Disney Earnings, Roku Earnings
Hello everyone. Given Apple’s event on Monday (1 pm ET / 10 am PT), the next update will go out on Tuesday.
As you watch the event, if you have questions or observations that you would like addressed in the daily updates, send them my way. This includes any specific questions regarding the products themselves as there will be some demo time on Monday.
Today’s update will have a video streaming theme as we circle back to cover a few remaining CY2Q24 earnings releases from last month. For both Disney and Roku, the discussion will extend a bit beyond just what was found in their respective earnings.
Let’s jump in.
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Walmart Buys Vizio, Walmart vs. Amazon, Revisiting the Roku Story
We go over my thoughts on Walmart buying Vizio. The discussion includes a closer look at the Walmart vs. Amazon competitive battle. We also revisit Roku’s strategy and the massive holes in the company’s story.
An Above Avalon membership is required to read this update. Members can read the full update here. (Members: Daily Updates are accessible via the archive. If you haven’t logged into the archive before, fill out this form to receive an invite.)
Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time.
An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here. Special Inside Orchard bundle pricing is available for Above Avalon members. Additional membership customization is available via the Financial Models add-on.
Roku 3Q22 Earnings, Peloton 1Q23 Earnings (Daily Update)
Hello everyone. In today's update, we will focus on earnings from two of the smaller companies playing in the tech arena (Roku and Peloton). While Roku is an Apple competitor, Peloton remains a good source for assessing how consumers are thinking about different forms of connected fitness.
Let's jump right in.
Roku 3Q22 Earnings
Roku reported earnings back on November 2nd.
With macro issues taking a big toll on Roku's advertising business, the company's user growth and engagement appear to be rare bright spots. We say “appear” as it’s difficult to get comfortable regarding how streaming companies define and measure engagement. According to Roku, an active account is anyone who has streamed something in the past 30 days. It's easy to see how that definition offers quite a bit of wiggle room for volatility.
As shown below, Roku has seen a small rebound in new user growth (on a TTM basis).
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Roku Losing Flexibility, YouTube Quietly Unveils Podcast Homepage, Big Ten Passes Over Apple (Daily Update)
The following update was sent to members on August 30th.
Hello everyone.
One quick clarification and then a programming alert.
Clarification. Regarding yesterday’s discussion, Apple offers three months of TV+ with qualifying Apple hardware purchase. That is a promotion with specific language tied to availability and qualifications. Apple does not offer a blanket promotion in which Apple TV+ is given to free to all Apple device owners.
Programming Alert. Over at my other website, Inside Orchard, this week’s essay (Roku's Bad Bet) was focused on why I think Roku is experiencing fallout from one bad bet that it placed regarding its place in streaming. Inside Orchard is home to my perspective and ideas on the tech industry that don’t quite fit with Above Avalon. You can think of them as sibling sites. As a reminder, Above Avalon members can bundle an Inside Orchard subscription with their membership and receive a 50% discount in the process. Judging from the increasing percentage of members who have the bundle, it’s a pretty compelling offer.
In today’s update, we will begin with Roku. My focus is on the company’s most recent earnings report and a read-through to Apple.
Roku Losing Flexibility
Here’s Roku founder and CEO Anthony Wood in the company’s 2Q22 shareholder letter released at the end of July:
“In Q2, there was a significant slowdown in TV advertising spend due to the macro-economic environment, which pressured our platform revenue growth. Consumers began to moderate discretionary spend, and advertisers significantly curtailed spend in the ad scatter market (TV ads bought during the quarter). We expect these challenges to continue in the near term as economic concerns pressure markets worldwide. In response, we took steps in Q2 to significantly slow both operating expense and headcount growth.”
The macro environment is serving as a cover for what is likely underlying deterioration in Roku’s business model due to changing industry dynamics. Instead of going over various numbers and percentages tied to 2Q22, here are three key takeaways from Roku's earnings release that jumped out at me:
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Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.
The daily updates have become widely read and influential in the world of Apple and technology. They are unmatched in the marketplace in terms of comprehensive analysis and research on all things Apple. Members reside in 60 countries and hold a diverse range of backgrounds and occupations. They include Silicon Valley executives and investors, the largest Apple shareholders, and the leading Apple journalists in the business.
More information about Above Avalon membership, including the full list of benefits and privileges, is available here.