No, Roku's Platform Business Isn't Suddenly More Profitable

One of the things that jumped off the page from Roku’s (NASDAQ: ROKU) first-quarter earnings report was the platform business. Roku’s platform revenue growth accelerated to 101% and its platform gross margin expanded to 67%. While Roku’s starting to lap the impact of COVID-19 on its business, giving it easier comparable quarters, that top-line growth was better than even 2019.

But investors need to dive deeper into what sparked the acceleration and margin expansion to determine whether it’s sustainable. In the case of Roku, it’s more likely the rest of the year looks similar to 2020 than the first quarter of 2021. Here’s why.

Image source: Roku.

Continue reading

Source Fool.com