1173 Coleman AveSan JoseCalifornia0001428439FALSE00014284392024-10-302024-10-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 2024
Roku, Inc.
(Exact name of Registrant as Specified in Its Charter)
Delaware001-3821126-2087865
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
   
1173 Coleman Ave
San Jose, California
 95110
(Address of Principal Executive Offices) (Zip Code)
(408) 556-9040
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:
 
Trading Symbol(s):Name of Exchange on Which Registered:
Class A Common Stock, $0.0001 par valueROKUThe Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02    Results of Operations and Financial Condition.
On October 30, 2024, Roku, Inc. (the “Company”) announced its financial results for the quarter ended September 30, 2024. The Company’s Shareholder Letter, which is attached hereto as Exhibit 99.1, is incorporated herein by reference.
The information in this report shall not be treated as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933 or the Securities Exchange Act of 1934, except as expressly stated by specific reference in such filing.

Item 9.01    Financial Statements and Exhibits.
(d)Exhibits.
  
Exhibit NumberDescription
99.1*
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
*This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities and Exchange Act of 1934.


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 Roku, Inc.
 
Dated: October 30, 2024
 
 By:/s/ Dan Jedda
  Dan Jedda
  Chief Financial Officer

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Exhibit 99.1
Fellow Shareholders,
October 30, 2024
We delivered strong results in Q3, our first quarter of more than $1 billion in Total net revenue, with Platform revenue up 15% YoY. We achieved our fifth straight quarter of positive Adjusted EBITDA and Free Cash Flow (TTM), and we also grew Streaming Hours on The Roku Channel 80% YoY. With our intuitive Home Screen and UI (user interface), our viewers can easily find what to watch; our content partners can attract, engage, and retain audiences; and our advertisers can reach consumers and grow their businesses. As we look forward, we remain focused on growing Platform revenue. Our key initiatives include innovating our Home Screen to expand monetization, growing ad demand through deeper third-party platform integrations, and growing Roku-billed subscriptions.
Q3 2024 Key Results
•Total net revenue was $1.062 billion, up 16% year over year (YoY)
•Platform revenue was $908 million, up 15% YoY
•Gross profit was $480 million, up 30% YoY; up 10% YoY excluding Q3 2023 restructuring charges1
•Streaming Households were 85.5 million, a net increase of 2.0 million from Q2 2024
•Streaming Hours were 32.0 billion, up 5.3 billion hours YoY
•Average Revenue Per User (ARPU) was $41.10 on a trailing 12-month basis (TTM), flat YoY
•Fifth consecutive quarter of positive Adjusted EBITDA and Free Cash Flow (TTM)
Key Performance MetricsQ3 23Q4 23Q1 24Q2 24Q3 24YoY %
Streaming Households (millions)75.8 80.0 81.6 83.6 85.5 13 %
Streaming Hours (billions)26.7 29.1 30.8 30.1 32.0 20 %
ARPU ($ TTM)$41.03 $39.92 $40.65 $40.68 $41.10 0 %
Summary Financials ($ in millions)Q3 23Q4 23Q1 24Q2 24Q3 24YoY %
Platform revenue$786.8 $828.9 $754.9 $824.3 $908.2 15 %
Devices revenue125.2 155.6 126.5 143.8 154.0 23 %
Total net revenue912.0 984.4 881.5 968.2 1,062.2 16 %
Platform gross profit378.2 458.5 394.4 439.9 491.8 30 %
