Roku Inc posted a bigger net loss in the first quarter on Thursday, as the video streaming device maker spent more to attract subscribers to its free ad-supported channel, sending its shares down 7% in extended trading.
The company, whose devices compete with Amazon Fire TV and Google Chromecast, said sales and marketing expenses doubled to $68.2 million from a year earlier.
Total operating expenses rose 76% to 196.3 million in the quarter.
The company said its ad business saw “higher than normal cancellations” in the quarter, mirroring a broader decline in overall advertisement spending due to the COVID-19 pandemic.
This comes at a time when Roku is shifting its focus from device sales to advertising as more streaming services enter the market.
Roku, however, saw higher engagement on its platform as online entertainment surged due to stay-at-home orders. It added 2.9 million active accounts over the last quarter, bringing the total to 39.8 million at the end of the first quarter.
Net loss widened to $54.6 million, or 45 cents per share, in the quarter ended March 31, from $9.7 million, or 9 cents per share, a year earlier. On a per share basis, this was in line with the market expectation.
Total net revenue rose 55% to $320.8 million, beating analysts’ average estimate of $306.7 million, according to IBES data from Refinitiv.