shares a crater on “recession fears”

The Roku 3 TV Streaming Player menu is shown on TV in Los Angeles, California, USA on Thursday, September 9th. 12, 2013.

Patrick T. Fallon | Bloomberg via Getty Images

Roku shares fell more than 25% in extended trading on Thursday after the company fell short of expectations on its earnings top and bottom. second quarter and warned of “an economic environment driven by fears of a recession.”

Here’s how the company did it:

  • Income: According to Refinitv, the loss was 82 cents per share against an expected loss of 69 cents.
  • Income: $764 million vs. $805 million expected, according to Refinitv.

The company attributed its poor financial performance to macroeconomic conditions, including inflation, as well as supply chain issues.

Roku added that the advertising market will continue to suffer in the current quarter and consumer spending will decline, which could hurt the company’s business of selling Roku TV and related hardware devices. The company said it cut operating expenses and slowed headcount growth in the second quarter.

“We believe this pullback reflects the start of the pandemic in 2020, as marketers prepared for macroeconomic uncertainty by rapidly cutting ad spending across all platforms,” Rock said in a letter to shareholders.

In addition, Roku missed its forecast and said it would generate $700 million in revenue in the third quarter, well below the $902 million that analysts polled by Refinitiv estimated.

Due to market volatility, Roku said it was withdrawing its growth estimate for the full year.

The company said advertisers cut their spending on TV ads during the quarter, stressing that recessionary fears are forcing businesses to cut marketing.

Meta, for example, informed poor second-quarter financial results this week, with executives blaming “macro uncertainty” and a “weak advertising demand environment” that will continue into the current quarter.

Click as well as Twitterthat rely on online advertising also reported weak financials and cited a difficult ad market that does not appear to be recovering anytime soon.

This story is evolving.