Roku Earnings: Weak Ad Revenue Market Will Remain a Drag on Top-Line Growth Throughout 2023

Roku started a potentially challenging 2023 on a strong note as first-quarter revenue came in well ahead of guidance. Revenue of $741 million beat management's $700 million outlook, but growth was still anemic at 1%. Management provided second-quarter revenue guidance of $770 million, projecting that growth will remain at about 1%. The adjusted EBTIDA guidance of a $75 million loss next quarter implies that Roku will post its third quarter with an adjusted EBTIDA margin between negative 9% and negative 11%. We expect the adjusted EBITDA losses to continue in the second half of 2023. We are maintaining our fair value estimate of $65 per share.