Devices gross profit (loss)(9.4)(20.5)(6.1)(15.2)(11.7)(24)%
Total gross profit368.8 437.9 388.3 424.7 480.1 30 %
Platform gross margin %48.1 %55.3 %52.2 %53.4 %54.2 %6.1 pts
Devices gross margin %(7.5)%(13.2)%(4.8)%(10.6)%(7.6)%(0.1)pts
Total gross margin %40.4 %44.5 %44.1 %43.9 %45.2 %4.8 pts
Research and development282.2 183.8 180.5 175.5 178.8 (37)%
Sales and marketing307.7 264.6 202.1 221.7 237.0 (23)%
General and administrative128.7 93.7 77.7 98.8 100.0 (22)%
Total operating expenses718.6 542.1 460.3 495.9 515.8 (28)%
Loss from operations(349.8)(104.2)(72.0)(71.2)(35.8)90 %
Adjusted EBITDA A
43.4 47.7 40.9 43.6 98.2 126 %
Adjusted EBITDA margin %4.8 %4.8 %4.6 %4.5 %9.2 %4.5 pts
Cash flow from operations (TTM)246.9255.9456.0332.3155.1(37)%
Free Cash Flow (TTM) A
100.8175.9426.8317.9157.356 %
Outlook ($ in millions)Q4 2024E
A - Refer to the reconciliation of Net loss to Adjusted EBITDA and Cash flow from operations to Free Cash Flow in the non-GAAP information at the end of this Letter.
Total net revenue$1,140 
Total gross profit$465 
B - Q4 2024E reconciling items between net loss and non-GAAP Adjusted EBITDA consist of stock-based compensation of approx. $100 million, depreciation and amortization of approx. $15 million, and other income of approx. $20 million.
Net income (loss)$(65)
Adjusted EBITDA B
$30 
1 Refer to the Reconciliation of Gross Profit to Non-GAAP Gross Profit in the Non-GAAP information at the end of this Letter.
Roku Q3 2024 Shareholder Letter
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Market-Leading Devices
Roku continues to benefit from our devices’ simplicity, value, and delight. The Roku operating system (OS) has been the #1 selling TV OS in the U.S. for more than five years. In Q3, sales of TV units powered by the Roku OS were greater than those of the #2 and #3 selling TV operating systems combined2. The Roku OS was also the #1 selling TV OS in Mexico and Canada,3 where we continue to grow scale. We have broad retail distribution of Roku streaming devices, including Roku-branded TVs, which are available from popular national retailers such as Amazon, Best Buy, Sam’s Club, Target, and Walmart.
Our world-class teams are always working to improve the streaming experience our devices deliver. In September, we launched our most powerful streaming player to date: the 2024 Roku Ultra. This premium streaming player comes bundled with the Voice Remote Pro (2nd edition), our most advanced remote. Tom’s Guide said, “From the new backlit buttons to being able to charge via USB-C, Roku’s latest remote is now almost perfect.”4 The 2024 Roku Ultra has a new quad core processor that delivers 30% faster performance, quicker streaming app launches, and upgraded Wi-Fi 6 radio architecture. CNET referred to the new Ultra as “undoubtedly the best Roku yet.”5
Driving Viewer Engagement  
Globally, our users streamed 32.0 billion hours in Q3, up 20% YoY. We also grew engagement per household globally, with average Streaming Hours per Streaming Household per day of 4.1 hours in Q3 2024, up from 3.9 hours in Q3 2023. On traditional TV, average viewing time per U.S. household per day was 7.0 hours (Nielsen), highlighting the significant opportunity for us to continue to grow our engagement.
Viewer Experience
The Roku experience begins with our Home Screen. Its powerful position as the lead-in to TV drives engagement that benefits our viewers, content partners, advertisers, and therefore Roku.
