Streaming device maker Roku has filed for an initial public offering at a proposed maximum offering price of US$100 million.
Loss-making Roku filed a registration statement with the US Securities and Exchange Commission on Friday, but said that the number of shares to be offered and the price range for the proposed offering have not yet been determined.
Roku said it plans to use the offering to increase its capitalisation and financial flexibility.
“We intend to use the net proceeds from this offering primarily for general corporate purposes, including working capital, research and development, business development, sales and marketing activities and capital expenditures,” said the company in its SEC filing.
“We may also use a portion of the net proceeds from this offering for acquisitions of, or investments in, technologies or businessesthat complement our business, although we have no commitments or agreements to enter into such acquisitions or investments.”
Roku said that as of June 30 it had 15.1 million active accounts and that its users streamed more than 6.7 billion hours on the Roku platform in the first six months of this year – up 62% year-on-year.
“TV streaming’s disruptive content distribution model is shifting billions of dollars of economic value. Roku is capitalising on this large economic opportunity as a leading TV streaming platform for users, content publishers and advertisers,” said the company.
It also noted that the hours of content streamed on the Roku platform that included advertising grew to 2.9 billion hours in the first half of the year, up 76% year-on-year.
The company said it has achieved “significant growth” by generating revenue of US$199.7 million in H1 2017, up 23% from US$162.3 million in thefirst half of 2016.
Roku makes 59% of its revenue from the sale of its streaming players, and 41% from its platform in the form advertising revenue and a share of subscription revenues.
However, in the six months ended June 30, the company made a net loss of US$24.2 million and an adjusted EBITDA loss of US$14 million. In fiscal 2016 its net loss was $42.8 million and adjusted EBITDA loss was US$29.9 million.
Listing the risk factors associated with the business, Roku said: “We have incurred operating losses in the past, expect to incur operating losses in the future and may never achieve or maintain profitability.”
It also said that TV streaming is “highly competitive” and many companies, including large technology companies, TV brands and serviceoperators, are actively focusing on this industry.
“If we fail to differentiate ourselves and compete successfully with these companies it will be difficult for us to attract users and our business will be harmed,” said Roku.
In a section of its filing addressing market opportunity, Roku said: “We believe all TV content will be available through streaming. The rapid adoption of TV streaming has disrupted the traditional linear TV distribution model, creating new options for consumers and new economic opportunities for content publishers and advertisers.”
Morgan Stanley and Citigroup Global Markets are acting as lead bookrunners for the proposed offering. Allen & Company and RBC Capital Markets are acting as book-running managers, and Needham & Company, Oppenheimer & Co. and William Blair & Company are acting as co-managers.
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14 August 2018 @ 09:37:00 UTC