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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-38211
Roku, Inc.
(Exact name of registrant as specified in its charter)
Delaware26-2087865
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
1173 Coleman Avenue
San Jose, California 95110
(Address of principal executive offices including zip code)
Registrant’s telephone number, including area code: (408) 556-9040
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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☒Accelerated filer☐
Non-accelerated filer☐ Smaller reporting company☐
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of September 30, 2024, the registrant had 127,893,163 shares of Class A common stock, $0.0001 par value per share, and 17,306,064 shares of Class B common stock, $0.0001 par value per share, outstanding.

Table of Contents
  Page
PART I.
Item 1.
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
i
GLOSSARY OF SELECTED TERMS
As used in this Quarterly Report on Form 10-Q (“Quarterly Report”), unless the context otherwise requires, references to the following terms have the respective meaning as defined below.
Active Accounts: See Streaming Households.
Ad-supported Video on Demand (AVOD): Streaming content supported by advertising that does not charge a fee to the viewer.
Apps: Primarily refers to the direct-to-consumer streaming applications on the Roku platform (e.g., The Roku Channel or Netflix). We also use “apps” to refer to mobile applications (such as our Roku Smart Home app).
Average Revenue per User (ARPU): Platform revenue for the trailing four quarters divided by the average of the number of Streaming Households at the end of the current period and the end of the corresponding period in the prior year. See Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Key Performance Metrics and Non-GAAP Measure, in this Quarterly Report for additional detail.
DSP: A demand-side platform (such as Roku’s OneView ad-buying platform), which allows buyers of digital advertising inventory to manage multiple ad exchange and data exchange accounts across multiple platforms through one interface.
FAST: Free, ad-supported linear streaming TV, which does not include on-demand content.
Licensed Roku TV partners: TV original equipment manufacturers (“OEMs”) that license the Roku OS and leverage our smart TV reference designs to build TVs.
Linear TV: A TV format that provides programming at specifically scheduled times.
Premium Subscriptions: Subscription-based streaming services from content partners (e.g., Paramount) offered through The Roku Channel.
Roku-branded TVs: TVs powered by the Roku OS that are designed, made, and sold by Roku. Roku-branded TVs include the Roku Select, Roku Plus, and Roku Pro Series TVs.
Roku Home Screen: The first screen the viewer sees when they begin streaming with a Roku streaming device. The viewer is also returned to the home screen by pressing the home button on the Roku remote or when exiting apps.
Roku Home Screen Menu: The left-hand navigation bar on the Roku Home Screen.
Roku Originals: Original content programming created by Roku.
Roku OS: Roku operating system that is purpose built for TV and powers Roku streaming devices.
Roku Pay: Our billing service that enables Streaming Households to place a method of payment on file that can be used to make purchases on the Roku platform without having to re-enter their payment information. It also enables users to sign up for certain subscription-based streaming services (including Premium Subscriptions).
Roku TV models: TVs powered by the Roku OS that are made and sold by our licensed Roku TV partners.
Streaming: The distribution of video, music, or other media content via the internet.
Streaming device: Any device that enables streaming. For Roku, this encompasses Roku streaming players, Roku TV models, and Roku-branded TVs.
Streaming Hours: The aggregate amount of time streaming devices stream content on Roku’s streaming platform in a given period. See Part 1, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Key Performance Metrics and Non-GAAP Measure, in this Quarterly Report for additional detail.
Streaming Households (previously Active Accounts): The number of distinct user accounts that have streamed content on our platform within the last 30 days of the period. Previously, we referred to “Streaming Households” as “Active Accounts.” While we have changed this term to better reflect the nature of our business, we calculate it using the same methodology that we used to calculate “Active Accounts.” See Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Key Performance Metrics and Non-GAAP Measure, in this Quarterly Report for additional detail.
Streaming platform: The technology that delivers the viewer experience and streaming apps (e.g., The Roku Channel and Netflix) over an internet connection to a user’s TV.
Streaming players: A device that connects to a TV via an HDMI connection to enable streaming to the TV (such as the Roku Express, Roku Express 4K, Roku Streaming Stick 4K, Roku Ultra, Roku Streambar, and Roku Streambar Pro).
Smart TV: A television that is connected to the internet through an operating system (e.g., the Roku OS).
Subscription Video on Demand (SVOD): Streaming content that is available on demand, requires a paid subscription, and can be ad-supported or ad-free.
TV streaming: The act of streaming content over the internet on a TV.
The Roku Channel: Roku’s owned and operated streaming service. The Roku Channel aggregates three types of content—AVOD, FAST, and Premium Subscriptions—within The Roku Channel app and through viewing experiences integrated throughout the Roku platform (e.g., Live TV on the Roku Home Screen Menu).
ii
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts in this Quarterly Report, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “design,” “developing,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “should,” “will,” “would,” “target,” or the negative of these terms or other similar expressions. We caution you that the foregoing may not encompass all of the forward-looking statements made in this Quarterly Report.
