Roku Stock Slips After Q1 Beat, Mixed Guidance But Retail Optimism, Activity Grow

The company said it remains confident in its strategy and continues to see a path to achieving positive operating income in 2026, despite the uncertainties.

Roku, Inc. (ROKU) stock saw a jump in retail chatter after the streaming device maker's quarterly results were released.

San Jose, California-based Roku reported a net loss per share of $0.19, narrower than the year-ago loss of $0.35. The bottom-line result was also better than the analysts' estimate of $0.26 per share, according to Finchat. 

Quarterly revenue jumped 16% year over year (YoY) to $1.02 billion versus the $1.01-billion average analysts' estimate.

Platform (86% of the total) experienced 17% growth. The company attributed its strength to video advertising and streaming device distribution.

Gross margin was 43.6%, down from the year ago's 44.1% but expanded from the previous quarter's 42.7%.

Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $56 million compared to $40.9 million last year, with the corresponding margin improving YoY to 5.5% from 4.6%.

Among operational metrics, streaming hours rose 5.1 billion hours YoY to 35.8 billion hours.

Roku affirmed its 2025 outlook for $3.95 billion in platform revenue and $350 million adjusted EBITDA. However, it reduced the revenue guidance for the year to $4.55 billion from $4.61 billion. This compares to the consensus estimate of $4.54 billion. 

The company said the tariff-related impact on its Devices business was hard to predict. Still, it expects revenue and the negative gross profit to remain consistent with last year's levels.

"While uncertainty remains, we are confident in our strategy and continue to see a path to achieving positive operating income in 2026," said CEO Anthony Wood and CFO Dan Jedda in a letter to shareholders.

The company expects second-quarter revenue of $1.07 billion, which aligns with the consensus estimate of $1.069 billion, and adjusted EBITDA of $70 million.

Separately, the company agreed to buy a subscription streaming service called Frndly TV. 

On Stocktwits, the message volume on the Roku stock stream spiked by over 640% over the 24 hours ending late Thursday. 

Sentiment among retailers was 'extremely bullish' (88/100).

A bullish watcher lauded the Frndly buy. "We think the strategic move buying Frndly has elevated ROKU's playing field in streaming," they said.

Another user slammed investors for selling the stock, as they said, "A proven company with solid earnings beat and guidance that is generally on point, ends up tanking."

Roku stock ended Thursday's session down 1.33% at $67.27 and fell 5.46% after hours. It has shed about 10% this year.

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