: Roku stock rallies after company reaches agreement with Google over YouTube

United States

Shares of Roku Inc. are surging Wednesday after the streaming-media company confirmed that it will be extending its agreements with Alphabet Inc. services YouTube and YouTube TV.

Roku ROKU, +13.71% and Alphabet’s GOOG, -0.20% GOOGL, -0.22% Google had been in heated negotiations about the future of YouTube and YouTube TV on the Roku platform. Roku had pulled the YouTube TV app from its channel store back in April after the companies failed to agree on terms for the online-cable service.

Now the companies appear to be on better footing, with a Roku spokesperson saying Wednesday that the two have “agreed to a multi-year extension for both YouTube and YouTube TV.” The arrangement is “a positive development for our shared customers, making both YouTube and YouTube TV available for all streamers on the Roku platform,” the spokesperson continued.

Terms of the deal weren’t disclosed.

Roku’s stock was up 10.5% in Wednesday morning trading, while shares of Alphabet were off 0.5%.

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Back in April, Roku maintained that it wasn’t seeking additional “financial consideration” through its YouTube TV negotiations, though the company said it was pushing back at requests from Google that it deemed “anticompetitive.” Google said at the time that it was looking to renew the YouTube TV agreement under “existing reasonable terms” and denied that it made requests “to access user data or interfere with search results.”

Wells Fargo analyst Steven Cahall wrote in a late November note to clients that he thought investors were “concerned about core YouTube falling off of Roku at some point” as tensions escalated over YouTube TV.

Even with Wednesday’s rally, shares of Roku are off 29% over the past three months, as the S&P 500 SPX, -0.12% has risen about 4%.