Roku required a victory under the present circumstances. Despite the company reported a significant gain from the previous quarter's $737.7 million to $764 million.
The business fell short of Wall Street's expectations. Analysts anticipated revenue of $805 million, or a 25% increase over the prior year.
Who or what is to blame for falling short? In a letter to shareholders, Roku noted that the macroeconomic situation had caused a considerable slowdown in TV advertising spending.
Consumers started to reduce their discretionary spending, and advertisers drastically reduced their ad scatter market spending (TV ads bought during the quarter).
As global markets are under pressure due to economic concerns, we anticipate these difficulties to persist in the near future.
The magnitude of the slowdown in the market for advertising scatter, according to CFO Steve Loudon, was not anticipated.
The company expects third-quarter revenue to increase by 3% from 2021 to $700 million, significantly less than analysts' forecasts of $898.3 million.
Roku shares fell 25% to $63.80 in Thursday after-hours trade. Nearly 63% of the stock has been lost thus far in 2022.