Roku has continued to attract new users to its streaming platform but admitted that the rate of growth was negatively impacted in the previous quarter due to supply chain constraints.
The company ended the third quarter with 56.4 million active users after adding 1.3 million, compared to 2.9 million in the year-ago quarter.
“We believe that the slowdown in active account growth rate this quarter was, in large part, attributable to global supply chain disruptions that have impacted the U.S. TV market. Specifically, overall U.S. TV sales in Q3 fell below pre-COVID 2019 levels. Some of our Roku TV OEM partners were hit particularly hard with inventory challenges, which negatively impacted their unit sales figures and market share in Q3,” the company wrote in a letter to shareholders.
During Roku’s earnings call, CFO Steve Louden said his company expects the disruptions to continue in the fourth quarter and at least part of 2022.
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Despite the supply chain concerns, Roku still grew its total net revenue 51% year over year to $680 million as platform revenue growth offset a decline in Roku player sales. The company reported approximately $130 million in adjusted EBITDA, up a whopping 132% year over year.
The increase was due in part to growth in streaming hours spent on the platform and a rise in ARPU, which Roku said reached $40.10 during the quarter.
Roku said that as more publishers launch their own channels, the distribution of U.S. streaming hours on its platform has shifted. During the quarter, channels outside the top ten increased their share of total streaming hours by nearly five percentage points.
During the call, Roku was asked about its ongoing distribution negotiations with YouTube and whether there’s a potential dispute on the horizon with Amazon. Scott Rosenberg, senior vice president and general manager at Roku, reiterated his company’s stance on Google’s behavior but said the companies are still working to resolve the matter. But he rebuked reports about Amazon and said that Roku’s agreement with Amazon is not up for renewal or in negotiations at this time.