Is Roku Stock A Buy Following Strong Q2 Results?

Roku published its Q2 2023 results on Thursday, beating estimates on key metrics including subscriber additions and overall revenue growth, taking the stock up by about 8% in after-hours trading on Thursday. While revenues rose by 11% year-over-year to $847 million, net losses stood at a narrower-than-expected $0.76 per share.

The advertising market has been facing headwinds as concerns about inflation and slowing consumer spending hurt spending by marketers on TV advertising. However, Roku managed to grow revenue for its platform business – which sells ads and content – by 11%, driven by a 16% year-over-year increase in active users. This helped to more than offset a 7% decline in average revenue per subscriber.