For example, the Roku Sports Zone is a feature on our Home Screen that aggregates and organizes sports programming across our platform into a single destination. As Q3 was a busy season for sports fans, we worked to make finding what games to watch easier for them. Within the Roku Sports Zone, we created designated zones for the MLB, the Olympics, and the NFL. We also surfaced events in our UI outside of the Sports Zone in features like What to Watch. In Q3, households that started streaming from one of these Sports Zone features increased 68% QoQ, and the number of Streaming Hours attributed to these features doubled QoQ.
In September, the popular NFL Zone returned to Roku timed for the kickoff of the 2024-25 season, creating a valuable opportunity for advertisers to activate their brand within the NFL Zone. Viewers can once again find where to watch live and upcoming NFL games, League highlights, and other great NFL content – all from a single destination. This is particularly useful for fans to discover where to stream their favorite teams across direct-to-consumer, TVE apps, and NFL+, the League’s direct-to-consumer service. Similar to the Olympics, the NFL Zone had prominent placement in our Home Screen Menu for the first time to further highlight the NFL Zone for fans.
2 Source: Circana, LLC, Retail Tracking Service, US, TV, Software Service, Unit Sales, January 2019 – September 2024 and Q3 2024
3 Source: Circana, LLC, Retail Tracking Service, TV, Software Service, Unit Sales, 3 Months Ending September 2024
4 Tom’s Guide
5 CNET
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The Olympics and NFL Kickoff Weekend highlighted in the Roku Home Screen Menu for the first time
The Roku Channel
In Q3, The Roku Channel was the #3 app on our platform by both reach and engagement for the third straight quarter, with Streaming Hours up 80% YoY. Additionally, The Roku Channel hit an all-time high on Nielsen’s The Gauge™ ranking for August, representing 4.1% of all TV streaming time in the U.S.6 Our position as the lead-in to TV continues to drive significant growth.
Our audience turns to The Roku Channel for both its vast on-demand and linear options as well as live events, like sports and news. We continue to expand our offering, while making it easy for viewers to find the programming they are looking for. In August, we launched the Roku Sports Channel, our always-on FAST channel that leads viewers through the wide variety of free sports content available on The Roku Channel. We also expanded our talk series offerings on The Roku Channel, with the addition of Good Morning Football: Overtime, a new extension series of NFL Network’s long-running Good Morning Football.
6 Nielsen The Gauge™, August 2024
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The Roku Sports Channel leads viewers through free sports content available
on The Roku Channel, including MLB Sunday Leadoff games.
As they do with sports, viewers are streaming more news programming as they cut the cord. During the U.S. presidential debate on June 27, The Roku Channel’s FAST offering achieved its highest day for both reach and engagement. For the U.S. presidential debate on September 10, we made it easy for viewers to find the debate by highlighting it on our Home Screen in the Spotlight Ad and in the Content Row. During the debate, more than half of Roku Channel viewers in the U.S. watched on one of the live channels.

