Roku Surges After Raising Q3 Sales Guidance

Roku (ROKU:US) shares have surged by nearly 13% in early Wednesday trading following the company's announcement of workforce reductions and an improved outlook for third-quarter revenue. 

Roku said it has decided to cut approximately 10% of its workforce as part of ongoing efforts to reduce year-over-year operating expense growth. This move is aimed at enhancing overall profitability and aligning with the company's goal of achieving positive EBITDA in 2024.

Charges associated with these workforce reductions are estimated to range from $45 million to $65 million, with the majority of these charges expected to be incurred in the third quarter.

Moreover, the video streaming company raised its outlook for third-quarter net revenue, now expecting it to be in the range of $835 million to $875 million, compared to the previous estimate of approximately $815 million.

The company also provided an outlook for third-quarter adjusted EBITDA, projecting it to be in the range of -$40 million to -$20 million, excluding restructuring costs. 

Roku also estimates a preliminary impairment charge of $160 million to $200 million for the third quarter related to ceasing the use of certain office facilities and a range of $55 million to $65 million for removing select content from its Company-operated services on the TV streaming platform.

Representatives Ro Khanna and Daniel Goldman were trading ROKU shares earlier this year. Most recently. Rep. Goldman purchased $15,000 - $50,000 worth of shares on April 10, when they traded at $64.32.

Roku stock was seen trading at nearly $95 apiece on Wednesday.