Start here if you're new
what it is
Roku puts streaming software on your TV, sells devices, and sells ads against the 127.1 billion hours you watch.
how it gets paid
Last year Roku made $4.7B in revenue. Platform advertising was the main engine at $2.30B, or 49% of sales.
why it's growing
Revenue grew 15.2% last year. Revenue was $4.7B for the trailing year, up 15.2%.
what just happened
Roku's last report beat hard, with EPS of $0.53 versus a $0.26 estimate.
At a glance
B balance sheet — gets the job done, barely
10/100 earnings predictability — expect surprises
370.8x trailing p/e — you're paying up for this one
4.0% return on capital — nothing to write home about
xvary composite: 38/100 — weak
What they do
Roku puts streaming software on your TV, sells devices, and sells ads against the 127.1 billion hours you watch.
Roku had 89.8 million streaming households at the end of 2024, and they streamed 127.1 billion hours that year. Scale matters here. More viewing brings more ad inventory, which brings more advertisers, which brings more money back to the platform. Platform segment revenue was 88% of the latest September quarter, so your thesis is really about Roku owning the TV home screen.
How they make money
$4.7B
annual revenue · their business grew +15.2% last year
Platform advertising
$2.30B
+17.0%
Content distribution
$0.95B
+15.0%
Subscriptions and services
$0.59B
+14.0%
TV licensing and partner revenue
$0.30B
+12.0%
Devices and players
$0.56B
+5.0%
The products that matter
advertising and distribution platform
Platform Segment
$1.06B last quarter · 88% of revenue
this was $1.06B in the latest quarter and 88% of total revenue. if Roku works as an investment, this is why.
the engine
streaming players and hardware
Player Segment
~$0.15B last quarter · 12% of revenue
the remaining 12% of the latest quarter came from players. it is smaller, but it helps put more Roku software in living rooms.
front door
self-serve advertising tools
Ads Manager
90% of advertisers were new to Roku
90% of advertisers using the self-service platform in the quarter were new to Roku. that's the kind of funnel stat you watch if you think ad monetization still has room to scale.
expansion bet
Key numbers
89.8M
streaming households
That is Roku's audience base. More households mean more ad inventory and more leverage with streaming partners.
127.1B
hours streamed
Time is the real product here. If viewers keep spending hours on Roku, advertisers keep showing up.
370.8x
trailing p/e
P/E → price relative to earnings → so what: you are paying a luxury multiple for a business still near break-even.
$4.7B
annual revenue
Revenue grew 15.2% vs. prior year, which says demand is real even if profits are still catching up.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 4 — safer than 20% of stocks
- price stability 5 / 100
- net profit margin 2.2% — keeps 2 cents of every dollar in revenue
- return on equity 4% — $0.04 profit for every $1 investors have put in
B — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ROKU 3 years ago → it's now worth $27,430.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Roku's last report beat hard, with EPS of $0.53 versus a $0.26 estimate.
Revenue was $4.7B for the trailing year, up 15.2%. The latest September quarter also showed platform revenue up 17% to $1.06B, which is where the real business lives.
$4.7B
revenue
$0.53
eps
43.9%
gross margin
platform share
The key number was 88%: that was platform's share of quarterly revenue, which tells you Roku is increasingly an ad and distribution business, not a box seller.
-
during the september interim, the entertainment streaming platform reported total revenue of $1.21 billion, a 14% increase over the year-ago period.
-
top-line growth was largely driven by the platform segment, which rose 17%, to $1.06 billion.results in this segment were driven by increased ad demand and growth in subscription revenue, which ought to continue in 2026. on the advertising side, roku deepened its partnerships with major demand-side platforms (dsps), including a new integration with amazon dsp, which is expected to ramp up in 2026. roku also focused on improving ad measurement and performance, launching initiatives like integration with appsflyer and expanding its ads manager platform for small and medium-sized businesses.
-
this self-service platform has been growing rapidly, with 90% of advertisers in the quarter being new to roku.additionally, roku’s subscription business, particularly premium subscriptions, has been growing nicely. roku improved the user experience for premium subscriptions and launched new services, with plans to add more to the lineup this year. roku also introduced its own subscription video-on-demand service, which targets untapped markets and is expected to grow over time.
-
we expect the platform segment (which accounted for 88% of third-quarter revenue) to further benefit from roku’s focus on advertising and subscriptions this year.
-
a new home screen is set to roll out in 2026, and should unlock more revenue opportunities.the updated home screen (the starting point for every roku user’s viewing experience) is expected to drive monetization by helping users discover more ad-sponsored content and sign up for premium subscriptions, both of which are key revenue streams.
source: company earnings report, 2026
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What could go wrong
the #1 risk is connected-tv ad demand slowing before Roku's margins scale.
med
ad market slowdown
Platform generated $1.06B last quarter and made up 88% of revenue. if advertisers pull back, the core monetization engine takes the hit first.
this is the main exposure because Roku is increasingly an ad platform wearing a hardware costume.
med
amazon, google, and apple keep the pressure on
Roku is competing against larger ecosystems for streaming distribution, default placement, and ad budgets. bigger rivals can afford to subsidize hardware and bundle services.
when your net margin is 2.1%, you do not have much room to win a pricing war.
med
thin profitability leaves little cushion
Roku produced a 10.0% operating margin but only a 2.1% net margin on $4.7B of annual revenue. that gap tells you expenses still eat a lot of the scale story.
if revenue growth cools before margins widen, the valuation looks much harder to defend.
med
player supply and component dependence
management still relies on hardware to seed the ecosystem, and the filing risk around sole-source components has not gone away.
hardware is only the smaller piece of revenue, but disruptions can still slow account growth at the front door.
the combined risk picture is simple: 88% of the latest quarter came from Platform, but the company still keeps only 2.1 cents on each $1 of annual revenue. that is not much margin for error.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next quarterly Platform mix
if Platform stays near or above 88% of revenue, the higher-quality part of the business keeps taking over.
metric
Platform growth versus company growth
last quarter it was 17% for Platform against 14% for total revenue. you want that spread to stay positive.
trend
amazon dsp and ads manager ramp
the 2026 ad-tool rollout matters because 90% of advertisers in the quarter were new to Roku. that funnel needs to convert into durable spend.
risk
margin follow-through
quarterly margin was 1.9% and annual net margin was 2.1%. if monetization improves but profits do not, the story stays incomplete.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think this can lag from here.
risk profile
below average
stability score 4 — more volatile than most stocks, so you should expect wider swings.
chart momentum
average
technical score 3 — no big signal from the chart. the business update matters more than the tape.
earnings predictability
10 / 100
earnings predictability is weak. translation: this company still surprises people, often in both directions.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 320 buyers vs. 237 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$38
$149
$111
current price
$94
target midpoint · 15% from current · 3-5yr high: $149
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