Roku reported third-quarter revenue of $1.5 billion, a 24% increase from the prior year, as advertising and subscription activity lifted its platform business. Net income reached $183 million, while adjusted EBITDA was $249 million and gross profit rose 24% to $649 million.
The results were released after Monday’s market close and exceeded Wall Street expectations. Adjusted earnings per share came in at $1.20, compared with an analyst consensus of 53 cents. Roku’s platform revenue, which combines advertising and subscriptions, increased 23% to $1.3 billion.
Advertising remains the main growth engine
Advertising revenue climbed 23% to $727.4 million, marking the ninth consecutive quarter in which the business recorded double-digit growth. Roku said the increase reflected stronger demand for higher-margin advertising products and deeper connections with third-party advertising platforms.
Subscription revenue also grew 23%, reaching $580.9 million. The company attributed that performance to efforts to expand subscriptions billed through its streaming platform. Roku said it is concentrating on monetization across advertising, direct-billed subscriptions and the user experience rather than relying on a single revenue stream.
“We are building a diversified and durable business by focusing on monetization initiatives: deepening integrations with third-party advertising platforms, growing Roku-billed subscriptions, and enhancing the Roku Experience.” — Anthony Wood and Dan Jedda, in Roku’s shareholder letter
Roku’s engagement metrics continued to rise, although more slowly than platform revenue. Streaming hours totaled 39.9 billion, up 9% year over year, and the company said The Roku Channel was the platform’s second-most-engaged application in both the United States and worldwide. Roku now reports a presence in more than 100 million households globally.
Connected-TV hardware adds volume but remains pressured
Devices revenue increased 33% to $193.7 million. The segment’s gross margin was negative 25.1%, which Roku attributed mainly to higher memory costs. For manufacturers, distributors and integrators working with connected-TV platforms, the result highlights the different economics between hardware sales and the platform services attached to those devices.
| Metric | Q3 result | Year-over-year change |
|---|---|---|
| Total revenue | $1.5 billion | +24% |
| Platform revenue | $1.3 billion | +23% |
| Advertising revenue | $727.4 million | +23% |
| Subscriptions revenue | $580.9 million | +23% |
| Devices revenue | $193.7 million | +33% |
Roku also pointed to two September product and service launches as potential contributors to future revenue. Its Premium Subscription bundles offer more than 35 service combinations, while the company introduced its first OLED televisions: Roku Pro Series OLED and Pro Series LX OLED. The televisions are sold exclusively through Amazon, according to the shareholder update.
Fox deal limits financial visibility
Roku did not provide a financial outlook with the quarterly results because of Fox Corporation’s pending acquisition of the company. It also did not hold an earnings call, leaving the quarterly release and shareholder materials as the primary public update for the period.
- Revenue increased 24% to $1.5 billion.
- Advertising and subscriptions each grew 23%.
- Devices revenue rose 33%, but device gross margin was negative 25.1%.
The combination of strong platform growth and weaker device economics leaves Roku’s advertising and subscription performance central to its results as the Fox transaction advances. The company’s latest figures also show the growing importance of connected-TV platforms as distribution, advertising and subscription billing channels for content providers.
