Roku Inc. (ROKU, Financial), the most widely used intelligent TV operating system in the United States, has yet to profit despite years of solid revenue growth.
From $320 million in 2015, the company's revenue has grown exponentially to hit $3.12 billion in 2022.
This stellar revenue growth has led to a five-fold increase in the stock price since its market debut in 2017.
However, the company has yet to be profitable, which is a concern given the magnitude of its revenue growth.
Today, Roku is experimenting with new ways to monetize its user base efficiently.
The company is focused on improving its content slate, advertising opportunities, content distribution deals, and developing advanced devices to grow its user base while increasing monetization chances.
Recent developments suggest it is on the right track to achieving profitability in the long run.
Partnership with Shopify
On July 11, Roku announced a new partnership with Shopify Inc. (SHOP, Financial), enabling its users to buy products directly from Shopify merchants by clicking on advertisements. Users must press the OK button on their Roku remote once they see an ad, which takes them to a product page.
The entire purchasing process can be completed from the TV using Roku Pay. This marks the first time Shopify merchants will have access to TV streaming. As initial partners in this new experience, True Classic, Ergatta, and Olly have already signed up to bring shoppable ads to Roku viewers.
This partnership will open new doors for Roku to bring in advertising revenue in the coming years.
Video advertising has become one of the go-to forms of advertising in the last few years, and businesses of every size are willing to spend money on video ads. According to data from the Interactive Advertising Bureau, digital video ad spending in the U.S. increased by 21% yearly to $47.1 billion in 2022. Even amid macroeconomic pressures that are limiting the expansion of…