ROKU, INC

Previous wording

Effective in the first quarter of 2026, our reportable segments changed. We now manage and report our operating results through three reportable segments: Advertising, Subscriptions, and Devices. Previously, we reviewed and managed the new Advertising and Subscriptions segments as a combined Platform segment. This change was made to reflect our ongoing evaluation and monitoring of our business, including changes made to both our internal reporting and the information reported to the CODM. Segment financial information for the first quarter of 2025 has been retrospectively adjusted to reflect these changes.

Current wording

Effective in the first quarter of 2026, our reportable segments changed. We now manage and report our operating results through three reportable segments: Advertising, Subscriptions, and Devices. Previously, we reviewed and managed the new Advertising and Subscriptions segments as a combined Platform segment. This change was made to reflect our ongoing evaluation and monitoring of our business, including changes made to both our internal reporting and the information reported to the CODM. Prior period segment financial information has been retrospectively adjusted to reflect these changes.

Previous wording

Subscriptions revenue is generated from the sale of subscriptions to end users, including subscription revenue shares from content partners, the sale of Premium Subscriptions, and the sale of owned and operated subscription services. Subscriptions revenue also includes the sale of branded app buttons on remote controls.

Current wording

Subscriptions revenue is generated from the sale of subscriptions to end users, including the sale of Premium Subscriptions, the sale of owned and operated subscription services, and revenue from content distribution arrangements, which primarily includes subscription revenue shares from content partners and the sale of branded app buttons on remote controls.

Previous wording

We streamed 38.7 billion and 35.8 billion hours during the three months ended March 31, 2026 and 2025, respectively, reflecting an increase of 8%.

Current wording

We streamed 37.9 billion and 35.4 billion hours during the three months ended June 30, 2026 and 2025, respectively, reflecting an increase of 7%.

Previous wording

We use Platform revenue as a primary metric to measure the performance of our business because it represents our ability to successfully monetize our platform. Platform revenue includes revenue from both our Advertising and Subscriptions segments and its growth is one of our strategic priorities. Platform revenue was $1,131.2 million and $880.8 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

We use Platform revenue as a primary metric to measure the performance of our business because it represents our ability to successfully monetize our platform. Platform revenue includes revenue from both our Advertising and Subscriptions segments and its growth is one of our strategic priorities. Platform revenue was $1,221.0 million and $975.5 million for the three months ended June 30, 2026 and 2025, respectively.

Previous wording

Adjusted EBITDA is a non-GAAP financial measure. The Adjusted EBITDA reconciliation excludes total other income, net, stock-based compensation expense, depreciation and amortization, restructuring charges, and income tax expense (benefit) from the net income (loss) of the period. We believe Adjusted EBITDA is useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, this non-GAAP financial measure has limitations, and should not be considered in isolation or as a substitute for our GAAP financial information, such as GAAP net income (loss). In addition, Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.

Current wording

Adjusted EBITDA is a non-GAAP financial measure. The Adjusted EBITDA reconciliation excludes total other income, net, stock-based compensation expense, depreciation and amortization, restructuring charges, merger-related costs, and income tax expense (benefit) from the net income (loss) of the period. We believe Adjusted EBITDA is useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, this non-GAAP financial measure has limitations, and should not be considered in isolation or as a substitute for our GAAP financial information, such as GAAP net income (loss). In addition, Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.

Previous wording

Our Free Cash Flow was $538.8 million and $298.4 million for the TTM periods ended March 31, 2026 and 2025, respectively.

Current wording

Our Free Cash Flow was $704.1 million and $392.0 million for the TTM periods ended June 30, 2026 and 2025, respectively.

Previous wording

We generate Subscriptions revenue from the sale of subscriptions to end users, including subscription revenue shares from content partners, the sale of Premium Subscriptions, and the sale of owned and operated subscription services. Subscriptions revenue also includes the sale of branded app buttons on remote controls.

Current wording

We generate Subscriptions revenue primarily from the sale of subscriptions to end users, including the sale of Premium Subscriptions, the sale of owned and operated subscription services, and revenue from content distribution arrangements, which primarily includes subscription revenue shares from content partners and the sale of branded app buttons on remote controls.