We offer our audience a broad variety of free sports, news, and entertainment on The Roku Channel. We recently expanded our partnership with Disney to include new FAST channels for Extreme Makeover: Home Edition, Nat Geo Sharks, Wicked Tuna, and ESPN the Ocho (US). We also launched over 70 FAST channels from Paramount, which includes programming for younger audiences like The Jersey Shore Channel and The Challenge Channel.

The Roku Channel also provides free original programming from Roku. In addition to providing exclusive content for viewers, Roku Originals create opportunities for brands to integrate into original storytelling, connecting with consumers through content that is relevant to the advertiser’s products. This is deeply immersive and valued by TV ad buyers accustomed to buying ads against specific content. For example, Ally Bank wanted to increase favorability and consideration for its services. In partnership with Reese Witherspoon’s Hello Sunshine, we worked with Ally to create Side Hustlers, a series about the unique challenges women face when starting their own businesses. In doing so Ally aligned its brand with messages of financial empowerment and well-being. The show drove a significant lift in brand favorability and program viewership increased the likelihood a viewer would open an Ally account7.


7 Sampled over 600 people ages 25-54 to compare those who viewed Side Hustlers vs. those who didn’t
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Ally partnered with Roku and Hello Sunshine
to reach women with messages of financial empowerment.
Growing Monetization
We generate Platform revenue primarily from the sale of advertising (including direct and programmatic video advertising, ads integrated into our UI, sponsorships, and related ad products and services), as well as streaming services distribution (including subscription and transactional revenue, the sale of Premium Subscriptions, and the sale of branded app buttons on remote controls).
In Q3, we grew Platform revenue to $908 million, with Platform gross margin of 54%, which is up 80 basis points QoQ. While Platform revenue was up 15% YoY, ARPU of $41.10 (TTM) was relatively flat YoY. This reflects an increasing share of Streaming Households in international markets, where we are currently focused on scale and engagement. Additionally, each country is at a different stage of monetization, and each has different economic characteristics. For example, Mexico is one of our fastest growing countries, and we have significant penetration of broadband households. However, we are in the early stages of monetization, and our ARPU in Mexico is currently a fraction of our ARPU in the U.S.
Streaming Services Distribution
In Q3, streaming services distribution activities grew faster than Platform revenue overall, due primarily to price increases for subscription-based services on our platform. We continue to focus on growing the share of subscriptions billed through Roku Pay, our payments and billing service that makes it easy for both our viewers and content partners to transact subscriptions. In the NBC Olympic Zone, viewers could use Roku Pay to subscribe to Peacock – an easy way to begin watching the games immediately. The NBC Olympic Zone helped to drive Peacock sign-ups, and a significant portion were first-time subscribers8.
Advertising
In Q3, the YoY growth of advertising activities across the Roku platform – excluding M&E (media & entertainment) – outperformed both the overall ad market and the OTT ad market in the U.S.9 The YoY growth of Political, Retail, and Consumer Packaged Goods ad verticals, among others, were up on the Roku platform, while the M&E and Health & Wellness ad verticals were pressured. Due to our many growth initiatives and focused efforts to diversify ad demand, M&E is a significantly smaller percentage of our overall Platform business now versus the last several years.

We continue to leverage the power of our Home Screen to grow monetization and diversify revenue across ad verticals. The NBC Olympic Zone, featured on our Home Screen, was sponsored by leading brands across a diverse
8 Users that had been exposed to the Zone and then signed-up for a subscription within 3 days of the exposure
9 3Q24 SMI data; OTT: over-the-top
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array of verticals including Retail, Transportation, Telecom, and Auto. In September, we partnered with the Television Academy to present The Emmys Collection, a dedicated destination for Emmy-nominated and winning titles. The collection was sponsored by a large specialty beauty retailer in the U.S. These viewer destinations drive engagement while broadening the sponsorship portfolio we offer to advertisers. As a result, ad spend on our Home Screen from non-M&E brands has grown in each of the last three quarters.
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The Emmys Collection, a dedicated destination for nominated and winning titles
We continue to drive new sources of ad demand. In Q3, we expanded our ad offering to better serve small and medium-sized businesses (SMBs). Roku Ads Manager is our new, self-service CTV advertising solution, providing performance features like advanced targeting, conversion optimization and measurement, and even shoppable ad formats. This solution builds upon our growing list of ad offerings that provide advertisers more choices for how they buy Roku Media – whether it be through direct IO (insertion order), a preferred DSP (demand-side platform) partner, or now through self service. This allows us to serve a diverse array of advertisers, across verticals and business-sizes, from SMBs to enterprise companies.

We also continue to deepen our relationships with third-party platforms to better serve advertisers’ programmatic needs. We have partnered with The Trade Desk (TTD) so that TTD customers can leverage Roku Media and audience data programmatically, and we have integrated Unified ID 2.0, TTD’s identity solution. This represents our deepest integration to date with a third-party DSP, and we are beginning to see positive impacts. We’ll continue to do more integrations that expand our ability to serve the entire demand curve at multiple price points and in doing so, we expect to drive incremental revenue over time.

Key Performance Metric Update
Since our IPO in 2017, the streaming industry has evolved meaningfully, with Americans now spending significantly more TV time streaming than watching cable10. Our business has also grown and evolved, and we are now primarily focused on growing Platform revenue and profitability. As a result, we will be updating our Key Performance Metrics (KPMs) to better align with these priorities.

