ROKU, INC

14. INCOME TAXES

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. Key changes include the immediate expensing of domestic research and development costs and the reinstatement of 100% bonus depreciation. The Company expects domestic cash tax savings and a decrease in its effective tax rate in fiscal year 2025 due to the research and development provisions. The Company has recognized the effects of OBBBA starting in the three months ended September 30, 2025.

Income tax expense was $13.2 million and $4.1 million for the three months ended September 30, 2025 and 2024, respectively. Income tax benefit was $5.7 million and $0.2 million for the nine months ended September 30, 2025 and 2024, respectively.

The increase in income tax expense for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 is primarily due to higher pre-tax book income, partially offset by the impact from the enactment of the OBBBA.

The increase in income tax benefit for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 is primarily due to the impact from the enactment of OBBBA.

A valuation allowance must be established for deferred tax assets when it is more likely than not that they will not be realized. As of September 30, 2025, the Company analyzed all available objective evidence, both positive and negative, and believes it is more likely than not that some deferred tax assets will not be realizable. Accordingly, the Company continues to provide a valuation allowance against its U.S. deferred tax assets.