Company’s stock surges nearly 20% after adding 22 million customers in Q2

Having successfully diversified into advertising from the maturing but still vital OTT device business, Roku exceeded Wall Street expectations in the second quarter, increasing revenue by 57% to $156.8 million.

The company’s stock has surged nearly 20% Thursday morning, with sales of Roku OTT players increasing by 24% amid a heated market that also includes competition from Apple, Google and Amazon.

But the real story for Roku is advertising on its platform, which now commands the lions share of the company’s performance. Roku reported an increase of 22 million accounts in the three-month period ending June 30. Overall, the amount of time users spent watching TV on Roku increased by 57% year over year to 5.5 billion hours.

In fact, the platform generated 58% of Roku’s revenue in the second quarter, with active accounts increasing by 46%.

Roku made a number of moves during the period to extend the reach of its platform. For one, in the U.S., you no longer need a Roku device to access the Roku Channel, which is now available over the internet.

Roku also just expanded reach of the Roku Channel to Canada.

The company recently sold its wares at the upfront for the first time, leveraging not only its own programming channel, but also advertising across the vast network of the hundreds of other channels in its ecosystem.

“I think the big takeaway for us is this is really the first year in which advertisers are proactively planning for OTT as part of their annual TV spending plan,” said Scott Rosenberg, general manager of platform business for Roku, speaking during Wednesday afternoon’s conference call with investment analysts. “Roku now uniquely delivers 10% of adult 18 to 34. So if you're planning against that critical demo, you’ve got to include OTT in your planning process.”

And it raised its full-year revenue forecast to $710 million, surpassing Wall Street consensus forecasts of $698 million.