Earnings

Roku earnings: COVID-19 accelerates cord-cutting

Roku earnings: COVID-19 accelerates cord-cutting
  • Q1 revenue: $321 million (+55% YoY, -22% QoQ, vs. $306.7M expected)
  • Q1 loss: $55.2M (up 515% YoY from $10.7M in Q1 2019)
  • Q2 guidance: Roku has withdrawn its guidance for the rest of the year.

The big number: Roku closed in on 40 million active accounts in Q1, ending March with 39.8 million accounts, and growing its user base 37% year-over-year. Account growth has been accelerating under shutdown orders, with Roku disclosing that new account creation increased by more than 70% in April alone. Company stock surged 8% Thursday before the afternoon earnings call, but those gains were being erased in after-hours trading.

People are talking: "The pandemic is accelerating the shift to streaming by both viewers and the industry," said Roku CEO Anthony Wood during the earnings call. Consumers streamed 13.2 billion hours in Q1 of 2020, up 49% year-over-year, as streaming became everyone's favorite pastime during quarantine.

Opportunities: Roku executives argued Thursday that consumers continued to move away from traditional TV over the past couple of weeks despite being homebound, highlighting that prime-time TV viewing was down 18% year-over-year among 18- to 34-year-olds from mid-March to mid-April. Many of these viewers are opting for streaming instead, a trend that could accelerate during a prolonged economic downturn. "We believe that the pandemic is accelerating secular trends towards streaming, and that these trends are permanent," Wood said. "All those cord-cutters are not gonna re-sign up for cable."

Threats: Roku makes most of its money with advertising, and the company warned investors that it had seen "higher than normal cancellations" amid a general ad market decline. However, the company said it still expected to grow its ad business in 2020, as advertisers shift dollars to digital, and, among other things, look for ways to place advertising that would otherwise have run against live sports.

The power struggle: Roku has made some baby steps over the past two years to compete more holistically against Amazon and Google, which included the launch of its own line of smart speakers. The company also reportedly developed its own router, but has yet to officially announce that device. Engagement in these non-core business areas could slow over the coming months, as Roku told investors Thursday that it took steps to reduce the growth of its expenses at the end of the past quarter, cautioning that could slow progress in "strategic investment areas."

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

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Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

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FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

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Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

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Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

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Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

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