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties, and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this Quarterly Report, regarding, among other things:
•our financial performance, including our revenue, cost of revenue, operating expenses, profitability, and our key performance metrics (including Streaming Households, Streaming Hours, ARPU, and Free Cash Flow);
•the impact of macroeconomic conditions, uncertainties, and geopolitical conflicts on our business, operations, and the markets and communities in which we and our advertisers, content partners, licensed Roku TV partners, other device licensees, manufacturers, suppliers, retailers, and viewers operate;
•our ability to attract and retain viewers and increase Streaming Hours;
•our ability to attract and retain advertisers that purchase video ad inventory in The Roku Channel, other video ad inventory on our platform that we acquire through our streaming services distribution agreements, and native display ads on the Roku Home Screen and screen saver;
•our ability to attract and retain TV brands, manufacturing partners, and service operators to license and deploy our technology;
•our ability to produce or acquire rights to distribute popular content on our streaming platform on favorable terms, or at all, including the renewals of our existing agreements with content partners;
•changes in TV viewing habits and the growth of TV streaming;
•the growth of our relevant markets, including the growth in advertising spend on TV streaming platforms, and our ability to successfully grow our business in those markets;
•our ability to adapt to changing market conditions and technological developments;
•our ability to develop and launch new products and provide ancillary services and support;
•our ability to integrate acquired businesses, products, and technologies;
•our ability to expand our products and services into adjacent markets, scale our operations in these markets, and do so profitably over time;
•our ability to compete effectively with existing competitors and new market entrants;
•our ability to successfully manage domestic and international expansion;
•our ability to attract and retain qualified employees and key personnel;
•our ability to address potential and actual cybersecurity incidents and system failures involving our products, systems, and operations;
•our ability to maintain, protect, and enhance our intellectual property;
•our ability to obtain financing on favorable terms, or at all;
•our ability to manage the selling prices of our products to increase Streaming Households; and
•our ability to comply with laws and regulations that currently apply or may become applicable to our business both in the United States and internationally, including compliance with privacy and data protection regulations.
Other sections of this Quarterly Report may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report or to conform these statements to actual results or to changes in our expectations. You should read this Quarterly Report, and the documents referenced in and filed as exhibits to this Quarterly Report, with the understanding that our actual future results, levels of activity, performance, and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (roku.com/investor), our blog (roku.com/blog), U.S. Securities and Exchange Commission (“SEC”) filings, webcasts, press releases, and conference calls. We use these mediums to communicate with investors and the general public about our company, our products and services, and other issues. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors, the media, and others interested in our company to review the information that we post on our investor relations website. Roku, the Roku logo, and other trade names, trademarks, or service marks of Roku appearing in this report are the property of Roku. Trade names, trademarks, and service marks of other companies appearing in this report are the property of their respective holders.
iii
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
ROKU, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data)
(unaudited)
 As of
 September 30, 2024December 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 
Commitments and contingencies (Note 12)
Stockholders’ Equity:
Common stock, $0.0001 par value
15 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 
See accompanying Notes to Condensed Consolidated Financial Statements.
1
ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 Three Months Ended Nine Months Ended
 September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Net Revenue:
Platform$908,175 $786,785 $2,487,443 $2,165,238 
Devices154,028 125,233 424,408 334,956 
Total net revenue1,062,203 912,018 2,911,851 2,500,194 
Cost of Revenue:
Platform416,396 408,554 1,161,416 1,057,151 
Devices165,732 134,641 457,369 358,352 
Total cost of revenue582,128 543,195 1,618,785 1,415,503 
Gross Profit (Loss):
Platform491,779 378,231 1,326,027 1,108,087 
Devices(11,704)(9,408)(32,961)(23,396)
Total gross profit480,075 368,823 1,293,066 1,084,691 
Operating Expenses:
Research and development178,798 282,201 534,738 694,673 
Sales and marketing237,047 307,694 660,827 768,805 
General and administrative99,993 128,717 276,543 309,422 
Total operating expenses515,838 718,612 1,472,108 1,772,900 
Loss from Operations(35,763)(349,789)(179,042)(688,209)
Other income, net30,880 22,902 84,955 65,317 
Loss Before Income Taxes(4,883)(326,887)(94,087)(622,892)
Income tax expense (benefit)4,147 3,184 (249)8,378 
Net Loss$(9,030)$(330,071)$(93,838)$(631,270)
Net loss per share — basic and diluted$(0.06)$(2.33)$(0.65)$(4.47)
Weighted-average common shares outstanding — basic and diluted144,862141,877144,319 141,087 
See accompanying Notes to Condensed Consolidated Financial Statements.
2
ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)
Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Net Loss$(9,030)$(330,071)$(93,838)$(631,270)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment614 (237)(206)126 
Comprehensive Loss$(8,416)$(330,308)$(94,044)$(631,144)
See accompanying Notes to Condensed Consolidated Financial Statements.
