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Roku Gains After Surge in Active Accounts Fuels Revenue Beat

Ryan Vlastelica and Jeran Wittenstein

(Bloomberg) -- Roku Inc. reported a surge in new active accounts in its fourth-quarter results, with the video-streaming platform benefiting from the debut of new services like Disney+. The account additions beat expectations and the shares gained as much as 13% in extended trading.

Active accounts rose by 4.6 million to 36.9 million in the quarter, compared with the average estimate of 35.9 million, according to Bloomberg Consensus estimates. Roku also reported a loss of 13 cents a share on revenue of $411.2 million. Wall Street had been looking for a loss of 14 cents a share and revenue of $391.7 million.

“Disney has had a lot of positive press out in the market and we’ve been a very good source of viewership for Disney+ and they’ve been a good partner,” Chief Financial Officer Steve Louden said in an interview.

For the first quarter, Roku forecast sales of $300 million to $310 million and a loss of $18 million to $23 million before interest, taxes, depreciation and amortization. Wall Street was looking for sales of $296.8 million and Ebitda of $4.2 million.

Thursday’s after-hours move comes after a pronounced gain that has seen shares jump almost 180% over the past year. The company is one of the most visible plays on the so-called over-the-top video sector, which has grown increasingly popular as consumers cut the cord on traditional cable packages and gravitate instead toward on-demand streaming. Walt Disney’s service, launched in November, was seen as accelerating this trend.

Roku’s position within this market has made it a favorite among analysts. According to data compiled by Bloomberg, 13 firms recommend buying the stock, while two have hold-equivalent ratings and three advocate selling.

Roku’s streaming platform has had a “great” reception in Brazil after debuting there last month, Louden said. The Los Gatos, California-based company has a “huge opportunity” in international markets, where the move to streaming is still in “early days,” he said.

(Adds CFO comment in third and last paragraphs.)

To contact the reporters on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net;Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Greg Chang

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