Roku ended the most recent quarter with 55.1 million active accounts as the company’s user growth and engagement numbers slowed down slightly.
The company added 1.5 million active accounts—compared to 2.4 million in the first quarter and 3.2 million in the same quarter of 2020—but total streaming time on the platform fell by 1 billion quarter over quarter to 17.4 billion hours.
Roku CEO Anthony Wood acknowledged the slowdown in user growth—which was partially due to tougher compares with the surge in streaming video demand brought on by the pandemic—but reassured that the opportunity for growth both domestically and internationally is still huge for his company.
“I mean there are a billion households around the world that have broadband and watch TV. All of those households are going to transition over time to streaming for all of their TV and the way they’re going to get it primarily will be embedded in their TVs,” he said. “So, the real question is market share for smart TVs, and we’re the number one in the U.S. and we’re number one in the markets we’re entering. We’re doing extremely well so I would say there’s still lots of potential for active accounts.”
Roku’s revenues, on the other hand, have been accelerating thanks in large part to platform revenues up 117% during the second quarter, driving total net revenues up 81% year over year to $645 million. That in turn helped drive a quarterly operating income of $69 million, compared to a loss of $42 million in the same quarter of 2020.
Roku attributed the spike in revenues to advertising growth and an uptick in its content distribution business.
“DTC businesses are leaning into the Roku platform, leveraging key tools like Roku Pay and performance marketing to successfully build their streaming services — driving results that are exceeding expectations for both Roku and our partners,” the company wrote in a letter to shareholders. “Media and Entertainment promotional spending (including what we traditionally termed our ‘audience development’ business) grew significantly faster than the overall platform during Q2.”
The Roku Channel, the company’s ad-supported streaming service and subscription video hub, said it doubled its streaming hours year over year as new exclusive content like Roku Originals (which were acquired from Quibi) launch on the service. The company said it will keep pursuing a diverse and cost-effective content strategy and focus primarily on licensing and distribution through its more than 175 partners.