3
ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
 Common Stock
Additional
Paid-in Capital
Accumulated
Other Comprehensive
Income (Loss)		Accumulated
Deficit 		Total
Stockholders’
Equity
Three Months Ended September 30, 2024SharesAmount
Balance—June 30, 2024144,689 $14 $3,773,831 $(661)$(1,382,395)$2,390,789 
Issuance of common stock pursuant to equity incentive plans852 1 301 — — 302 
Stock-based compensation expense— — 100,096 — — 100,096 
Shares withheld for taxes related to net share settlement of equity awards(342)— (22,261)— — (22,261)
Foreign currency translation adjustment— — — 614 — 614 
Net loss— — — — (9,030)(9,030)
Balance—September 30, 2024145,199 $15 $3,851,967 $(47)$(1,391,425)$2,460,510 
Nine Months Ended September 30, 2024
Balance—December 31, 2023143,502 $14 $3,623,747 $159 $(1,297,587)$2,326,333 
Issuance of common stock pursuant to equity incentive plans2,724 1 8,980 — — 8,981 
Stock-based compensation expense— — 283,124 — — 283,124 
Shares withheld for taxes related to net share settlement of equity awards(1,027)— (63,884)— — (63,884)
Foreign currency translation adjustment— — — (206)— (206)
Net loss— — — — (93,838)(93,838)
Balance—September 30, 2024145,199 $15 $3,851,967 $(47)$(1,391,425)$2,460,510 
 Common Stock
Additional
Paid-in Capital
Accumulated
Other Comprehensive
Income (Loss)		Accumulated
Deficit		Total
Stockholders’
Equity
Three Months Ended September 30, 2023SharesAmount
Balance—June 30, 2023141,508 $14 $3,422,415 $71 $(889,225)$2,533,275 
Issuance of common stock pursuant to equity incentive plans988 — 13,195 — — 13,195 
Stock-based compensation expense— — 91,305 — — 91,305 
Foreign currency translation adjustment— — — (237)— (237)
Net loss— — — — (330,071)(330,071)
Balance—September 30, 2023142,496 $14 $3,526,915 $(166)$(1,219,296)$2,307,467 
Nine Months Ended September 30, 2023
Balance—December 31, 2022140,027 $14 $3,234,860 $(292)$(588,026)$2,646,556 
Issuance of common stock pursuant to equity incentive plans2,469 — 14,699 — — 14,699 
Stock-based compensation expense— — 277,356 — — 277,356 
Foreign currency translation adjustment— — — 126 — 126 
Net loss— — — — (631,270)(631,270)
Balance—September 30, 2023142,496 $14 $3,526,915 $(166)$(1,219,296)$2,307,467 
See accompanying Notes to Condensed Consolidated Financial Statements.
4
ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Nine Months Ended
 September 30, 2024September 30, 2023
Cash flows from operating activities:
Net Loss$(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 
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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 
See accompanying Notes to Condensed Consolidated Financial Statements.
6
ROKU, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. THE COMPANY
Organization and Description of Business
Roku, Inc. (the “Company” or “Roku”), was formed in October 2002 as Roku LLC under the laws of the State of Delaware. On February 1, 2008, Roku LLC was converted into Roku, Inc., a Delaware corporation. The Company operates in two reportable segments and generates platform revenue from the sale of digital advertising (including direct and programmatic video advertising, media and entertainment promotional spending, and related services) and streaming services distribution (including subscription and transaction revenue shares, the sale of Premium Subscriptions, and the sale of branded app buttons on remote controls). The Company generates devices revenue from the sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories as well as revenue from licensing arrangements with service operators.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 16, 2024 (the “Annual Report”).
The condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report. The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the operating results to be expected for the full year or any future periods.
Certain prior period amounts reported in our condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period presentation.
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses. Significant items subject to such estimates and assumptions include:
•revenue recognition: determining the nature and timing of satisfaction of performance obligations, variable consideration, determining the stand-alone selling prices of performance obligations, gross versus net revenue recognition, and evaluation of customer versus vendor relationships;
•the impairment of intangible assets;
•amortization and the impairment of content assets;
•the impairment of operating lease right-of-use assets and property and equipment;
•valuation of strategic investments (see Note 7);
•useful lives of tangible and intangible assets;
•allowances for sales returns and sales incentives; and
•the valuation of deferred income tax assets.
The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ from the Company’s estimates and assumptions.
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Principles of Consolidation
The condensed consolidated financial statements, which include the accounts of Roku, Inc. and its wholly-owned subsidiaries, have been prepared in conformity with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation.
Cash and Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist primarily of bank deposit accounts and investments in money market funds.
The Company’s restricted cash balance as of September 30, 2024 is $1.8 million and is included in Prepaid expenses and other current assets in the condensed consolidated balance sheets. It is used to secure certain outstanding letters of credit related to operating leases for office facilities.
The Company maintains its cash, cash equivalents, and restricted cash balances with high credit quality financial institutions and continuously monitors the amount of exposure to any one institution and diversifies as necessary in order to minimize its concentration risk. Such balances often exceed regulated insured limits.
Accounts Receivable, net
Accounts receivable are typically unsecured and are derived from revenue earned from customers. They are stated at invoice value less estimated allowances for sales returns, sales incentives, doubtful accounts, and other miscellaneous allowances. The Company performs ongoing credit evaluations of its customers to determine allowances for potential credit losses and doubtful accounts. The Company considers historical experience, ongoing promotional activities, historical claim rates, and other factors to determine the allowances for sales returns and sales incentives.
