Roku’s focus shift toward its platform business is continuing to pay off as the company’s fourth-quarter results were marked by a 46% increase in revenue.
The company took in nearly $276 million in revenues during the quarter. Platform revenues rose 77% to more than $151 million, and player revenue rose 21% to more than $124 million.
Although platform gross profit margin fell 230 basis points to 72.2%, Roku still reported a 72% increase in platform gross profits, up to more than $109 million after coming in at $63.7 million in the year-ago quarter. But player gross profit fell 70% to $2.9 million during the quarter. Overall, the company took in $112.3 million in gross profit during the quarter.
For the year, Roku’s total net revenue grew 45% to $742.5 million and platform revenue increased 85% to $416.9 million. Looking ahead, the company is anticipating 2019 revenues will exceed $1 billion.
Much of the credit for 2018’s success and 2019’s projected growth is going to the platform. Roku said it added nearly 8 million active accounts in 2018 and ended the year with more than 27 million total active accounts. The company estimated that nearly 1 in 5 U.S. TV households now use the Roku platform to stream at least a portion of their TV viewing.
“While our growth has been impressive, we believe we are still only beginning to capitalize on the large opportunity streaming presents. We expect to reach $1 billion in revenue in 2019, by focusing on these key areas: increasing monetization per user and scaling the number of households using the Roku platform. With our fundamental strategic advantages and continued strong execution, we believe we are well positioned to deliver another excellent year,” Roku said in a statement.
For the full year of 2018, Roku said that monetized video advertising impressions across the platform more than doubled year over year. But the company has plans to expand monetization in 2019.
The company is expecting the Roku Channel to represent a bigger chunk of its advertising inventory as viewership grows. It also expects the ad industry will catch up to streaming TV.
“In the TV streaming world, viewer share is well ahead of TV ad budget share, but the rapid growth of our platform revenue suggests advertisers are starting to respond. This anticipated spending pattern shift, combined with substantial growth in our ad inventory and audience reach, should drive sustained, rapid advertising growth,” Roku said.