Beginning with our Q1 2025 earnings results, we will no longer report quarterly updates on Streaming Households and, by extension, ARPU. Our KPMs will be Streaming Hours, Platform revenue, Adjusted EBITDA, and Free Cash Flow, and we remain committed to growing all these metrics over time.
10 Nielsen The Gauge™, September 2024
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As noted earlier in this Letter, our various markets are in different stages of monetization and have different economics. While a large portion of our Streaming Household growth is in our international markets, the majority of our Platform revenue is currently generated in the U.S. Therefore, as we continue to grow internationally, Streaming Household growth is not representative of Platform revenue growth.

We expect to continue to grow Streaming Households in all our locations, including the U.S. We will provide updates on our scale as we achieve certain milestones, such as 100 million Streaming Households, which we expect to reach in the next 12-18 months.

Outlook
We are pleased with the execution of our monetization initiatives. We expect these initiatives, including the early positive impacts from our deeper integration with The Trade Desk, along with tailwinds from Political ad spend to continue in Q4. We estimate Q4 Total net revenue of $1.140 billion growing 16% YoY, with Platform revenue growing 14% YoY and Devices revenue growing 25% YoY. We estimate Q4 Total gross profit of $465 million and Adjusted EBITDA of $30 million. We expect Sales and Marketing to be more seasonal this year than in the prior year. As a result, we expect OpEx to be up 9% YoY in Q4. However, Sales and Marketing and total OpEX will be slightly down for the full year 2024, reflecting our ongoing operational discipline. Our expectations for both Q4 and 2024 OpEx YoY growth rates exclude one-time restructuring charges from 2023.

We remain confident in our ability to grow Platform revenue in 2025 and beyond as we grow ad demand, lean into our Home Screen as the lead-in for TV, and grow Roku-billed subscriptions.

Thank you for your support, and Happy Streaming™!
Anthony Wood, Founder and CEO, and Dan Jedda, CFO
Conference Call Webcast – Oct. 30, 2024, at 2 p.m. PT
The Company will host a webcast of its conference call to discuss the Q3 2024 results at 2 p.m. Pacific Time / 5 p.m. Eastern Time on Oct. 30, 2024. Participants may access the live webcast in listen-only mode on the Roku investor relations website at www.roku.com/investor. An archived webcast of the conference call will also be available at www.roku.com/investor after the call.
About Roku, Inc.
Roku pioneered streaming on TV. We connect users to the content they love, enable content publishers to build and monetize large audiences, and provide advertisers with unique capabilities to engage consumers. Roku TV™ models, Roku streaming players, and TV-related audio devices are available in various countries around the world through direct retail sales and/or licensing arrangements with TV OEM brands. Roku-branded TVs and Roku Smart Home products are sold exclusively in the United States. Roku also operates The Roku Channel, the home of free and premium entertainment with exclusive access to Roku Originals. The Roku Channel is available in the United States, Canada, Mexico, and the United Kingdom. Roku is headquartered in San Jose, Calif., U.S.A.
Roku, Roku TV, Happy Streaming, the Roku logo and other trade names, trademarks or service marks of Roku appearing in this shareholder letter are the property of Roku. Trade names, trademarks and service marks of other companies appearing in this shareholder letter are the property of their respective holders. This shareholder letter includes several citations to website addresses. The information on these websites is not incorporated by reference.
Investor Relations
Conrad Grodd
cgrodd@roku.com
Media
Jack Evans
jackevans@roku.com

