Roku — Q2 2026 Earnings Summary

Financial Performance

• Total net revenue reached $1.35 billion, a 22% increase year-over-year.
• Platform revenue grew 25% YoY to $1.22 billion, driven by Advertising ($672.8 million, +25% YoY) and Subscriptions ($548.2 million, +26% YoY).
• Devices revenue was $133.7 million, down 1% YoY.
• Total gross profit was $673.7 million, up 35% YoY, with a total gross margin of 49.7% (up 4.9 percentage points YoY).
• Platform gross margin was 53.0% (up 2.0 percentage points YoY); Advertising gross margin was 62.4% (up 6.5 percentage points YoY); Subscriptions gross margin was 41.4% (down 3.6 percentage points YoY).
• Net income was $164.2 million, a 1,464% increase YoY.
• Adjusted EBITDA was $254.3 million, a 225% increase YoY, with an Adjusted EBITDA margin of 18.8%.
• Free Cash Flow (TTM) was $704.1 million, up 80% YoY.
• Cash flow from operations (TTM) was $719.0 million, up 81% YoY.
• Operating expenses were $527.5 million, up 1% YoY, with Sales and Marketing down 8% YoY to $223.2 million.
• Cash and cash equivalents were $2.0 billion as of June 30, 2026.

Guidance and Future Outlook

• No financial outlook or guidance was provided due to the pending acquisition by FOX.
• The company expects to roll out the new Roku Home Screen to international markets in the coming months.
• S&M expense is expected to increase in the second half of 2026 versus the first half as shipment volumes for Roku TV models ramp up.
• Political advertising spend is expected to build through late Q3 and into Q4 ahead of Election Day.
• New DVR features are expected to roll out in the coming months.
• Smartly is expected to add incremental performance revenue by early 2027.

Business Segments and Product Lines

• Platform: The new Roku Home Screen, the biggest update in over a decade, was completed in the U.S. in early Q3 and improved household retention.
• Advertising: Third-party DSPs accounted for nearly three-quarters of in-stream video ad spend. New demand partner Smartly was announced. The Roku Sports Experience reached viewers across multiple international markets, and branded zones for NFL, MLB, NBA, and NHL are available in the U.S.
• Subscriptions: The World Cup was aggregated in the Soccer Zone, driving hundreds of thousands of sign-ups. FOX One and Peacock launched pause/resume features for live programming. Howdy (ad-free SVOD) expanded to Mexico and became available on Prime Video and as a standalone mobile app.
• Devices: Devices revenue benefited from an IEEPA tariff refund. Excluding the refund, Q2 Devices gross margin would have been (7.6%). Roku-made TVs represented approximately 5% of total U.S. TV unit sales volume. OEM licensing partners include Hisense and TCL.

Market and Competitive Landscape

• The Roku Channel was the #2 app on the platform by engagement in the U.S. and achieved a platform best share of TV viewing on Nielsen's The Gauge™ for May 2026.
• Video advertising on the platform outpaced both the U.S. OTT and digital ad markets.
• Roku TV OS requires significantly less dynamic memory (DRAM) and storage memory (Flash) than competing platforms, providing a cost advantage.
• Roku is the #1 TV streaming platform in the U.S., Canada, and Mexico by hours streamed.

Risks and Challenges

• Pricing pressure resulting from tightening memory chip supply affects the entire electronics industry.
• Distribution costs for Roku TV model sales represent a significant component of S&M expense and are weighted toward the second half of the year.
• Forward-looking statements involve risks regarding the pending transaction with FOX, competitive advantage, and business trajectory.

Management Commentary and Tone

• Management described the quarter as "very strong," noting record highs in net income, Adjusted EBITDA, and Free Cash Flow.
• The company emphasized its "open and partner-friendly platform" and the alignment of interests between Roku, publishers, and advertisers.
• Management stated the pending acquisition by FOX is an "extraordinary opportunity to accelerate our vision."
• The tone was confident regarding the scale, platform strategy, and financial strength positioning the company for sustainable long-term growth.

Other Key Points

• On June 15, 2026, Fox Corporation and Roku announced a definitive agreement for FOX to acquire Roku.
• Due to the pending transaction, no earnings call will be hosted.
• Streaming Hours were 37.9 billion, up 7% YoY.
• Roku made approximately $162.7 million in repurchases of common stock in the six months ended June 30, 2026.
• The company incurred $18.7 million in merger-related costs in Q2 2026.
• Howdy is a premium, ad-free SVOD service priced at $3/month.
• Roku TV models made by OEM partners account for the largest portion of overall unit volume.