Executive Summary

Roku delivered a clean beat and returned to GAAP profitability, with total revenue of $1.2106B (+14% YoY), diluted EPS of $0.16, and positive operating income ($9.5M), the first since 2021 . Platform revenue grew 17% YoY to $1.0646B, while The Roku Channel remained the #2 app by engagement in the U.S. .
Versus S&P Global consensus, Roku beat Q3 revenue ($1.2106B vs $1.2062B*) and EPS ($0.16 vs $0.0813*); management raised FY guidance for Platform revenue to $4.11B and Adjusted EBITDA to $395M, and guided Q4 revenue to ~$1.35B . Values retrieved from S&P Global.*
Mix and execution drove margin resilience: Platform gross margin was 51.5% (50 bps above outlook), while Devices gross margin was -15.7% in line with outlook; Adjusted EBITDA rose to $116.9M (9.7% margin) .
Strategic catalysts include deepening third‑party DSP integrations (Amazon ramp starting in Q4/2026), rapid SMB/performance traction in Roku Ads Manager, and subscription momentum (Premium Subscriptions and Howdy SVOD) .

What Went Well and What Went Wrong

What Went Well

Achieved positive operating income ahead of schedule and first time since 2021; net income of $24.8M with diluted EPS $0.16 . “We delivered strong Q3 results, achieving positive operating income ahead of schedule” — Anthony Wood & Dan Jedda .
Platform strength: revenue +17% YoY to $1.0646B, gross margin 51.5% (50 bps above outlook), driven by video advertising and streaming services distribution; streaming hours +4.5B YoY to 36.5B .
Demand diversification: deeper DSP integrations (Amazon), measurement partners (AppsFlyer, FreeWheel), and Ads Manager momentum (≈90% of Ads Manager advertisers were new to Roku in Q3) . “We want to be open and interoperable and be deeply integrated with all DSPs… the Amazon integration… ramp well into 2026” — Charlie Collier .

What Went Wrong

Devices remained a drag: revenue -5% YoY to $146.0M; gross margin -15.7% (gross loss of $22.9M), in line with outlook and reflecting structural seasonality/tariffs headwinds .
Media & Entertainment (M&E) ad vertical still pressured; while theatrical improved, industry broadly remains challenged, limiting upside contribution versus video/performance advertising .
Amazon DSP contribution is just beginning; management cautioned near‑term impact is modest, contemplated in Q4 guide, with greater lift expected during 2026 .

Financial Results

P&L and Profitability vs Prior Quarters

Metric	Q1 2025	Q2 2025	Q3 2025
Total Net Revenue ($USD Millions)	1,020.7	1,111.0	1,210.6
Total Gross Profit ($USD Millions)	445.0	497.7	524.9
Total Gross Margin (%)	43.6%	44.8%	43.4%
Operating Income (Loss) ($USD Millions)	(57.7)	(23.3)	9.5
Net Income (Loss) ($USD Millions)	(27.4)	10.5	24.8
Diluted EPS ($USD)	(0.19)	0.07	0.16
Adjusted EBITDA ($USD Millions)	56.0	78.2	116.9
Adjusted EBITDA Margin (%)	5.5%	7.0%	9.7%

Note: Adjusted EBITDA excludes other income, stock‑based comp, D&A, restructuring, and income taxes; reconciliations provided in 8‑K exhibits .

Segment Breakdown

Metric	Q1 2025	Q2 2025	Q3 2025
Platform Revenue ($USD Millions)	880.8	975.5	1,064.6
Platform Gross Profit ($USD Millions)	464.3	497.7	547.8
Platform Gross Margin (%)	52.7%	51.0%	51.5%
Devices Revenue ($USD Millions)	139.9	135.6	146.0
Devices Gross Profit (Loss) ($USD Millions)	(19.3)	0.0	(22.9)
Devices Gross Margin (%)	-13.8%	0.0%	-15.7%

KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Streaming Hours (Billions)	35.8	35.4	36.5
The Roku Channel Share of U.S. TV Streaming Time (Nielsen Gauge)	—	5.4%	6.2%
The Roku Channel Rank (Platform Engagement)	#2 U.S.	#2 U.S.	#2 U.S.; #3 reach globally

Q3 2025 vs S&P Global Consensus

Metric	Consensus	Actual	Δ
Revenue ($USD Millions)	1,206.16*	1,210.64	+0.4%
Diluted EPS ($USD)	0.0813*	0.16	+0.08
Values retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Net Revenue ($USD Millions)	Q3 2025	~$1,205	Actual: $1,210.6	Beat
Total Gross Profit ($USD Millions)	Q3 2025	~$520	Actual: $524.9	Beat
Adjusted EBITDA ($USD Millions)	Q3 2025	~$110	Actual: $116.9	Beat
Net Income ($USD Millions)	Q3 2025	~$10	Actual: $24.8	Beat
Platform Gross Margin (%)	Q3 2025	~51%	Actual: 51.5%	Beat
Total Net Revenue ($USD Millions)	Q4 2025	—	~$1,350	New
Total Gross Profit ($USD Millions)	Q4 2025	—	~$575	New
Adjusted EBITDA ($USD Millions)	Q4 2025	—	~$145	New
Net Income ($USD Millions)	Q4 2025	—	~$40	New
Platform Revenue ($USD Billions)	FY 2025	$3.95 → $4.075	$4.11	Raised
Adjusted EBITDA ($USD Millions)	FY 2025	$350 → $375	$395	Raised
Platform Gross Margin (%)	FY 2025	~52%	~52%	Maintained
Other Income (EBITDA recon) ($USD Millions)	Q4 / FY 2025	~$20 / ~$100	~$10 / ~$90	Lower