Previous wording

Comparison of the Three Months Ended March 31, 2026 and 2025

Current wording

Comparison of the Three and Six Months Ended June 30, 2026 and June 30, 2025

Previous wording

Advertising revenue increased by $129.9 million, or 27%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily driven by an increase in video ad impressions delivered. Video impressions increased by 59%, reflecting greater engagement and growth in video consumption on our platform as well as benefits from various monetization initiatives. This increase was partially offset by lower average price per impression of 14%, which was driven primarily from changes in product and country mix.

Current wording

Advertising revenue increased by $133.8 million, or 25%, during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to an increase in video ad impressions delivered. Video impressions increased by 40%, driven by higher user engagement and growth in streaming hours on our platform. This increase was partially offset by a decrease in the average price per impression of 12%, which was driven by changes in product and country mix.

Previous wording

Subscriptions revenue increased by $120.5 million, or 30%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily due to a 12% increase in the number of subscriptions and a 22% increase in the average price per subscription. Included within these increases was the addition of our owned and operated subscription services, including both the acquisition of Frndly TV in May 2025 and the launch of Howdy in August 2025.

Current wording

Subscriptions revenue increased by $111.7 million, or 26%, during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily due to a 11% increase in the number of subscriptions and a 25% increase in the average price per subscription. Additionally, the 26% growth was driven in part by the expansion of our owned and operated subscription services, including the acquisition of Frndly TV in May 2025 and the launch of Howdy in August 2025.

Previous wording

Devices revenue decreased by $22.2 million, or 16%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease in revenue is primarily due to lower sales of streaming players. During the three months ended March 31, 2026, the average selling price of all devices shipped decreased by 3% and the volume of all devices shipped decreased by 15% as compared to the three months ended March 31, 2025.

Current wording

Devices revenue decreased by $1.8 million, or 1%, during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The volume of all devices shipped decreased by 31% driven by lower sales of streaming players, while the average selling price of all devices shipped increased 35%, due to higher sales of Roku-branded TVs in the comparable periods.

Previous wording

Cost of revenue, advertising increased by $29.3 million, or 14%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily driven by a $39.8 million increase in the costs of acquiring and delivering licensed content for TRC due to an increase in user engagement and video ad impressions delivered, partially offset by a $6.8 million decrease in content amortization.

Current wording

Cost of revenue, advertising increased by $15.4 million, or 6%, during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily driven by a $22.3 million increase in the costs of acquiring and delivering licensed content for TRC due to an increase in user engagement and video ad impressions delivered, partially offset by a $7.7 million decrease in content amortization.

Previous wording

Cost of revenue, subscriptions increased by $101.3 million, or 50%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily driven by higher licensing and content costs of $67.4 million, which included costs related to our owned and operated subscription services, Frndly TV (beginning in May 2025) and Howdy (which launched in August 2025), and a growth in streaming hours.

Current wording

Cost of revenue, subscriptions increased by $81.0 million, or 34%, during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025, primarily driven by higher licensing and content costs. The increase in licensing and content costs include amounts related to Frndly TV, acquired in May 2025, and Howdy, launched in August 2025.

Previous wording

Research and development expenses increased by $4.9 million, or 3%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily driven by higher facilities and IT expenses of $5.2 million and higher cloud hosting and consulting expenses of $3.7 million. The increase was partially offset by $2.3 million of non-recurring restructuring costs in the prior year.

Current wording

Research and development expenses increased by $6.6 million, or 2%, during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase was driven by higher cloud hosting and consulting expenses of $9.6 million and higher facilities and IT expenses of $5.3 million, partially offset by lower personnel expenses of $7.1 million due to decreases in stock-based compensation expense.

Previous wording

Sales and marketing expenses decreased by $2.5 million, or 1%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The decrease was primarily driven by lower marketing expenses of $8.8 million, partially offset by a $3.0 million increase in intangible amortization from our Frndly TV acquisition, and a $1.8 million increase in cloud hosting and consulting expenses.

