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Roku forecasts fourth-quarter core profit below estimates; shares drop

(Reuters) -Roku on Wednesday forecast fourth-quarter core profit below Wall Street expectations due to high operational costs and said it would stop reporting streaming household metrics in its quarterly results from fiscal year 2025.

The company said on a post earnings call that it expects some incremental increase in operating expense as it is likely to add headcount in fiscal 2025.

The company forecast fourth-quarter core profit of $30 million, compared with analysts’ estimate of $32.55 million.

Shares of the company fell nearly 10% in extended trading.

The streaming platform said that it will discontinue streaming household, one of its key metrics, which includes Average Revenue Per User (ARPU).

A similar move was planned by streaming giant Netflix (NASDAQ:NFLX) in April to stop sharing subscriber numbers starting from 2025.

Roku (NASDAQ:ROKU), however, reported revenue of $1.06 billion, beating analysts’ average estimates of $1.02 billion.

The company is benefiting from customers shifting ad dollars from linear TV to digital connected TV and strong political advertising.

Its platform revenue, the biggest contributor to income, grew about 15% to $908 million in the quarter ended Sept. 30. driven by both streaming services distribution and advertising activities.

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