Roku's Dominance in Connected TV Advertising Is Growing
Roku (NASDAQ: ROKU) has seen its advertising business gain considerable strength over the last couple of years. Its platform business has generated over $630 million in revenue over the trailing 12 months, and it grew 79% year over year last quarter. Management has said that advertising accounts for as much as 75% of its platform revenue in some quarters. This year, Roku will generate about $600 million in ad revenue, according to an estimate from RBC Capital's Mark Mahaney.
Ad revenue will grow 2.5 times over the next few years, reaching $1.5 billion in 2022, Mahaney says. Meanwhile, U.S. connected TV ad spending is only expected to grow at about half that rate in the same period based on a forecast from eMarketer.
Despite increased competition in connected TV advertising from Amazon (NASDAQ: AMZN) as well as a push by traditional pay-TV providers to move into the connected TV space, Roku is growing its share of the burgeoning advertising market.
Source Fool.com