Current wording

Sales and marketing expenses decreased by $22.5 million, or 5%, during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The decrease was primarily driven by lower marketing expenses of $37.3 million, partially offset by a $6.8 million increase in personnel expenses and a $4.6 million increase in intangible amortization from our Frndly acquisition.

Previous wording

General and administrative expenses increased by $7.9 million, or 8%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase is primarily due to an increase of $9.8 million in non-income based taxes, partially offset by lower legal and consulting expenses of $3.1 million.

Current wording

General and administrative expenses increased by $24.9 million, or 25%, during the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. The increase was primarily due to $18.7 million of merger-related costs incurred in connection with our proposed transaction with Fox, and the recognition of $13.4 million in non-income based taxes, partially offset by a decrease in other legal and consulting expenses of $9.7 million.

Previous wording

Total other income, net, increased by $19.7 million, or 114%, during the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily due to a gain on the sale of strategic investments of $13.4 million.

Current wording

Total other income, net, increased by $14.9 million, or 33%, during the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The increase was primarily due to a gain on the sale of strategic investments of $13.4 million.

Previous wording

Income tax expense increased by $16.0 million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The increase was primarily driven by an increase in pre-tax book income, partially offset by decreases due to a reduction in U.S income taxes due to the 2025 enactment of the One Big Beautiful Bill Act.

Current wording

Income tax expense increased by $11.0 million, or 189%, for the three months ended June 30, 2026, and by $27.0 million, or 143%, for the six months ended June 30, 2026, as compared to the corresponding prior year periods. The increases were primarily attributable to higher pre-tax book income, partially offset by a reduction in U.S. income taxes resulting from the 2025 enactment of the One Big Beautiful Bill Act.

Previous wording

As of March 31, 2026, we had cash and cash equivalents of $1,649.9 million and short-term investments of $730.3 million. Approximately 6% of our cash was held outside the United States in accounts held by our foreign subsidiaries, which are used to fund foreign operations, and all short-term investments were held in the United States.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $2,001.8 million and short-term investments of $555.4 million. Approximately 4% of our cash was held outside the United States in accounts held by our foreign subsidiaries, which are used to fund foreign operations, and all short-term investments were held in the United States.

Previous wording

During the three months ended March 31, 2026, we repurchased 1.0 million shares of our Class A common stock through our stock repurchase program. All share repurchases were made using cash resources. As of March 31, 2026, $150.0 million remained of our $400 million stock repurchase program. See Note 12 to our Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report for additional details.

Current wording

During the second quarter of 2026, we repurchased 0.5 million of our Class A common stock through our stock repurchase program. All share repurchases were made using cash resources.

Previous wording

Cash provided by operating activities increased in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to net income of $85.7 million in the current year, compared to a net loss of $27.4 million in the prior year, which was partially offset by lower non-cash charges primarily due to lower stock-based compensation and a decrease in other operating assets and liabilities due to an increase in collections and payments made.

Current wording

Cash provided by operating activities increased in the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to net income of $249.9 million in the current year, compared to a net loss of $16.9 million in the prior year.

Previous wording

Net cash provided by investing activities increased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 due primarily to sale of strategic investments of $18.4 million and partially offset by purchases of property and equipment of $3.1 million.

Current wording

Net cash provided by investing activities increased during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 due primarily to the sales and maturities of short-term investments, net of purchases, of $175.0 million and sale of strategic investments of $18.4 million. The increase was partially offset by purchases of property and equipment of $6.9 million.

Previous wording

Net cash used in financing activities increased during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily due to tax payments of $51.5 million to net settle equity awards vested during the period and $100.0 million in repurchases of our common stock, partially offset by proceeds from the exercise of employee stock options of $1.8 million.

Current wording

Net cash used in financing activities increased during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to $162.7 million in repurchases of our common stock, tax payments of $110.8 million to net settle equity awards vested during the period, and payment of contingent consideration related to the acquisition of Frndly TV of $15.2 million, partially offset by proceeds from the exercise of employee stock options of $36.6 million.

Previous wording

For a description of our purchase obligations and operating lease obligations, refer to Note 13 and Note 10 to our Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report, respectively.

Current wording

For a description of our operating lease obligations and purchase obligations, refer to Note 10 and Note 13 to our Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report, respectively.