Roku has posted flat revenues for Q4 2022 ($867 million), despite adding 10 million accounts and boosting streaming hours by 23 percent YoY.
The company put the disparity down to “a difficult year for investors and a difficult year for the advertising market,” and offered to “meet marketers where they’re currently transacting programmatically” in order to more effectively monetise its customer growth.
Roku plans to open up its inventory to more third-party DSPs, expecting a shift toward video advertising in the year ahead. “We think there is a day coming soon when all media plans begin with streaming,” said Roku Founder and CEO Anthony Wood.
The firm acknowledged the impact of squeezed consumer spending on its device revenues, with player unit sales down 19 percent. “While Q4 platform revenue came in above our expectations, inflation and macroeconomic uncertainty continue to pressure consumers and advertisers,” said Roku CFO Steve Louden.
“We expect the macro trends that have pressured consumer and advertiser spend to continue in the near term,” he added, forecasting Q1 total revenues to decline 20 percent quarter over quarter. Roku also pledged further “belt-tightening” to lower its costs, having cut 7 percent of its workforce in November.
Taking control
Roku additionally talked up its new line of own-brand TVs, giving the company full control of hardware as well as its software. The CEO likened the expansion to Google manufacturing phones that run Android OS. “It’s very common for a program to have both first-party and third-party devices in the program,” said Wood. “Brands and companies do this because it gives our consumers more choice. And it really helps drive innovation as you understand better the integration of the hardware and the software, and that results in more innovations and those innovations roll out to licensing partners as well.”
The earnings call also covered the firm’s commerce partnerships, including Walmart Connect, Kroger and the DoorDash deal announced this month. The relationship allows DoorDash merchants to place click-to-order offers within Roku ads, the company explained, enabling advertisers to attribute, target and measure their streaming ads. “Roku is taking a lead because of its tech stack and literally teaching new consumer behavior,” said Roku Media President Charlie Collier, “in this case, how to interact with the TV screen.”
Collier noted that Roku is uniquely placed in the CTV ecosystem by virtue of being a platform rather than a streaming app. “There’s an emerging appreciation that Roku is not just another player in the streaming wars but that the streaming wars are actually being fought on the Roku platform, and that is a tremendous advantage for all of us.”
