сен 1, 2017

This scrappy company has fended off competition from Apple and Amazon — and now it's heading for an IPO

Roku has made official what's been rumored: It wants to go public. 

<

The digital media player maker publicly filed its S-1 with the Securities and Exchange Commission on Friday — the first big step for a company seeking an initial public offering (IPO) of its shares.

The company plans to list shares on the Nasdaq stock exchange under the ticker "ROKU."

Nominally, according to the filing, the company seeks to raise as much as $100 million through the stock sale, though that number is just a placeholder and will likely change as the date of the IPO draws closer.

Roku intends to set up a dual-class stock structure, which will give more power to pre-IPO investors than new ones. That will make it easier for current shareholders, including its CEO, to retain control after the public offering. Existing investors will get a new class of stock that will give them 10 votes for every share they own. By contrast, shares sold in the public offering will give investors who own them one vote per share.

This model has been increasingly common as tech companies go public. Google and Facebook both have similar stock structures. But the practice has been controversial, because it can insulate founders and other insiders from legitimate shareholder concerns.

Roku sells boxes that allow consumers to stream Netflix, YouTube and other streaming video services to their televisions. It also offers its software to other consumers electronics makers that want to use it as the interface for their smart TVs. 

Business has been good for Roku. In the first half of 2017, it posted revenue of $199.7 million, up 23% from the same period in 2016, according to the S-1 filing. In fiscal year 2016, it had a total of $398.6 million in revenue, up 25% from 2015.

As of June 30, Roku had 15.1 million active accounts on its service, according to the filing. Customers using Roku devices or TV's with its interface streamed 6.7 billion hours of internet video in the first half of 2017 — up 62% from the same period in 2016, the company said in the filing.  

Currently, most of Roku's revenue comes from the sale of the streaming devices, but the company plans to increase its number of active users and grow the amount of revenue per user. Each active user is currently worth $11.22 to the company — up from $9.28 in 2016, and $6.48 in 2015.

More active users means more platform revenue, which is a mix of advertising sales, streaming subscriptions, and licensing arrangements. These licensing agreements consist of ;a series of partnerships Roku has made with TV makers, such as Haier and Chinese heavyweight TCL. Roku provides a blueprint that lets TV makers bake Roku's technology, including its slick operating system, into its smart TVs in return for a licensing fee.

Despite this growth, Roku is still losing money. Since 2002, the company has incurred a total deficit of $244 million. It lost $24.2 million in the first half of 2017.

The Los Gatos, California, company has been rumored to be moving toward an IPO since July, when it hired Morgan Stanley and Citigroup as underwriters, according to the Wall Street Journal. 

Roku was expected to move toward an IPO in 2014, but it never materialized.


Business Insider

by Becky Peterson