Roku benefited from the rise in streaming due to the COVID-19 pandemic, adding 2.9 million accounts in Q1 2020, up 37 percent year over year. The company now has 39.8 million active accounts, with 13.2 billion streaming hours in the quarter, representing a 37 percent year-over-year increase. This, however, was a smaller increase than its 68 percent jump in Q4 2019 and a decline from 16.3 billion hours in the same quarter. Roku also warned that advertising revenue will also likely drop in 2020.

Variety reports that, “Roku posted revenue [of] $320.8 million — up 55 percent year over year, and higher than analyst consensus estimates of $306.7 million — and a net loss of $54.6 million (45 cents per share), in line with expectations.”

In Q1, Roku’s Platform segment (advertising and subscription/transactional revenue) rose 73 percent, to $232.6 million, and its Player segment (hardware) revenue grew 22 percent, to $88.2 million. Roku also just debuted its OneView Ad Platform, which integrates its “advertising inventory with identity and attribution tools of demand-side platform Dataxu, which the company acquired in November 2019.”

Investors responded to the news that ad revenue would be decreasing, with shares dropping 9 percent in after-hours trading. Roku reported that “acceleration of growth in new Roku accounts and viewership continued in April,” with active accounts growing about 38 percent over April 2019, with a “year-over-year increase in new accounts of more than 70 percent.”

Streaming hours last month also grew “by roughly 80 percent year-over-year, driven by an increase in streaming hours per account of about 30 percent.”

Roku founder/chief executive Anthony Wood and chief financial officer Steve Louden wrote investors that “the pandemic associated stay-at-home orders and increased unemployment appear to have accelerated the shift from linear TV viewing to streaming during the past few weeks.” But its “platform monetization has been a mixed bag,” with higher-than-normal advertising campaign cancellations, “partially offset by spend that has moved from traditional TV budgets to Roku’s over-the-top video.”

Wood and Louden said they believe the ad business will generate “substantial revenue growth” on a year-over-year basis, “albeit at a slower pace and lower gross profit than we originally expected for the year.” “Some of the trends are positive for us, some of them are short-term negative,” said Louden. “But most of these trends accelerate the long-term trend toward streaming. The positive for us in OTT is that for the money that’s left in marketers’ budgets, they’ll be looking for measurable and targeted spend.”

In Q1, Roku introduced a “Are you still watching?” feature that “exits video playback after long periods of user inactivity, so was expected to reduce overall streaming time across its user base.”