What did you think of the Roku results? I thought it was a mixed bag. I didn't like the slowing user growth and lower streaming hours but I liked the strong ARPU, platform revenue, and solid guidance. The COVID comps are tough to deal with. I might reduce my 10% position to 6-7% and add to a higher conviction SaaS favorite.
Sorry for the delay on this. Lots going on with DDOG, NET and UPST.
As for Roku's Q, I thought the ad numbers crushed it and the flywheel is kicking in. Customers and hours were obviously down, but management said they'd do better than pre-COVID with viewer adds and they did (1.5M adds vs 1.4 in 2Q19). Hours were down across every medium due to people being outside and Roku was one of the few actually up.
Overall, I'm content to hold but will probably cut my allocation down to say 8% or so given the new customer variable and increased player cost. Viewer adds in 3Q19 was 1.8M I believe. If they come in 1.9M or higher next Q along with decent stabilization in hours, everything should be fine. The move to streaming isn't going to stop. However, if customer adds are low and players are delayed too much, there could be a temporary slog which might make me reassess.
I cut Roku after earnings from 10% to 6%. I agree that the tough comps, slowing user growth , and increased costs are a yellow flag. I'll be watching user adds closely next quarter and may cut further if they go below pre-covid. Wow! Upstart up 60% sequentially. S &M spend up 50% but margins still expanded. Wait until auto loans start contributing in 2022. Very exciting!
What did you think of the Roku results? I thought it was a mixed bag. I didn't like the slowing user growth and lower streaming hours but I liked the strong ARPU, platform revenue, and solid guidance. The COVID comps are tough to deal with. I might reduce my 10% position to 6-7% and add to a higher conviction SaaS favorite.
Hey Jeff -
Sorry for the delay on this. Lots going on with DDOG, NET and UPST.
As for Roku's Q, I thought the ad numbers crushed it and the flywheel is kicking in. Customers and hours were obviously down, but management said they'd do better than pre-COVID with viewer adds and they did (1.5M adds vs 1.4 in 2Q19). Hours were down across every medium due to people being outside and Roku was one of the few actually up.
Overall, I'm content to hold but will probably cut my allocation down to say 8% or so given the new customer variable and increased player cost. Viewer adds in 3Q19 was 1.8M I believe. If they come in 1.9M or higher next Q along with decent stabilization in hours, everything should be fine. The move to streaming isn't going to stop. However, if customer adds are low and players are delayed too much, there could be a temporary slog which might make me reassess.
Hope that helps.
I cut Roku after earnings from 10% to 6%. I agree that the tough comps, slowing user growth , and increased costs are a yellow flag. I'll be watching user adds closely next quarter and may cut further if they go below pre-covid. Wow! Upstart up 60% sequentially. S &M spend up 50% but margins still expanded. Wait until auto loans start contributing in 2022. Very exciting!
Good update, cheers!