Market Insight

Roku Files for $100M IPO; 15 Million Accounts, $42M Loss in 2016, Unsure of Profitability

September 05, 2017  | Subscribers Only

Paul Erickson Paul Erickson Senior Research Analyst, Service Provider Technology

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Roku recently filed for a $100M initial public offering on September 1st, backed by 21st Century Fox, Fidelity, and Menlo Ventures as major shareholders. The company’s stock will list on the NASDAQ exchange under the symbol ROKU.

The supplier of over the top set-top boxes and the Roku TV streaming video platform for consumers and service providers revealed a number of operating metrics and details that were previously unknown.

  • Roku had 15.1 million accounts as of June 2017, consuming more than 6.7 billion hours of content during the first half of 2017.
  • Company revenues increased 25% in 2016, reaching $399 million – but at a $43 million loss.
  • The company cited an accumulated deficit of $244 million, and that it expects to incur operating losses in the future, has been operating at a loss in the past, and may never achieve or maintain profitability
  • 74% of the company’s revenues came from hardware-related sales in 2016 dropping to 59% during the first half of 2017. Advertising revenue share grew from 26% in 2016 to 41% in 2017.
  • The company’s main hardware OEM’s are Foxconn and Lite-On.
  • Five of the top channels in the Roku lineup represent 69% of total viewing during the first six months of the year – and Netflix comprised 30% of all viewing hours.
  • Netflix and YouTube are Roku’s two most popular channels by viewing hours, but the company receives no revenue from YouTube and does not consider Netflix revenue to be substantive or material to operating results for the foreseeable future.

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