Roku is set to open down 12% after missing expectations on platform revenue

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Roku shares fell more than 12 percent before Thursday trading hours, despite beating third-quarter earnings estimates on the top and bottom lines. One key metric that fell below expectations was platform revenue, which encompasses streaming advertising.

Platform advertising is shaping up to be an increasingly important component of the company’s strategy, CNBC reported Wednesday, as Roku is currently in talks with media companies it hopes will bring more content to its app. While Roku reported total revenue of $173.4 million compared to the $169.1 million analysts were expecting, according to Refinitiv, platform revenue was $100.1 million for the quarter versus the $103.2 million forecast by StreetAccount and FactSet.

Roku has not been able to make as much money per customer as analysts expected, reporting average revenue per user (ARPU) of $17.34, below the $17.44 forecast by StreetAccount.

Analyst notes Thursday morning still indicated confidence in the stock, ranging from neutral to buy ratings. Guggenheim Securities wrote Thursday that Roku’s “stated initiatives and potential expansion opportunities are under-appreciated,” citing its established technology and user base as advantages in the competitive streaming space.

D.A. Davidson and Co. gave Roku a neutral rating, on the other hand, as the increase in active accounts missed its estimates but still “was more than offset” by increased streaming hours and ARPU that beat its expectations.

-CNBC’s Sara Salinas contributed to this report.

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