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Third‑party DSP integrations	Deepened integrations with The Trade Desk (UID2), Yahoo, Wurl; announced Amazon DSP integration in June	Amazon DSP turned on; early days; contemplated in Q4 guide; ramping into 2026	Strengthening; ramp in 2026
Roku Ads Manager (SMB/performance)	Launched; non‑material yet; large addressable market; Spaceback/Shopify integrations to lower creative cost	Fast growth; ~90% advertisers in Q3 new to Roku; performance focus; generative AI integration underway	Accelerating
Home Screen/UI monetization	AI‑driven content row boosted subscriptions/ad reach	Larger home screen update testing; targeting 2026 rollout; dual goals: satisfaction and monetization	Product upgrade pending
Subscriptions momentum	Premium subscriptions growth; Frndly TV acquisition closed; bundling capabilities improving	Howdy (SVOD $2.99) launched; Roku‑billed subscriptions growing; tier‑one launches in pipeline	Expansion (1P + 3P)
Sports Experience	MLB Sunday Leadoff engagement +40% reach; Sports Zone drives discovery	NFL Zone traffic tripled YoY; sports aggregation drives signups; expansion to Mexico	Positive tailwind
Pricing/upfront/macro	Upfront positive; programmatic share rising	Pricing stability in new upfront; multiple levers across demand curve; Q4 pricing positive	Improving
ARPU trajectory	Platform revenue initiatives to raise ARPU; 100M streaming households target in 2026	ARPU expected to grow faster alongside household growth; significant upside potential	Uptrend
Regulatory/legal	—	Federal court dismissed Roku’s Access Advance lawsuit; highlights jurisdiction limits on global FRAND	Legal overhang clarity (neutral)
Devices/tariffs	Devices soft; tariff impacts persistent	Devices revenue roughly in line YoY for Q4; margin negative high‑20% expected; seasonality	Mixed, consistent headwind

Management Commentary

“We delivered strong Q3 results, achieving positive operating income ahead of schedule and for the first time since 2021… We are increasing our full year outlook.” — Anthony Wood & Dan Jedda .
“Third‑party DSP integrations… we announced our relationship with Amazon… so far it’s looking good. It’s just starting to ramp up.” — Anthony Wood .
“Approximately 90% of advertisers on Ads Manager were new to Roku… we are very bullish about our position as the open and interoperable partner.” — Charlie Collier .
“We have $2.3B of cash and short‑term investments… trailing 12‑month free cash flow over $440M… repurchased $50M of stock… outlook Q4 Adjusted EBITDA $145M.” — Dan Jedda .
“We are leveraging AI to transform Roku Voice… AI‑generated ‘Why to Watch’ summaries… helping reduce active cancellation rates in Q3.” — Shareholder Letter .

Q&A Highlights

Amazon DSP rollout: Live but early; contemplated in Q4 guide; expected to ramp into 2026, similar to prior Trade Desk deep integration .
Ads Manager scale and performance: SMB/performance advertisers are net new; ~90% new advertisers in Q3; generative AI to drive automated creative and targeting .
ARPU and households: Strong belief ARPU can grow significantly with monetization initiatives; target of 100M streaming households in 2026; ARPU growth expected to outpace household growth in U.S. .
Pricing/upfront: Pricing stability in upfront; multiple pricing levers; positive pricing trends into Q4 .
Sports aggregation: Sports fragmentation is a tailwind; Sports Zone simplifies discovery; creates marketing/advertising opportunities .

Estimates Context

Q3 2025 beat: Revenue $1,210.6M vs $1,206.2M*; diluted EPS $0.16 vs $0.0813* . Values retrieved from S&P Global.*
Q4 2025 setup: Consensus revenue ~$1,352.8M*; consensus EPS ~$0.2667* vs company guidance of ~$1,350M revenue and ~$145M Adjusted EBITDA . Values retrieved from S&P Global.*
Implications: Upward revisions likely to FY EBITDA and Platform revenue given raised FY targets; note definitional differences between S&P EBITDA consensus and Roku’s Adjusted EBITDA (non‑GAAP) .

Key Takeaways for Investors

Platform momentum and diversification underpin sustained double‑digit growth; Roku is growing faster than U.S. OTT/digital ad markets and broadening demand via DSPs and SMB performance channels .
Non‑GAAP profitability turning point: Q3 Adjusted EBITDA 9.7% margin and GAAP operating income positive; Q4 guide targets record Adjusted EBITDA ($145M) and FY lift to $395M .
Subscription flywheel expanding: Premium Subscriptions, Frndly TV integration, and Howdy SVOD add durable revenue streams, aided by AI‑driven discovery and bundling capabilities .
Product/UI catalyst in 2026: Home screen redesign testing well for engagement and monetization; expect incremental yield from Roku Experience surfaces .
Devices remain a headwind but strategically critical for OS scale; margin seasonality/tariffs persist; Q4 Devices margin guided to negative high‑20% .
Near‑term ad pricing stability and programmatic integrations improve bid density and fill rates; Amazon DSP should incrementally benefit 2026 after initial ramp .
Capital discipline supports per‑share value: $50M buyback in Q3 within $400M program; strong cash and FCF position to offset dilution .

Bolded beats/misses in tables indicate estimate and guidance outperformance; non‑GAAP definitions and reconciliations included in 8‑K exhibits .

ROKU, INC (ROKU)·Q3 2025 Earnings Summary