- Roku reported a profit of $164.2 million, or $1.08 per share, and revenue of $1.35 billion, compared to earnings of 56 cents per share and revenue of $1.3 billion expected by Wall Street analysts
- The gains were driven by increases in subscription and advertising revenues and profitability in its devices segment.
- Roku shares climbed 0.16% in after-hours trading following the release of the quarter’s results
Roku is setting itself up nicely for the pending takeover by Fox Corp.
The company smashed Wall Street expectations, with second-quarter profit surging 1,464% (you read that right) to $164.2 million, or $1.08 per share, as total revenue grew 22% to $1.35 billion, driven by momentum in subscriptions and advertising revenues and profits in its platform and devices units.
Platform revenue grew 25% to $1.22 billion, while profits climbed 30% to $646.8 million, driven by a 39% increase in ad revenue and 16% increase in subscription revenue.
Meanwhile, the devices business swung to a profit of $26.9 million, but revenue tumbled 1% to $133.7 million. The segment benefitted from a tariff refund for payments made between the second quarter of 2025 and first quarter of 2026.
The latest quarterly results come as Fox is set to acquire the company in a pending $22 billion deal, which is slated to close in the first half of 2027.
“As we look ahead, we remain focused on disciplined execution, investing in long-term growth opportunities, and creating value for our shareholders. We believe our scale, platform strategy, and financial strength position Roku to continue leading the evolution of TV streaming while delivering sustainable, long-term growth,” Roku founder Anthony Wood wrote in the company’s quarterly shareholder letter. “Our pending acquisition by Fox is an extraordinary opportunity to accelerate our vision, allowing us to scale faster and innovate more aggressively for viewers, partners, and advertisers.”
As a result of the deal, Roku did not hold a conference call with analysts or offer a an updated financial outlook. The company previously forecasted that platform revenue would grow 21% to $5 billion for the full year, while devices revenue would come in at approximately $535 million, resulting in total revenue of $5.5 billion. It also anticipated mid-single-digit year-over-year operating expense growth for 2026 and said it was on track to drive double-digit platform growth and achieve $1 billion in free cash flow by 2028.
Roku’s stock climbed 0.19% in after-hours trading on Thursday following the results.
Roku streaming hours climb on NBA playoffs, World Cup viewership
Roku, which reaches over 100 million streaming households worldwide, grew total streaming hours by 7% to 37.9 billion during the quarter, with the gains primarily driven by viewership of the NBA playoffs and World Cup.
In the U.S., Roku completed the rollout of its new home screen, which is used by more than half of broadband households, during the third quarter and said the results of the update have been “encouraging.”
It also launched Fox One and Peacock as add-ons in its premium subscriptions offering and saw hundreds of thousands of sign-ups through Soccer Zone in the Roku Sports Experience. Fox One, Apple TV and Peacock viewers can now pause and resume live programming, with additional DVR features set to roll out in the coming months.
Additionally, the company continues to scale its premium, ad-free streaming service Howdy, which launched a standalone mobile app and as an add-on in Prime Video.
Roku warns of continued pricing pressure from tightened chip supply
Roku warned that it continues to monitor pricing pressure resulting from tightened memory chip supply, but noted that the Roku TV OS requires “significantly less” dynamic and storage memory than completing platforms. Prices for anything requiring a chip have gone up thanks to the intense demand for components to power AI infrastructure.
Roku-made TVs accounted for 5% of total TV unit sales volume in the U.S. during the quarter, driven by strength at Amazon and Best Buy and the continued ramp of Hiro Roku TV models at Target.
During the quarter, Roku expanded original equipment manufacturer (OEM) licensing partnerships with Hisense and TCL through distribution across Walmart, Best Buy, Target and other retailers.
Looking ahead, it expects those partnerships to contribute to Roku TV model unit sales volume in the second half of 2026 and for distribution costs to be weighted towards the second half of the year. Sales and marketing expenses declined year over year in the first half of 2026 and will increase in the second half as shipment volumes ramp.
