has also been engaged in unsuccessful contract negotiations with YouTube, with YouTube parent company Google expected to pull the YouTube and YouTube TV apps from new Roku devices beginning on Dec. 9. During a call with reporters on Wednesday, Roku’s senior vp and gm platform business, Scott Rosenberg, said the disagreement was “not about money” and denied that Roku’s agreement with Amazon was being negotiated or up for renewal, despite a recent report in The Information.