Roku Bumps IPO Target to $252M

Intends to offer 18 million shares at up to $14 each
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Roku now intends to raise as much as $252 million via an IPO that aims to offer about 18.01 million shares for $12 to $14 each, according to an amended S-1 filed Monday.

Earlier this month, Roku filed an S-1 that outlined plans for an IPO that would raise up to $100 million. Roku plans to trade on Nasdaq under the “ROKU” ticker symbol.

The planned IPO would value Roku at between $1.1 billion and $1.3 billion, according to The Wall Street Journal. The $252 million total that could be raised includes $219 million for the company, and an option for underwriters to buy an additional 2.4 million shares, the report added.

Per the S-1, Roku president and CEO Anthony Wood will hold 27.3% of the company’s outstanding common stock, but will wield about 32.1% of the voting power.

For the six months ended June 30, 2017, Roku had revenues of $199.7 million, up 23% from the prior year period. For all of 2016, it generated $398.6 million, up 25% from the $319.9 million brought in during 2015. Roku also posted a net loss of $24.2 million in 2017 through June 30, and a gross profit of $76.5 million.

The majority of Roku’s revenue comes way of sales of streaming players, with the balance from its Platforms business, which includes advertising, subscription revenue sharing, and licensing fees from TV makers that have integrated Roku’s OS (its TV partners include RCA, TCL, Element Electronics, Hitachi America, Haier America, Sharp, and Insignia/Best Buy).  

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Roku also disclosed that it had 15.1 million active accounts by the end of Q2 2017, up from 10.6 million in the year-ago quarter.

While the bulk of hours streamed on Roku’s platform (6.7 billion hours during the first six months of 2017) is of subscription VOD content, Roku noted that it will need users to stream “significantly more ad-supported content” in order to materially increase the monetization of its platform.

Earlier this month Roku, along with a group of content partners, introduced a new free, ad-based aggregated offering called The Roku Channel.