© Reuters. People pass by a video sign display with the logo for Roku Inc, a Fox-backed video streaming firm, that held it’s IPO at the Nasdaq Marketsite in New York, U.S., September 28, 2017. REUTERS/Brendan McDermid
(Reuters) -Roku forecast third-quarter revenue above market expectations on Thursday on the back of a recovery in the ad market, sending the shares of the streaming device maker up 4% in extended trading.
After several months of muted spending, companies are raising their expenditure on ads on signs of an improving economic environment.
“We have begun to see some ad verticals improve, which resulted in modest YoY platform revenue growth in Q2, and we are well positioned to re-accelerate growth as the ad market recovers,” company executives said in a letter to shareholders.
Roku (NASDAQ:) expects $815 million in net revenue in the July-September period, higher than analysts’ projection of $809.6 million, according to Refinitiv data.
Its strong guidance comes after large digital platforms Meta Platforms and Alphabet (NASDAQ:) delivered upbeat results on higher digital ad sales.
Roku, which offers streaming devices and also has its own ad-supported channel, also posted better-than-expected results for the quarter ended June.
Net revenue grew 11% to $847.2 million, above estimates of $774.5 million, while adjusted loss came in at 76 cents per share, lower than the estimate of $1.26.
The company said it added 1.9 million “active accounts” from the previous quarter to 73.5 million.