Roku shares rose more than 9% after-hours Monday after the company said it expects Q1 revenue to be slightly higher than expected in its prior outlook, and still expects strong growth in active accounts and streaming hours as consumers are home amid shelter-in-place orders to meant slow the Covid-19 coronavirus pandemic.
Roku also withdrew its full-year guidance given uncertainty about how the pandemic will play out.
The company estimates total net revenue to be between $307 and $317 million for the first quarter; the company's previous outlook expected $305 million as the midpoint of total revenues.
The company said it estimates it will have 39.8 million active accounts as of March 31, 2020, with a net increase of 3 million since December 31. It also expects its first-quarter streaming hours to be 13.2 billion, a 49% increase year-over-year. Roku previously reported that users spent 11.7 billion hours streaming in the fourth quarter of 2019.
The company noted early in the first quarter it completed rolling out its "Are you still watching feature" that exits video playback after user inactivity, which was expected to result in slower growth. But that feature was more than offset by usage from people sheltering in place.
"As previously noted, the roll out of this feature will moderate streaming hour growth; however, beginning in late Q1 Roku started to see the effects of large numbers of people 'sheltering at home,'" the company said in a statement.
"For Roku, this has resulted in an acceleration in new account growth and an increase in viewing."
The company's CEO Anthony Wood said consumers are turning to the platform "now more than ever."
"We have been working closely with advertisers to help update their plans to reflect new viewing patterns and adjust their overall marketing mix which has been affected by social distancing," Wood said. "While we expect some marketers to pause or reduce ad investments in the near term, we believe that the targeted and measurable TV ads and unique sponsorship capabilities that Roku offers are highly beneficial to brands today."
The company said it ended the first quarter with an estimated $587 million of cash, cash equivalents, restricted cash and short-term investments, including a $70 million draw-down from its revolving credit facility. The company will release first-quarter 2020 results on May 7 after market close.