What to Watch for in Roku's $219 Million IPO
RokuTV Inc. helped pioneer the streaming video market. Now the device and software maker is asking investors to buy into a new, advertising-driven era via its initial public offering.
The company, which is seeking to raise as much as $219 million, is scheduled to price its IPO Wednesday evening. It’s marketing 15.7 million shares for $12 to $14 apiece, with 9 million shares being sold by Roku and 6 million by its biggest investor, Menlo Ventures, according to a filing with the U.S. Securities and Exchange Commission.
Here are three top metrics investors will be eyeballing:
User Growth
Roku’s No. 1 growth strategy is to increase the number of active accounts by offering a wide breadth of channels in more countries. While its user base typically has grown about 6 percent quarter to quarter, a strong close to 2016 -- including holiday shopping and entertainment -- could pique investor interest.
Average Revenue Per User
ARPU will be a good indicator as to whether one of Roku’s newest business strategies is working. The company plans to make more money for every hour of viewing by selling more advertisements within its platform.
Revenue Share
Last year, Roku got 74 percent of its revenue from selling streaming devices -- its player -- with the rest coming from its software platform. The company aims to increase advertising sales through the platform, which is a higher margin business than devices.
The company, which is seeking to raise as much as $219 million, is scheduled to price its IPO Wednesday evening. It’s marketing 15.7 million shares for $12 to $14 apiece, with 9 million shares being sold by Roku and 6 million by its biggest investor, Menlo Ventures, according to a filing with the U.S. Securities and Exchange Commission.
Here are three top metrics investors will be eyeballing:
User Growth
Roku’s No. 1 growth strategy is to increase the number of active accounts by offering a wide breadth of channels in more countries. While its user base typically has grown about 6 percent quarter to quarter, a strong close to 2016 -- including holiday shopping and entertainment -- could pique investor interest.
Average Revenue Per User
ARPU will be a good indicator as to whether one of Roku’s newest business strategies is working. The company plans to make more money for every hour of viewing by selling more advertisements within its platform.
Revenue Share
Last year, Roku got 74 percent of its revenue from selling streaming devices -- its player -- with the rest coming from its software platform. The company aims to increase advertising sales through the platform, which is a higher margin business than devices.
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