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Use of Non-GAAP Measures
In addition to financial information prepared in accordance with generally accepted accounting principles in the United States (GAAP), this shareholder letter includes certain non-GAAP financial measures. These non-GAAP measures include Adjusted EBITDA and Free Cash Flow (FCF). In order for our investors to be better able to compare our current results with those of previous periods, we have included a reconciliation of GAAP to non-GAAP financial measures in the tables at the end of this letter. The Adjusted EBITDA reconciliation excludes other income (expense), net, stock-based compensation expense, depreciation and amortization, restructuring charges, and income tax (benefit)/expense from net income (loss), and the FCF reconciliation excludes purchases of property and equipment and effects of exchange rates on cash from the cash flows from operating activities, in each case where applicable. We believe these non-GAAP financial measures are useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, these non-GAAP financial measures have limitations, and should not be considered in isolation or as a substitute for our GAAP financial information, such as GAAP net income (loss) and cash flows from operating activities. In addition, these non-GAAP financial measures may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.
Forward-Looking Statements
This shareholder letter contains “forward-looking” statements within the meaning of the federal securities laws. Statements contained herein that are not historical facts are considered forward-looking statements and can be identified by terms such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “may,” "plan,” “seek,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Such forward-looking statements are based on our current beliefs, assumptions and information available to us and involve known and unknown risks, uncertainties and other factors that may cause our actual results to be materially different from any future results expressed or implied by the forward-looking statements. These statements include those related to the features, benefits and opportunities of the Roku Home Screen and UI; the growth of our scale and engagement and corresponding platform revenue growth; the breadth of our retail distribution; our international expansion; the benefits of the Roku Sports Zone; The Roku Channel’s growth and expanded entertainment offering; our ability to grow subscriptions billed through Roku Pay; diversifying the Home Screen beyond M&E; our expanding ad offering; our relationships with third-party advertising platforms; the growth of our ad revenue; our operational discipline; our execution of monetization initiatives; our use of KPMs; our financial outlook for the fourth quarter of 2024 and full year 2024; our additional qualitative color on our business for 2025 and beyond; and our overall business trajectory. Important risks and factors related to such statements are contained in the reports we have filed with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update these forward-looking statements as the result of new information, future events or otherwise.
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ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Net Revenue:
Platform$908,175 $786,785 $2,487,443 $2,165,238 
Devices154,028 125,233 424,408 334,956 
Total net revenue1,062,203 912,018 2,911,851 2,500,194 
Cost of Revenue:
Platform (1)416,396 408,554 1,161,416 1,057,151 
Devices (1)165,732 134,641 457,369 358,352 
Total cost of revenue582,128 543,195 1,618,785 1,415,503 
Gross Profit (Loss):
Platform491,779 378,231 1,326,027 1,108,087 
Devices(11,704)(9,408)(32,961)(23,396)
Total gross profit480,075 368,823 1,293,066 1,084,691 
Operating Expenses:
Research and development (1)178,798 282,201 534,738 694,673 
Sales and marketing (1)237,047 307,694 660,827 768,805 
General and administrative (1)99,993 128,717 276,543 309,422 
Total operating expenses515,838 718,612 1,472,108 1,772,900 
Loss from Operations(35,763)(349,789)(179,042)(688,209)
Other income, net30,880 22,902 84,955 65,317 
Loss Before Income Taxes(4,883)(326,887)(94,087)(622,892)
Income tax expense (benefit)4,147 3,184 (249)8,378 
Net Loss$(9,030)$(330,071)$(93,838)$(631,270)
Net loss per share — basic and diluted$(0.06)$(2.33)$(0.65)$(4.47)
Weighted-average common shares outstanding — basic and diluted144,862 141,877 144,319 141,087 

