Roku (ROKU) Q2 Earnings Report Preview: What To Look For

Kayode Omotosho /
2022/07/27 4:45 am EDT

Streaming TV platform Roku (NASDAQ: ROKU) will be announcing earnings results tomorrow afternoon. Here's what to expect.

Last quarter Roku reported revenues of $733.6 million, up 27.7% year on year, beating analyst revenue expectations by 2.1%. It was a mixed quarter for the company, with growing number of users but an underwhelming revenue guidance for the next quarter. The company reported 61.3 million monthly active users, up 14.3% year on year.

Is Roku buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Roku's revenue to grow 24.7% year on year to $804.8 million, slowing down from the 81.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.68 per share.

Roku Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing six downward revisions over the last thirty days. The company missed Wall St's revenue estimates twice over the last two years.

Looking at Roku's peers in the consumer internet segment, some of them have already reported Q2 earnings results, giving us a hint of what we can expect. Twitter's revenues decreased 1.15% year on year, missing analyst estimates by 11.9% and Snap reported revenues up 13.1% year on year, missing analyst estimates by 2.07%. Twitter traded down 3.88% on the results, and Snap was down 23.7%. Read our full analysis of Twitter's results here and Snap's results here.

Triggered by the Federal Reserve's hawkish stance on interest rates, shares of technology companies have been facing sell-off in 2022 and while some of the consumer internet stocks have fared somewhat better, they have not been spared, with share price declining 12.3% over the last month. Roku is down 16.1% during the same time, and is heading into the earnings with analyst price target of $140.7, compared to share price of $83.1.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.