Roku Inc. added more new users than expected as COVID-19 swept across the globe in the first quarter of 2020, and said the increases accelerated as Americans began sheltering-in-place in March.
The streaming-television company announced Tuesday afternoon that it added nearly 3 million new users in the first three months of the year, more than the 2.56 million net adds that analysts expected, according to FactSet. The company said that collective streaming hours for the period was 13.2 billion, up 49% from last year.
“Beginning in late Q1, Roku started to see the effects of large numbers of people ’sheltering at home,’” the company disclosed in an announcement. “For Roku, this has resulted in an acceleration in new account growth and an increase in viewing.”
Roku ROKU, +4.44% stock gained more than 10% in after-hours trading immediately following the announcement. Shares have declined 27.9% so far this year, more than double the 13.7% decline for the S&P 500 index SPX, -1.01% in that time.
Roku sells ads on its platform and its own streaming channel, along with its gadgets that help consumers stream to their TVs. Chief Executive Anthony Wood said that there are concerns about advertising, but he was confident Roku could overcome the issues.
“We have been working closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix, which has been affected by social distancing,” Wood said in the news release. “While we expect some marketers to pause or reduce ad investments in the near term, we believe that the targeted and measurable TV ads and unique sponsorship capabilities that Roku offers are highly beneficial to brands today.”
Roku disclosed that first-quarter revenue should be $307 million to $317 million, after previously projecting $300 million to $310 million. Analysts on average had forecast $301 million, according to FactSet. The company says it expects a net loss of $55 million to $60 million for the quarter, in line with its forecast, while analysts had projected a loss of $52 million.
The company withdrew its outlook for the entire year, and said that it would release full earnings information on May 7.