Roku chief executive Anthony Wood calls his company's purchase of Quibi short-form video content "cost-effective," hinting in a quarterly earnings call Thursday that Roku would consider other reasonably priced acquisitions.
In January, Roku agreed to acquire multiyear exclusive rights to content from Quibi Holdings, a defunct subscription-supported streaming service for short-form programming, for less than $100 million.
Roku will integrate the 75 Quibi series it acquired into The Roku Channel, its app for ad-supported movies and TV shows, Mr. Wood says. "We'll continue to look more broadly at all the different types of content that we can acquire, and we'll be disciplined about making sure that content purchase price fits into--whether it's licensed or purchased or whatever the financial details are--fit into our AVOD [ad-supported video on demand] business model," Mr. Wood adds.
Woods' comments came as Roku swung to a profit in the December quarter and gave better-than-expected projections for the first quarter, driven by streaming momentum during the coronavirus pandemic. Here's what you need to know:
PROFIT: Roku swung to a profit of $67.3 million, from a loss of $15.7 million a year earlier. On an per-share basis, the profit was 49 cents a share. Analysts surveyed by FactSet expected a loss of 5 cents a share.
REVENUE: Net revenue for the quarter rose to $649.9 million from $411.2 million, compared with analysts' projected $619 million.
YEAR: Roku ended the year at a loss of $17.5 million and $1.78 billion in revenue, compared with a loss of $59.9 million an $1.13 billion in revenue a year earlier.
ACCOUNTS: Roku ended the year with 51.2 million active accounts.
OUTLOOK: This quarter, Roku projected a loss of $16 million to $23 million and $478 million to $493 million in revenue, compared with analyts' projected loss of roughly $52 million and $463.2 million in revenue.
For the year, the company said that year-over-year revenue growth would fall below levels it would expect to see in the first and second quarters of 2021 and said that 2021 gross margin would likely be in the mid-40% range as platform margins remain fairly stable and it operates the Player segment at a gross margin close to zero to continue driving device sales and growing active accounts. It said it expects to return to "robust year over year OPEX [opeating expenses] organic growth rates similar to 2019 (vs. most of 2020 where we constrained headcount growth)."
PANDEMIC: Roku has seen higher rates of account activations and streaming hours during the pandemic. It added more than 14 million active accounts in 2020. Strong demand for TV streaming products, company officials have said, as well as strong growth in advertising and expanded content distribution partnerships are helping the company.