Roku: The Dominant Smart TV Platform

Strong growth continues within active accounts, streaming hours and Average Revenue Per User or ARPU.

The shift from hardware revenue to platform revenue continues to accelerate as Roku earns more from advertising on the platform and their Roku channel.

Well-funded competition from the likes of Apple and Amazon do not provide the same breadth of content Roku does.

In what has quickly become a commoditized product category, Roku (ROKU) has established itself as a clear winner within the battle for Smart Television operating systems. As the cost of Smart TVs continue to come down, cord cutting accelerates and Roku shifts into advertising and channel distribution, I believe Roku is positioned for several years of continued growth.

Growth
As you can see from the chart below, Roku continues to grow active accounts greater than 40% to over 20 million, streaming hours greater than 50%, and Average Revenue Per User or ARPU grew greater than 50% in the latest quarterly results year over year.



This growth will likely continue as Roku continues to own the operating systems of the top 10 best selling Smart TVs on key selling channels such as Amazon.com (AMZN) and Bestbuy.com (BBY). In Q1 2018, roughly 1 in 4 TVs sold were Roku powered. On key selling Amazon Prime Day, Roku powered 5 of the top 10 selling TVs on Amazon.



Mix Shift
Roku's management realizes that to build a moat, the company must own the operating platform on TVs as opposed relying only on hardware sales like Roku sticks. As that shift takes place, Roku stands to earn a better profit margin. In Q1 2018, the platform accounted for 45% of revenue compared to 36% in Q1 2017 and 25% in Q1 2016. Platform gross margin ranged from 71-77% in recent quarters versus a hardware gross margin of 6-17%.

source : https://seekingalpha.com/article/4188057-roku-dominant-smart-tv-platform

https://www.servicedonline.com/roku-tv-customer-support-phone-number/

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