(1) Stock-based compensation was allocated as follows:
Cost of revenue, platform$366 $368 $1,062 $1,056 
Cost of revenue, devices163 810 1,201 2,426 
Research and development38,502 37,314 109,457 110,801 
Sales and marketing36,401 34,421 100,353 99,785 
General and administrative24,664 18,392 71,051 63,288 
Total stock-based compensation$100,096 $91,305 $283,124 $277,356 
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ROKU, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data)
(unaudited)
As of
September 30,
2024		December 31,
2023
Assets
Current Assets:
Cash and cash equivalents$2,126,974 $2,025,891 
Accounts receivable, net of allowances of $38,143 and $34,127 as of
729,911 816,337 
September 30, 2024 and December 31, 2023, respectively
Inventories191,213 92,129 
Prepaid expenses and other current assets138,332 138,585 
Total current assets3,186,430 3,072,942 
Property and equipment, net222,999 264,556 
Operating lease right-of-use assets314,326 371,444 
Content assets, net247,379 257,395 
Intangible assets, net31,026 41,753 
Goodwill161,519 161,519 
Other non-current assets139,737 92,183 
Total Assets$4,303,416 $4,261,792 
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable$327,038 $385,330 
Accrued liabilities820,165 788,040 
Deferred revenue, current portion93,405 102,157 
Total current liabilities1,240,608 1,275,527 
Deferred revenue, non-current portion23,267 24,572 
Operating lease liability, non-current portion535,378 586,174 
Other long-term liabilities43,653 49,186 
Total Liabilities1,842,906 1,935,459 
Stockholders’ Equity:
Common stock, $0.0001 par value15 14 
Additional paid-in capital3,851,967 3,623,747 
Accumulated other comprehensive income (loss)(47)159 
Accumulated deficit(1,391,425)(1,297,587)
Total stockholders’ equity2,460,510 2,326,333 
Total Liabilities and Stockholders’ Equity$4,303,416 $4,261,792 


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ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September 30, 2024September 30, 2023
Cash flows from operating activities:
Net Loss$(93,838)$(631,270)
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization47,629 53,047 
Stock-based compensation expense283,124 277,356 
Amortization of right-of-use assets35,674 45,137 
Amortization and write-off of content assets158,892 154,801 
Foreign currency remeasurement losses674 3,469 
Change in fair value of strategic investment in convertible promissory notes(6,978)(3,734)
Impairment of assets29,118 235,165 
Provision for doubtful accounts2,081 1,977 
Other items, net(2,224)(872)
Changes in operating assets and liabilities:
Accounts receivable83,828 38,416 
Inventories(99,084)1,373 
Prepaid expenses and other current assets(40,952)16,003 
Content assets and liabilities, net(141,345)(191,481)
Other non-current assets(19,996)5,448 
Accounts payable(57,937)174,784 
Accrued liabilities14,044 70,217 
Operating lease liabilities(45,766)(14,301)
Other long-term liabilities1,866 (910)
Deferred revenue(10,057)4,904 
Net cash provided by operating activities138,753 239,529 
Cash flows from investing activities:
Purchases of property and equipment(2,603)(79,099)
Purchase of strategic investments(20,000)(10,000)
Net cash used in investing activities(22,603)(89,099)
Cash flows from financing activities:
Repayments of borrowings— (80,000)
Issuance costs related to credit agreement(1,829)— 
Proceeds from equity issued under incentive plans8,981 14,699 
Taxes paid related to net share settlement of equity awards(63,884)— 
Net cash used in financing activities(56,732)(65,301)
Net increase in cash, cash equivalents and restricted cash59,418 85,129 
Effect of exchange rate changes on cash, cash equivalents and restricted cash2,774 (2,964)
Cash, cash equivalents and restricted cash —beginning of period2,066,604 1,961,956 
Cash, cash equivalents and restricted cash —end of period$2,128,796 $2,044,121 

Roku Q3 2024 Shareholder Letter
11
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Nine Months Ended
September 30, 2024September 30, 2023
Cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents$2,126,974 $2,003,408 
Restricted cash, current1,822 40,713 
Cash, cash equivalents and restricted cash —end of period$2,128,796 $2,044,121 
Supplemental disclosures of cash flow information:
Cash paid for interest$106 $886 
Cash paid for income taxes$13,235 $5,027 
Supplemental disclosures of non-cash investing and financing activities:
Unpaid portion of property and equipment purchases$169 $1,129 