Allowance for Sales Returns: Allowance for sales returns consisted of the following activities (in thousands):
 Three Months Ended Nine Months Ended
 September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Beginning balance$6,376 $7,392 $7,808 $7,417 
Add: Charged to revenue3,733 3,881 12,307 12,045 
Less: Utilization of sales return reserve(4,039)(4,058)(14,045)(12,247)
Ending balance$6,070 $7,215 $6,070 $7,215 
Allowance for Sales Incentives: Allowance for sales incentives consisted of the following activities (in thousands):
 Three Months Ended  Nine Months Ended
 September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Beginning balance$26,641 $17,428 $23,024 $28,903 
Add: Charged to revenue37,622 16,048 93,655 43,598 
Less: Utilization of sales incentive reserve(36,292)(19,426)(88,708)(58,451)
Ending balance$27,971 $14,050 $27,971 $14,050 
Allowance for Doubtful Accounts: Allowance for doubtful accounts consisted of the following activities (in thousands):
Three Months Ended  Nine Months Ended
 September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Beginning balance$5,869 $5,578 $2,213 $3,498 
Provision for (recoveries of) doubtful accounts(2,263)(984)2,081 1,977 
Adjustments for write-off(323)(2,046)(1,011)(2,927)
Ending balance$3,283 $2,548 $3,283 $2,548 
Customer J accounted for 11% of the Company’s accounts receivable, net balance as of September 30, 2024. The Company did not have any customer that accounted for more than 10% of its accounts receivable, net balance as of December 31, 2023.
8
Recent Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures, which requires companies to provide enhanced disclosures about significant segment expenses within its reportable segment disclosures on an annual and interim basis. The guidance is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The guidance applies retrospectively to all prior periods presented in the financial statements. The Company is currently in the process of evaluating the effects of the new guidance.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures, which requires incremental disclosures within the income tax disclosures that increase the transparency and usefulness of income tax disclosures. The updated disclosures primarily require specific categories and greater disaggregation within the rate reconciliation, disaggregation of income taxes paid, and modifications of other income tax-related disclosures. The guidance is effective either prospectively or retrospectively for fiscal years beginning after December 15, 2024. The Company is currently in the process of evaluating the effects of the new guidance.
3. REVENUE
The Company’s disaggregated revenue is represented by the two reportable segments discussed in Note 15.
The contract balances include the following (in thousands):
 As of
 September 30, 2024December 31, 2023
Accounts receivable, net$729,911 $816,337 
Contract assets (included in Prepaid expenses and other current assets)7,372 17,964 
Deferred revenue, current portion$93,405 $102,157 
Deferred revenue, non-current portion23,267 24,572 
Total Deferred revenue$116,672 $126,729 
Accounts receivable are recorded at the amount invoiced, net of allowances for sales returns, sales incentives, and doubtful accounts. Payment terms can vary by customer and contract.
The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets are created when invoicing occurs subsequent to revenue recognition. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. The Company’s contract assets are current in nature and are included in Prepaid expenses and other current assets. Contract assets decreased by $10.6 million during the nine months ended September 30, 2024 due to the timing of billing to customers.
Total deferred revenue reflects consideration invoiced prior to the completion of performance obligations and revenue recognition. Total deferred revenue decreased by $10.1 million during the nine months ended September 30, 2024 primarily due to the timing of fulfillment of performance obligations offset by an increase in deferred revenue from higher Premium Subscriptions.
Revenue recognized during the three and nine months ended September 30, 2024, from amounts included in total deferred revenue as of December 31, 2023, was $10.5 million and $92.8 million, respectively. Revenue recognized during the three and nine months ended September 30, 2023, from amounts included in total deferred revenue as of December 31, 2022, was $10.8 million and $77.7 million, respectively.
Revenue allocated to remaining performance obligations represents estimated contracted revenue that has not yet been recognized which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Estimated contracted revenue for these remaining performance obligations was $940.1 million as of September 30, 2024, of which the Company expects to recognize approximately 57% over the next 12 months and the remainder thereafter.
The Company recognized $12.0 million and $15.8 million of revenue during the three and nine months ended September 30, 2024, respectively, and recognized $15.8 million and $41.8 million during the three and nine months ended September 30, 2023, respectively, from performance obligations that were satisfied in previous periods due to changes in the estimated transaction price of its revenue contracts.
Customer J accounted for 11% of the Company’s total net revenue during the three months ended September 30, 2024. The Company did not have any customers that accounted for more than 10% of the Company’s total net revenue during the nine months ended September 30, 2024. Customer I accounted for 11% and 11% of the Company’s total net revenue during the three and nine months ended September 30, 2023, respectively.
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4. GOODWILL AND INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of purchase consideration in a business combination over the fair value of tangible and intangible assets acquired net of the liabilities assumed. All goodwill relates to the Company’s platform segment.
Intangible Assets
The following tables summarize the Company’s intangible assets for the periods presented (in thousands, except years):
As of September 30, 2024
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted-Average Useful Lives
(in years)
Developed technology$73,367 $(57,944)$15,423 5.9
Customer relationships14,100 (14,100)$— 4.0
Tradename20,400 (7,466)12,934 9.8
Patents4,076 (1,407)2,669 14.0
Total Intangible assets$111,943 $(80,917)$31,026 6.7
As of December 31, 2023
Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Weighted-Average Useful Lives
(in years)
Developed technology$73,367 $(49,087)$24,280 5.9
Customer relationships14,100 (13,948)152 4.0
Tradename20,400 (5,966)14,434 9.8
Patents4,076 (1,189)2,887 14.0
Total Intangible assets$111,943 $(70,190)$41,753 6.7
The Company recorded amortization expense of $3.5 million and $4.4 million for intangible assets during the three months ended September 30, 2024 and 2023, respectively. The Company recorded amortization expense of $10.7 million and $13.2 million for intangible assets during the nine months ended September 30, 2024 and 2023, respectively.
