As advertisers pull back on spending and supply chain disruptions persist, investors have braced themselves for an unpleasant quarter for Roku. And investors are probably right to be worried.

“Platform revenue grew 15% year over year, which was lower than our historical growth rates but positive given the difficult macro environment. Advertising spend on our platform continues to grow more slowly than our beginning-of-year forecast due to current weakness in the overall TV ad market, and the ad scatter market in particular,” the company said.

Roku missed revenue expectations last quarter and reported a total net revenue of $764 million, which was $41 million less than Wall Street’s expectations. The company blamed the slowdown in TV ad spending for missing the mark.

Its free streaming service, The Roku Channel, saw a jump in streaming hours of 90% year-over-year.

With Google and Amazon already in the smart home market, it’s likely Roku doesn’t anticipate becoming the first choice for consumers. Still, it makes sense for the company to monetize the smart home experience to the many consumers that already have Roku smart TVs in their homes.

During a conference call with reporters, Roku chief financial officer Steve Louden said: “Expanding into the smart home ecosystem is a natural extension for Roku. Obviously, we’re a leading TV streaming platform, and smart TV is usually at the center of someone’s smart household. It’s a good extension to leverage our existing 65 million active accounts.”

The company added in its letter that it’s still “early days,” but Roku has the “necessary technology and expertise in hardware, software, and connectivity to deliver a smart home ecosystem that is simple, powerful, and delightful.”

Roku drops ~19% as it braces for a bumpy fourth quarter by Lauren Forristal originally published on TechCrunch

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