Roku forecasts first-quarter revenue above estimates on streaming bet

(Reuters) -Roku Inc forecast first-quarter revenue above analysts estimates on Wednesday, betting on its streaming devices and content platform to drive growth.

Shares of the San Jose, California-based company rose nearly 12% in trading after the bell.

A pandemic winner, Roku is benefiting from the ongoing trend of people ditching their traditional cable packages and flocking to subscription-based streaming services.

The companys push towards more original content on its own streaming channel has only helped it to strengthen the influx of subscribers and advertisers.

Many advertisers have been forced to decrease their marketing budgets in response to record-high inflation rates and continued uncertainty about a recession.

“Despite tightening advertising budgets in the fourth quarter, ad spend on the Roku platform outperformed the overall ad and traditional TV markets in the U.S.,” the company said, adding that advertisement spend among verticals such as restaurants, travel, consumer packaged goods and health and wellness appear to be improving so far in the first quarter.

Net revenue was $867.1 million in the quarter ending Dec. 31, compared with analysts expectations of $801.7 million, according to Refinitiv data.

The streaming platform said it was expecting net revenue of $700 million for the first quarter. Analysts were expecting $690.63 million, according to Refinitiv data.

Roku reported net loss of $237.2 million, or $1.70 per share, during the fourth quarter, from a profit of $23.7 million, or 17 cents per share, a year earlier.

(Reporting by Tiyashi Datta in Bengaluru; Editing by Krishna Chandra Eluri)