The Company recorded amortization of developed technology in Cost of revenue, platform in the three months ended September 30, 2023 and 2024 and in the nine months ended September 30, 2024. In the nine months ended September 30, 2023, amortization of developed technology was recorded in Cost of revenue, platform and Research and development expenses. The Company recorded amortization of customer relationships and tradename in Sales and marketing expenses and amortization of patents in General and administrative expenses in the condensed consolidated statements of operations for all periods presented.
As of September 30, 2024, the estimated future amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands):
Year Ending December 31, 
2024 (remaining 3 months)$3,525 
202512,533 
20264,074 
20272,737 
20282,291 
Thereafter5,866 
Total$31,026 
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5. BALANCE SHEET COMPONENTS
Accounts Receivable, net: Accounts receivable, net consisted of the following (in thousands):
 As of
 September 30, 2024December 31, 2023
Accounts receivable, gross$768,054 $850,464 
Less: Allowances
Allowance for sales returns6,070 7,808 
Allowance for sales incentives27,971 23,024 
Allowance for doubtful accounts3,283 2,213 
Other allowances819 1,082 
Total allowances38,143 34,127 
Accounts receivable, net$729,911 $816,337 
Property and Equipment, net: Property and equipment, net consisted of the following (in thousands):
 As of
 September 30, 2024December 31, 2023
Computers and equipment$50,574 $51,320 
Leasehold improvements286,481 292,418 
Internal-use software5,916 6,980 
Office equipment and furniture35,900 36,900 
Property and equipment, gross378,871 387,618 
Less: Accumulated depreciation and amortization(155,872)(123,062)
Property and equipment, net$222,999 $264,556 
Depreciation and amortization expense for property and equipment assets for the three months ended September 30, 2024 and 2023 was $11.8 million and $14.5 million, respectively. Depreciation and amortization expense for property and equipment assets for the nine months ended September 30, 2024 and 2023 was $36.9 million and $39.8 million, respectively.
During the three and nine months ended September 30, 2024, the Company recognized impairment charges of $6.5 million and $7.0 million, respectively, related to property and equipment associated with the leased office facilities that are part of its restructuring efforts. During the three and nine months ended September 30, 2023, the Company recorded impairment charges of $68.1 million and $68.7 million, respectively, related to property and equipment associated with the leased office facilities that are part of its restructuring efforts. See Note 16 to the condensed consolidated financial statements for additional details.
Accrued Liabilities: Accrued liabilities consisted of the following (in thousands):
As of
September 30, 2024December 31, 2023
Payments due to content partners$247,371 $239,196 
Accrued cost of revenue152,966 147,875 
Marketing, retail, and merchandising expenses65,750 147,853 
Operating lease liability, current77,815 68,099 
Content liability, current62,509 54,319 
Other accrued expenses213,754 130,698 
Total Accrued liabilities$820,165 $788,040 
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Deferred Revenue: Deferred revenue consisted of the following (in thousands):
 As of
 September 30, 2024December 31, 2023
Platform, current$63,438 $66,636 
Devices, current29,967 35,521 
Total deferred revenue, current93,405 102,157 
Platform, non-current73 625 
Devices, non-current23,194 23,947 
Total deferred revenue, non-current23,267 24,572 
Total Deferred revenue$116,672 $126,729 
Other Long-term Liabilities: Other Long-term liabilities consisted of the following (in thousands):
As of
September 30, 2024December 31, 2023
Content liability, non-current$20,405 $24,115 
Other long-term liabilities23,248 25,071 
Total Other long-term liabilities$43,653 $49,186 
6. CONTENT ASSETS
Content assets, net consisted of the following (in thousands):
 As of
 September 30, 2024December 31, 2023
Licensed content, net and advances$159,928 $148,777 
Produced content:
Released, less amortization63,193 77,951
Completed, not released29,781 11,235
In production10,269 38,275
Total produced content, net103,243 127,461
Total Content assets, net and advances$263,171 $276,238 
Current portion (included in Prepaid expenses and other current assets)$15,792 $18,843 
Non-current portion$247,379 $257,395 
Amortization of content assets is included in Cost of revenue, platform in the condensed consolidated statements of operations and is as follows (in thousands):
 Three Months EndedNine Months Ended
 September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Licensed content$40,744 $37,454 $114,979 $124,690 
Produced content10,126 15,033 32,106 30,111 
Total amortization costs$50,870 $52,487 $147,085 $154,801 
During the three months ended June 30, 2024, the Company wrote-off $11.8 million of unamortized costs related to produced content assets that were removed from the content library on The Roku Channel. This write-off was not part of the Company’s restructuring efforts. There were no write-offs during the three months ended March 31, 2024 nor September 30, 2024.
During the three and nine months ended September 30, 2023, the Company recorded impairment charges of $61.6 million related to removing select licensed and produced content from The Roku Channel as part of its restructuring efforts. See Note 16 to the condensed consolidated financial statements for additional details on the Company’s
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restructuring efforts.
