Key takeaways
- Roku's average revenue per user fell 4% from the previous year.
- Executives warned of macroeconomic challenges and a difficult media environment.
- Shares plummeted 24% following the news in early trading on Friday.
Roku (ROKU) stock plunged 24% after the streaming service reported a drop in average user spending and warned of challenges ahead.
Roku said average revenue per user in the fourth quarter fell 4% from a year earlier to $39.72. He blamed the decline on growth in active accounts that outpaced the platform's revenue growth.
The company reported a loss of 55 cents per share, roughly in line with forecasts, while revenue rose 13.5% to $984.4 million, beating estimates.
The news came as Roku announced it had more than 80 million active accounts and viewer engagement skyrocketed, surpassing 100 billion hours streamed during 2023. Both were all-time highs.
In a letter to shareholders, founder and CEO Anthony Wood and CFO Dan Jedda noted that Roku remained “aware of near-term challenges in the macro environment and an uneven recovery in the advertising market.” They added that the company could face difficult year-over-year growth comparisons in streaming service distribution and a difficult media and entertainment environment for the rest of the year.
Roku shares fell 24% to $71.80 per share around noon ET on Friday. Despite Friday's losses, they have gained 1.7% over the past year.