Roku Warns of Challenges Ahead as Revenue Per User Falls, Sending Stock Plunging

By
Bill McColl
Bill McColl
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Bill McColl has 25+ years of experience as a senior producer and writer for TV, radio, and digital media leading teams of anchors, reporters, and editors in creating news broadcasts, covering some of the most notable news stories of the time.

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Published February 16, 2024
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Key Takeaways

  • Roku's average revenue per user dropped 4% from a year ago.
  • Executives warned about macroeconomic challenges and a difficult media environment.
  • Shares plunged 24% on the news in early trading Friday.

Shares of Roku (ROKU) cratered 24% after the streaming service reported a drop in average user spending and warned about challenges ahead.

Roku said average revenue per user in the fourth quarter slumped 4% from a year ago to $39.72. It blamed the decline on active account growth outpacing platform revenue growth.

The company reported a loss of 55 cents per share, about in line with forecasts, while revenue was up 13.5% to $984.4 million, beating estimates.

The news came as Roku announced it had more than 80 million active accounts, and viewer engagement soared, exceeding 100 billion hours streamed during 2023. Both were all-time highs.

In a letter to shareholders, founder and CEO Anthony Wood and CFO Dan Jedda noted that Roku remained “mindful of near-term challenges in the macro environment and an uneven ad market recovery.” They added that the company could face difficult year-over-year growth comparisons in streaming services distribution and a difficult media and entertainment environment for the rest of the year.

Shares of Roku were down 24% at $71.80 per share as of about noon ET Friday. Despite Friday's losses, they've gained 1.7% over the past year.

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  1. Roku. "Form 8-K."

  2. Roku. "Roku Hits Major Milestones, Surpassing 80 Million Active Accounts and More than 100 Billion Streaming Hours in 2023."

  3. Roku. "Shareholder Letter."

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