7. STRATEGIC INVESTMENTS
Investment in Convertible Promissory Notes
In June 2022, the Company agreed to provide financing of up to $60.0 million in the aggregate to a counterparty with whom the Company has a commercial relationship. The advances are in the form of convertible promissory notes and are recognized as Other non-current assets on the condensed consolidated balance sheets. The convertible promissory notes accrue interest at 5% per annum, and have maturity dates as reflected in the table below or are due upon a redemption event or in the event of a default.
The convertible promissory notes and their date of investment and maturity are as follows (in thousands):
As of September 30, 2024
Date of InvestmentAmount of InvestmentDate of Maturity
June 15, 2022$40,000June 15, 2025
March 23, 2023$5,000March 23, 2026
May 23, 2023$5,000May 23, 2026
The convertible promissory notes contain certain redemption features that meet the definition of embedded derivatives and require bifurcation. The Company elected to apply the fair value option and account for the hybrid instrument containing the host contract and the embedded derivatives at fair value as a single instrument, with any subsequent changes in fair value included in Other income, net in the condensed consolidated statements of operations. See Note 8 to the condensed consolidated financial statements for additional details on the fair value of the convertible promissory notes.
Investment in Preferred Stock
In September 2024, the Company invested $20.0 million in cash in exchange for preferred stock in a privately-held company. The Company elected to apply the measurement alternative for equity securities without readily determinable fair values as there are no quoted market prices for the preferred stock. This investment is measured at cost and adjusted to fair value when there is an observable price change from orderly transactions of identical or similar investments, and assessed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. There were no adjustments recognized in the three months ended September 30, 2024. As of September 30, 2024, the carrying value of the Company’s investment was $20.0 million, and is included within Other non-current assets on the condensed consolidated balance sheet.
8. FAIR VALUE DISCLOSURE
The Company’s financial assets measured at fair value on a recurring basis are as follows (in thousands):
As of September 30, 2024
Fair ValueLevel 1Level 3
Assets:
Cash and cash equivalents:
Cash$720,059 $720,059 $— 
Money market funds1,406,915 1,406,915 — 
Restricted cash, current1,822 1,822 — 
Other non-current assets:
Strategic investment - convertible promissory notes60,794 — 60,794 
Total assets measured and recorded at fair value$2,189,590 $2,128,796 $60,794 
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As of December 31, 2023
Fair ValueLevel 1Level 3
Assets:
Cash and cash equivalents:
Cash$594,493 $594,493 $— 
Money market funds1,431,398 1,431,398 — 
Restricted cash, current40,713 40,713 — 
Other non-current assets:
Strategic investment - convertible promissory notes53,816 — 53,816 
Total assets measured and recorded at fair value$2,120,420 $2,066,604 $53,816 
The following table reflects the changes in the fair value of the Company’s Level 3 financial assets (in thousands):
Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Beginning balance$57,450 $52,558 $53,816 $39,468 
Strategic investment - convertible promissory notes— — — 10,000 
Change in estimated fair value of strategic investment - convertible promissory notes3,344 644 6,978 3,734 
Ending balance$60,794 $53,202 $60,794 $53,202 
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Further, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs in measuring fair value and utilizes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value.
The three levels of inputs used to measure fair value are as follows:
Level 1—Quoted prices in active markets for identical assets or liabilities.
Financial assets and liabilities measured using Level 1 inputs include cash, cash equivalents, restricted cash, accounts receivable, prepaid expenses, accounts payable and accrued liabilities.
The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. The Company measured money market funds of $1,406.9 million and $1,431.4 million as cash equivalents as of September 30, 2024 and December 31, 2023, respectively, using Level 1 inputs.
Level 2—Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means.
The Company did not have Level 2 instruments as of September 30, 2024 and December 31, 2023.
Level 3—Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
As of September 30, 2024, the Company measured its strategic investment in convertible promissory notes using Level 3 inputs. The fair value of the strategic investment in convertible promissory notes on the date of purchase was determined to be equal to its principal amount. The Company recorded an unrealized gain of $3.3 million and $0.6 million, in Other income, net related to the adjustment to fair value of the strategic investment in convertible promissory notes during the three months ended September 30, 2024 and September 30, 2023, respectively. The Company recorded an unrealized gain of $7.0 million and $3.7 million, in Other income, net related to the adjustment to fair value of the strategic investment in convertible promissory notes during the nine months ended September 30, 2024 and September 30, 2023, respectively.
The Company classified the strategic investment in convertible promissory notes as Level 3 due to the lack of relevant observable market data over fair value inputs. The fair value of the strategic investment in convertible promissory notes was estimated using a scenario-based probability weighted discounted cash flow model. Significant
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assumptions include the discount rate, and the timing and probability weighting of the various redemption scenarios that impact the settlement of the strategic investment in convertible promissory notes.
Assets and liabilities that are measured at fair value on a non-recurring basis
Non-financial assets such as goodwill, intangible assets, property and equipment, operating lease right-of-use assets, and content assets are evaluated for impairment and adjusted to fair value using Level 3 inputs, only when impairment is recognized.
During the three months ended September 30, 2024, the Company recorded impairment charges of $11.4 million related to operating lease right-of-use assets, and $6.5 million related to property and equipment, both associated with the leased office facilities that are part of its restructuring efforts. During the three months ended September 30, 2023, the Company recorded impairment charges of $101.1 million related to operating lease right-of-use assets, and $68.1 million related to property and equipment, both associated with the leased office facilities that are part of its restructuring efforts, and $61.6 million of content assets impairment that are part of its restructuring efforts.