Roku Q3 2024 Shareholder Letter
12
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NON-GAAP INFORMATION
(in thousands)
(unaudited)
Reconciliation of Net loss to Adjusted EBITDA:
Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Net Loss$(9,030)$(330,071)$(93,838)$(631,270)
Other income, net(30,880)(22,902)(84,955)(65,317)
Stock-based compensation100,096 91,305 283,124 277,356 
Depreciation and amortization15,349 18,866 47,629 53,047 
Restructuring charges (1)
18,521 283,048 30,999 314,364 
Income tax expense (benefit)4,147 3,184 (249)8,378 
Adjusted EBITDA$98,203 $43,430 $182,710 $(43,442)
(1) Restructuring charges for the three months ended September 30, 2024 primarily include asset impairment charges of $17.6 million. Restructuring charges for the nine months ended September 30, 2024 primarily include asset impairment charges of $29.1 million.
Restructuring charges for the three months ended September 30, 2023 include severance and related charges of $50.4 million, asset impairment charges of $230.8 million, and facilities exit costs of $1.9 million. Restructuring charges for the nine months ended September 30, 2023 include severance and related charges of $75.7 million, asset impairment charges of $235.2 million, and facilities exit costs of $3.5 million.
Reconciliation of Cash flow from operations to Free Cash Flow (TTM):
Q3 23Q4 23Q1 24Q2 24Q3 24
Net cash provided by operating activities$246,882 $255,856 $455,951 $332,304 $155,080 
Less: Purchases of property and equipment(144,477)(82,619)(29,048)(11,850)(6,123)
Add/(Less): Effect of exchange rate changes on cash, cash equivalents and restricted cash(1,599)2,654 (149)(2,537)8,392 
Free Cash Flow (TTM)$100,806 $175,891 $426,754 $317,917 $157,349 
Reconciliation of Gross Profit to Non-GAAP Gross Profit:
Three Months Ended
September 30, 2024September 30, 2023Change $Change %
Total gross profit$480,075 $368,823 $111,252 30 %
Restructuring charges in Total gross profit— 65,966 (65,966)nm
Non-GAAP Total gross profit$480,075 $434,789 $45,286 10 %
Non-GAAP Total gross margin %45.20 %47.67 %
Non-GAAP Total gross margin % change YoY (in bps)(250)
Roku Q3 2024 Shareholder Letter
13
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Reconciliation of Platform Gross Profit to Non-GAAP Platform Gross Profit:
Three Months Ended
September 30, 2024September 30, 2023Change $Change %
Platform gross profit$491,779 $378,231 $113,548 30 %
Restructuring charges in Cost of revenue, platform— 62,760 (62,760)nm
Non-GAAP Platform gross profit$491,779 $440,991 $50,788 12 %
Non-GAAP Platform gross margin %54.15 %56.05 %
Non-GAAP Platform gross margin % change YoY (in bps)(190)
Reconciliation of Devices Gross Loss to Non-GAAP Devices Gross Loss:
Three Months Ended
September 30, 2024September 30, 2023Change $Change %
Devices gross loss$(11,704)$(9,408)$(2,296)(24)%
Restructuring charges in Cost of revenue, devices— 3,206 (3,206)nm
Non-GAAP Devices gross loss$(11,704)$(6,202)$(5,502)(89)%
Non-GAAP Devices gross margin %(7.60)%(4.95)%
Non-GAAP Devices gross margin % change YoY (in bps)(260)


Roku Q3 2024 Shareholder Letter
14
v3.24.3
Cover
Oct. 30, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 30, 2024
Entity Registrant Name Roku, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-38211
Entity Tax Identification Number 26-2087865
Entity Address, Address Line One 1173 Coleman Ave
Entity Address, City or Town San Jose
Entity Address, State or Province CA
Entity Address, Postal Zip Code 95110
City Area Code 408
Local Phone Number 556-9040
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, $0.0001 par value
Trading Symbol ROKU
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001428439
Amendment Flag false
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