Illustration: VIP+; Adobe Stock
About a quarter of Roku’s cash and equivalents — roughly half a billion dollars — were held at Silicon Valley Bank (SVB), which was shut down by financial regulators on Friday after its collapse. The streaming platform company said it was uncertain how much of that money it would recover.
SVB, after experiencing a stampede for deposits and failing to raise capital to make up the shortfall, was shut down by the California Financial Protection and Innovation Administration, which had designated the FDIC as receiver for its assets. SVB, which had $209 billion in assets at the end of 2022, was trying to find a buyer but was ultimately unsuccessful.
Rocco It was disclosed in the SEC filing Rocco said about $487 million of the $1.9 billion in cash and cash equivalents held with SVB, or about 26% of the company’s cash and equivalent balance as of March 10. . in filing.
“The Company’s deposits with SVB are largely uninsured. At this time, the Company does not know to what extent the Company will be able to recover its funds deposited with SVB.”
FDIC will pay uninsured depositors “a return in advance within the next week,” according to the filing. Uninsured depositors will receive a custody certificate for the remaining amount of their uninsured funds. Because the FDIC sells SVB assets, future dividends may be paid to uninsured depositors.
Roku said it “continues to believe” that its current cash and equivalent balance — plus cash flow from operations — “will be sufficient to meet working capital, capital expenditures, and physical cash requirements from known contractual obligations” for the next 12 months. . “And beyond.”
Roku’s revenue growth slowed dramatically in the back half of last year — and the company expects total revenue to decline by about 5% in the first quarter of 2023. Amid macroeconomic headwinds, Roku’s operating expenses soared — jumping 71% in the fourth quarter. In November, Roku said it would lay off 200 employees in the US, cutting about 5% of its total workforce.
Roku makes and sells its own streaming devices, and has launched its own line of connected TVs – Available exclusively through Best Buy later this month. The company also licenses its operating system to TV manufacturers with brands including TCL, Hisense, Sanyo, JVC, Philips, and Sharp.
However, most of Roku’s revenue comes from ad sales and content partnerships. For the full year 2022, 87% of the company’s revenue, or $2.7 billion, came from the Platforms segment, which reported gross income of $1.5 billion (56% gross margin). By contrast, the Roku hardware business had a negative gross margin last year of -22%.
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