During the nine months ended September 30, 2024, the Company recorded impairment charges of $22.6 million related to operating lease right-of-use assets, and $7.0 million related to property and equipment, both associated with the leased office facilities that are part of its restructuring efforts. During the nine months ended September 30, 2023, the Company recorded impairment charges of $104.9 million related to operating lease right-of-use assets, and $68.7 million related to property and equipment, both associated with the leased office facilities that are part of its restructuring efforts, and $61.6 million of content assets impairment that are part of its restructuring efforts. See Note 16 to the condensed consolidated financial statements for additional details.
9. LEASES
The Company's operating leases are primarily for office facilities. The leases have remaining terms ranging from less than one year to nine years and may include options to extend or terminate the lease. The depreciable life of operating lease right-of-use assets is limited by the expected lease term. The Company has executed sublease agreements for a portion of its available office space. The subleases are also classified as operating leases.
The components of lease expense are as follows (in thousands):
 Three Months EndedNine Months Ended
 September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Operating lease expense
$16,046 $21,097 $52,426 $64,243 
Variable lease expense5,765 5,623 16,518 17,995 
Sublease income(4,871)— (7,756)— 
Total operating lease expense$16,940 $26,720 $61,188 $82,238 
Supplemental cash flow information related to leases is as follows (in thousands):
 Three Months EndedNine Months Ended
 September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases$24,192 $19,097 $67,914 $54,417 
Right-of-use assets obtained in exchange for lease obligations:
Operating leases$5,616 $28,795 $8,501 $40,704 
Decrease in operating lease right-of-use assets due to impairment (See Note 16 for details)$11,386 $101,077 $22,618 $104,867 
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Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate):
 As of
 September 30, 2024December 31, 2023
Operating lease right-of-use assets$314,326 $371,444
Operating lease liability, current (included in Accrued liabilities)$77,815 $68,099
Operating lease liability, non-current535,378 586,174
Total operating lease liability$613,193 $654,273
Weighted-average remaining term for operating leases (in years)7.27.9
Weighted-average discount rate for operating leases3.96 %3.94 %
Future lease payments under operating leases excluding any sublease income from sublease arrangements as of September 30, 2024 are as follows (in thousands):
Year Ending December 31,Operating Leases
2024 (remaining 3 months)$24,447 
2025101,538 
2026102,067 
2027100,352 
2028100,380 
Thereafter283,199 
Total future lease payments711,983 
Less: imputed interest(95,531)
Less: expected tenant improvement allowance(3,259)
Total (1)
$613,193 
(1) Total lease liabilities include liabilities related to operating leases right-of-use assets which were included in the impairment charges as part of the Company’s restructuring efforts reflected in Note 16 to the condensed consolidated financial statements.
As of September 30, 2024, the Company had approximately $1 million in commitments relating to operating leases that have not yet commenced.
As of September 30, 2024, the Company expects to receive approximately $86.3 million from its sublease arrangements which have a weighted average remaining lease term of approximately 5.5 years.
10. DEBT
On September 16, 2024, the Company entered into a Credit Agreement, by and among the Company, as borrower, certain of our subsidiaries, as guarantors, the lenders and issuing banks party thereto, and with Citibank N.A., as administrative agent (the “Credit Agreement”), which provides for (i) a five-year revolving credit facility in an aggregate principal amount of up to $300.0 million, and (ii) an uncommitted increase option of up to an additional $300.0 million exercisable upon the satisfaction of certain customary conditions. The Credit Agreement provides for a $100.0 million sub-facility for the issuance of letters of credit, and certain existing letters of credit were deemed outstanding under this facility. The Credit Agreement will mature on September 16, 2029. Proceeds from the Credit Agreement may be used for general corporate purposes, including to finance working capital requirements.
The Company’s obligations under the Credit Agreement are secured by substantially all the assets of the Company and its subsidiaries that are guarantors under the Credit Agreement. The Company may prepay, and in certain circumstances would be required to prepay, loans under the Credit Agreement without payment of a premium. The Credit Agreement also contains customary representations and warranties, customary affirmative and negative covenants, financial covenants requiring the maintenance of a minimum interest coverage ratio and a maximum total net leverage ratio, as well as customary events of default, the occurrence of which could result in amounts borrowed under
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the Credit Agreement becoming due and payable and remaining commitments terminated prior to its scheduled September 16, 2029 termination date.
Debt issuance costs incurred in connection with the Company’s Credit Agreement, which are recorded in Prepaid expenses and other current assets and Other non-current assets, are amortized over the five-year term and recognized as a component of interest expense in the condensed consolidated statements of operations.
The Company had outstanding letters of credit secured by the Credit Agreement of $36.4 million as of September 30, 2024. As of September 30, 2024, the Company had not borrowed against the Credit Agreement, and the Company was in compliance with all of the covenants of the Credit Agreement.

11. STOCKHOLDERS’ EQUITY
Preferred Stock
The Company has 10 million shares of undesignated preferred stock authorized but not issued with rights and preferences determined by the Company’s Board of Directors at the time of issuance of such shares. As of September 30, 2024 and December 31, 2023, there were no shares of preferred stock issued and outstanding.
