Can Roku Win Small Business?

Key numbers from Roku’s earnings:
1) 1.3M active accounts added in Q3
2) 56.4M total active accounts
3) 82% YoY increase in advertising revenue
4) 50% YoY increase in ad revenue per hour of streaming

PSA #1: Roku’s advertising business is growing at an increasing rate.  The growth rate (82%) is faster than the previous three years (78%, 79%, and 74%)

PSA #2: Roku’s advertising revenue per streaming hour is growing at the fastest rate of any Q3!

Flashback: Can Roku Keep Rising?

Big picture: We continue to believe $0.05 per hour is attainable in the near term for any streaming service that combines targeting with measurement.  Roku generates ≈ 60% of linear TV’s ad revenue/hour with ≈ 25% of the ad load.

Roku active accounts (YoY growth):
1) 2016-Q3 – 11.3M
2) 2017-Q3 – 16.7M (↑ 48%)
3) 2018-Q3 – 23.8M (↑ 43%)
4) 2019-Q3 – 32.3M (↑ 36%)
5) 2020-Q3 – 46.0M (↑ 42%)
6) 2021-Q3 – 56.4M (↑ 23%)

Roku advertising revenue (YoY growth):
1) 2016-Q3 – $22M
2) 2017-Q3 – $58M (↑ 158%)
3) 2018-Q3 – $100M (↑ 74%)
4) 2019-Q3 – $179M (↑ 79%)
5) 2020-Q3 – $319M (↑ 78%)
6) 2021-Q3 – $583M (↑ 82%)

Roku advertising revenue per account (YoY growth):
1) 2016-Q3 – $1.97
2) 2017-Q3 – $3.44 (↑ 75%)
3) 2018-Q3 – $4.21 (↑ 22%)
4) 2019-Q3 – $5.55 (↑ 32%)
5) 2020-Q3 – $6.94 (↑ 25%)
6) 2021-Q3 – $10.33 (↑ 49%)

Roku streaming hours per account (YoY growth):
1) 2016-Q3 – 212
2) 2017-Q3 – 287 (↑ 35%)
3) 2018-Q3 – 261 (↓ 9%)
4) 2019-Q3 – 319 (↑ 22%)
5) 2020-Q3 – 322 (↑ 1%)
6) 2021-Q3 – 319 (↓ 1%)

Roku advertising revenue per streaming hour (YoY growth):
1) 2016-Q3 – $0.009
2) 2017-Q3 – $0.012 (↑ 29%)
3) 2018-Q3 – $0.016 (↑ 35%)
4) 2019-Q3 – $0.017 (↑ 8%)
5) 2020-Q3 – $0.022 (↑ 24%)
6) 2021-Q3 – $0.032 (↑ 50%)

Smart: Roku launched a Shopify app targeting their 1.7M merchants.

Quote from Rob Aksman – Co-Founder and CEO @ Brightline:“If I’m a company like Roku looking for my next big revenue story, that’s a nice big nut to crack.”

More: The Rundown: Roku’s audience, revenue, and viewership continue to grow, but it’s dealing with supply chain challenges

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