Roku Forecasts Q4 Profit Below Expectations

(Reuters) – Roku forecasted a fourth-quarter core profit below Wall Street expectations due to high operational costs and will stop reporting streaming household metrics in its quarterly results starting fiscal year 2025.

The company mentioned during a post-earnings call that it anticipates some incremental increase in operating expenses as it is likely to add headcount in fiscal 2025.

Q4 Profit Forecast

Roku expects a fourth-quarter core profit of $30 million, compared to analysts' estimate of $32.55 million. Upon this announcement, shares of the company fell nearly 10% in extended trading.

Discontinuation of Key Metrics

The streaming platform will discontinue reporting streaming household metrics, which includes Average Revenue Per User (ARPU). A similar decision was made by Netflix in April, opting to stop sharing subscriber numbers from 2025.

Despite the challenges, Roku reported revenue of $1.06 billion, exceeding analysts' average estimates of $1.02 billion. The company is benefiting from the shift of advertising dollars from linear TV to digital connected TV, alongside strong political advertising.

Platform Revenue Growth

Its platform revenue, the largest contributor to income, grew about 15% to $908 million in the quarter ending Sept. 30, fueled by both streaming service distribution and advertising activities.