Common Stock
The Company has two classes of authorized common stock, Class A common stock and Class B common stock. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders and holders of Class B common stock are entitled to ten votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A and Class B common stock are identical. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and are generally automatically converted into shares of the Company's Class A common stock upon sale or transfer. Shares issued in connection with exercises of stock options, vesting of restricted stock units, or shares purchased under the employee stock purchase plan are generally automatically converted into shares of the Company’s Class A common stock.
Common Stock Reserved for Future Issuance
As of September 30, 2024, the Company’s common stock reserved for issuance in the future is as follows (in thousands):
As of
 September 30, 2024
Common stock awards granted under equity incentive plans15,915 
Common stock awards available for issuance under the 2017 Employee Stock Purchase Plan (1)
5,089 
Common stock awards available for issuance under the 2017 Equity Incentive Plan31,427 
Total reserved shares of common stock52,431 
(1) The Company has not issued any common stock pursuant to the 2017 Employee Stock Purchase Plan.
Equity Incentive Plans
The Company currently grants equity under the Amended and Restated 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan became effective September 2017 in connection with the Company’s initial public offering (“IPO”). The 2017 Plan provides for the grant of incentive stock options to the Company’s employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of equity compensation to the Company’s employees, directors and consultants.
The Company’s outstanding equity relates to the 2017 Plan and the 2008 Equity Incentive Plan (“2008 Plan”), a pre-IPO plan. No additional equity grants have been made pursuant to the 2008 Plan subsequent to the IPO.
The equity granted under the 2017 Plan is subject to continuous service. Stock options granted under the 2017 Plan generally are granted at a price per share equivalent to the fair market value on the date of grant. Recipients of option grants who possess more than 10% of the combined voting power of the Company are subject to certain limitations, and incentive stock options granted to such recipients are at a price per share no less than 110% of the fair market value on the date of grant.
Restricted Stock Units
Restricted stock unit activity for the nine months ended September 30, 2024 is as follows (in thousands, except per share data):
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Number of
Shares
 
Weighted-Average
Grant Date Fair
Value per Share
Balance as of December 31, 2023
8,674 $97.33 
Awarded4,316 59.20 
Released(2,392)111.53 
Forfeited(581)96.89 
Balance as of September 30, 2024
10,017 $77.53 
As of September 30, 2024, the Company had $639.7 million of unrecognized stock-based compensation expense related to unvested restricted stock units that is expected to be recognized over a weighted-average period of approximately 2.1 years.
Stock Options
Stock option activity for the nine months ended September 30, 2024 is as follows (in thousands, except years and per share data):
 
Number of
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic
Value
Balance as of December 31, 2023
5,310 $75.55 6.8
Granted948 59.17 — 
Exercised(332)27.06 — 
Forfeited and expired(28)141.30 — 
Balance as of September 30, 2024
5,898 $75.33 6.8$109,020 
 
Options exercisable as of September 30, 2024
3,801 $71.59 5.8$82,033 
As of September 30, 2024, the Company had $69.8 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of approximately 2.1 years.
Stock-Based Compensation
The Company measures the cost of employee services received in exchange for an equity award based on the grant date fair value of the award. Stock options granted to employees generally vest over one to four years and have a term of ten years. Restricted stock units generally vest over one to four years.
The following table shows the total stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023 (in thousands):
 Three Months EndedNine Months Ended
 September 30, 2024September 30, 2023September 30, 2024September 30, 2023
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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12. COMMITMENTS AND CONTINGENCIES
Manufacturing Purchase Commitments
The Company has various manufacturing contracts with vendors in the conduct of the normal course of its business. In order to manage future demand for its products, the Company enters into agreements with manufacturers and suppliers to procure inventory based upon certain criteria and timing. Some of these commitments are non-cancelable. As of September 30, 2024, the Company had $238.2 million of non-cancelable purchase commitments for inventory. As of September 30, 2024, the Company had accrued $10.4 million related to anticipated losses on firm purchase commitments of inventory. The accrual is recorded in Accrued liabilities in the condensed consolidated balance sheets and the related expense is recorded in Cost of revenue, devices in the condensed consolidated statements of operations.
Content Commitments
The Company enters into contracts with content partners to license and produce content for streaming. When a title becomes available, the Company records a content asset and liability on the condensed consolidated balance sheets. Certain agreements include the obligation to license rights for unknown future titles for which the ultimate quantity and/or fees are not yet determinable as of the reporting date. The Company does not include any estimated obligation for these future titles beyond the known minimum amount. The unknown obligations could be material. The Company also licenses content under arrangements where the payments are variable and based on the revenue earned by the Company. Since those amounts cannot be determined, they are not included in the obligations below.
As of September 30, 2024, the Company’s total obligation for licensed and produced content was $268.1 million, of which the Company recorded $65.9 million in Current liabilities and $20.4 million in Other long-term liabilities in the condensed consolidated balance sheets. The remaining $181.8 million is not yet recognized on the condensed consolidated balance sheets as the content does not meet the criteria for asset recognition.
The expected timing of payments for these content obligations are as follows (in thousands):
Year Ending December 31,
2024 (remaining 3 months)$58,992 
2025