In quarter, with a net loss widens, shares plunge

(Reuters) – U.S. video streaming service Roku, Inc. ROKU.(O) reported a wider net loss in the third quarter of the year on Wednesday, as if to attract subscribers to its streaming video platform.

FILE PHOTO, A sign displays the logo for the Roku Inc., the Fox-backed video company in the heart of Times Square, after the company’s initial public OFFERING on the Market and on Nasdaq in New York, New York, united states of america, September 28, 2017. REUTERS/Brendan McDermid/File Photo

The shares fell 15 percent in extended trading.

The San Jose, Calif., the net loss widened to $25.2 million, or 22 cents per diluted share, for the third quarter ended Sept. 30, from $9.5 million, or 9 cents a share, a year earlier.

The loss wasn’t as bad as the Street had expected, however. Analysts had expected a loss of 28 cents per share, according to the Refinitiv estimates.

Total operating expenses for the quarter increased from approximately 60% to $ 145 million from the year-ago period.

“Fire lord, had a strong income, but they do get aggressive and do not make a lot of earnings power because of it,” said Chaim Siegel, an analyst at Elazar Advisors.

Total net revenue rose to $260.9 million, or even slightly better than the forecast of $173.4 million for the year-ago period.

Roku, which sells the devices that allow users to stream video services such as Netflix (NFLX.O) and Apple Inc (AAPL.O) and Apple TV, said to be Disney, which is the upcoming streaming service from the Walt Disney Co. (DIS.(N) was about to launch on their platform.

“Overall, we are very excited about the launch of new services in the industry, and our platform,” said Roku Chief Executive Officer Anthony Wood. “We have customers who are willing to look into the premium services. We have a customer who would like to look at it as free content. We have a customer who would like to look at it as well. We think, therefore, that all of these models are supported on our platform.”

In September, Roku announced a new line of streaming players in North America, Latin America, and a number of other European markets, with a retail price of $29.99 for the In the Express unit.

As for the streaming video market has become more crowded, the Roku has shifted its focus from the sale of advertising, which is now the company’s fastest growing revenue stream.

In taking a cut of some of the advertising from the media companies to stream programming on the free, ad-supported Roku channels. It also makes money from the sale of the premium streaming subscriptions, and to take a cut of the revenue from the ads that the marketers need to be up-to-the-Roku for the end-users.

In October, Roku announced that it had spent $150 million to acquire Dataxu, which enables marketers to plan and buy video advertising campaigns. The deal is expected to be completed in the fourth quarter of the year.

Report by Helen Coster in the New York and Ayanti Berra in Bengaluru; Editing by Rosalba O’brien, Diane Craft and Leslie Adler

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