10:24 AM, May 17, 2018 — Roku (ROKU) management said during a “well-attended” investor group meeting on Wednesday that viewership is rapidly growing and inventory mix is being monetized, Oppenheimer said in a note to clients.
Investor questions reportedly focused on the Roku Channel, video on-demand revenue and inventory sharing economics, ad monetization and Amazon’s (AMZN) deal with Best Buy (BBY), the firm said.
“On The Roku Channel, management emphasized fast viewership growth while noting that 100% of inventory on The Roku Channel was being sold by Roku, which was helping balance the company’s historical ad inventory supply constraint,” Oppenheimer said.
Management also noted the mix of inventory on the platform that’s being monetized is increasing with video advertisements expected to compose 50% or more of gross margins over time.
“As the company gains scale, management believes their negotiating position relative to content providers will improve,” the firm said.
Roku’s ability to covert “light-targeting” advertisers to advanced targeting products will help the company maintain a premium cost-per-viewer, management said, and the Amazon/Best Buy deal likely will mean increased number of Roku-enabled televisions in major retailers. The company said 25% of smart TVs sold domestically were enabled by Roku in the first quarter versus 20% in 2017.
Companies: Roku, Inc.
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