PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for Q2 2025 show a shift to profitability with a net income of $10.5 million, compared to a $34.0 million net loss in the prior year [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to $4.28 billion as of June 30, 2025, with significant increases in goodwill and intangible assets due to the Frndly acquisition Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $2,253,276 | $2,160,236 | | Accounts receivable, net | $628,475 | $812,510 | | Goodwill | $309,406 | $161,519 | | Intangible assets, net | $64,496 | $27,501 | | **Total Assets** | **$4,281,955** | **$4,303,933** | | **Liabilities & Equity** | | | | Total current liabilities | $1,108,188 | $1,232,502 | | **Total Liabilities** | **$1,691,403** | **$1,811,196** | | **Total stockholders' equity** | **$2,590,552** | **$2,492,737** | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, Roku reported a net income of $10.5 million, a significant improvement from a $34.0 million net loss in the prior-year period, with total net revenue growing 15% YoY to $1.11 billion Q2 2025 vs Q2 2024 Performance (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total net revenue** | **$1,111,038** | **$968,179** | | Platform revenue | $975,471 | $824,333 | | Devices revenue | $135,567 | $143,846 | | **Total gross profit** | **$497,658** | **$424,700** | | Loss from operations | ($23,333) | ($71,243) | | **Net income (loss)** | **$10,503** | **($33,953)** | | Net income (loss) per share | $0.07 | ($0.24) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly increased to $248.5 million for the six months ended June 30, 2025, primarily offset by cash used in investing activities for the Frndly acquisition Six Months Ended June 30 Cash Flow Summary (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $248,465 | $70,089 | | Net cash used in investing activities | ($95,143) | ($1,547) | | Net cash used in financing activities | ($68,562) | ($32,944) | | **Net increase in cash** | **$84,760** | **$35,598** | [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the May 2025 acquisition of Frndly TV for $169.8 million, increasing goodwill and intangible assets, and outline future purchase commitments and restructuring charges - On May 9, 2025, the Company acquired Frndly TV, Inc. for a total purchase consideration of **$169.8 million**, including **$103.6 million** in cash and **$65.8 million** in contingent consideration, aimed at growing Platform revenue and Roku-billed subscriptions[65](index=65&type=chunk) - Goodwill increased from **$161.5 million** to **$309.4 million**, with the **$147.9 million** increase attributed to the Frndly acquisition[70](index=70&type=chunk) - As of June 30, 2025, the company had total future purchase commitments of **$505.8 million**, with the largest commitments for content (**$188.5 million**) and manufacturing (**$170.4 million**)[110](index=110&type=chunk) - The company recorded restructuring charges of **$3.1 million** for the six months ended June 30, 2025, primarily related to asset impairment from ceasing use of certain office facilities[130](index=130&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 15% YoY revenue growth in Q2 2025 to an 18% increase in Platform revenue, driven by advertising and streaming services, and updated key performance metrics to focus on profitability - Starting in Q1 2025, the company updated its Key Performance Metrics to Streaming Hours, Platform Revenue, Adjusted EBITDA, and Free Cash Flow to better align with its focus on growing Platform revenue and profitability[139](index=139&type=chunk) Key Performance Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Streaming Hours (billions) | 35.4 | 30.1 | +17% | | Platform Revenue (millions) | $975.5 | $824.3 | +18% | | Adjusted EBITDA (millions) | $78.2 | $43.6 | +79% | - The company expects full-year 2025 devices revenue and gross margin to be slightly down, primarily due to the impact of tariffs[138](index=138&type=chunk)[332](index=332&type=chunk) - The **18% increase** in Platform revenue for Q2 2025 was driven by higher advertising revenue and streaming services distribution, with the acquisition of Frndly contributing approximately **1.8 percentage points** of this growth[167](index=167&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations affecting its $2.25 billion cash balance and foreign currency exchange rates impacting operating expenses - A **100 basis point** change in interest rates would affect interest income by approximately **$22.5 million** due to the company's cash and cash equivalents balance[207](index=207&type=chunk) - Foreign currency risk is primarily related to operating expenses denominated in British pounds and Euros, as most revenue is generated in the United States[208](index=208&type=chunk) [Item 4. Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of June 30, 2025, the company's disclosure controls and procedures were effective at a reasonable assurance level[210](index=210&type=chunk) - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[212](index=212&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings but does not anticipate any material adverse effect on its business or financial condition from current matters - The company states that it does not believe the final outcome of any current legal matters will have a material adverse effect on its business, financial condition, or results of operations[112](index=112&type=chunk)[214](index=214&type=chunk) [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including intense competition, reliance on advertising revenue and key content partners, supply chain dependencies, cybersecurity threats, and concentrated voting power from its dual-class stock structure - The company faces intense competition from large, well-resourced companies like Amazon, Apple, and Google, which offer competing streaming devices and operating systems[222](index=222&type=chunk) - A small number of content partners account for a significant portion of streaming hours; for the three months ended June 30, 2025, the top three streaming services (excluding The Roku Channel) represented nearly half of all hours streamed[247](index=247&type=chunk) - The business depends on sole-source suppliers for key components like SoCs and Wi-Fi modules, creating significant supply chain risk[278](index=278&type=chunk) - The dual-class stock structure concentrates significant voting control with the founder and CEO, Anthony Wood, who controls a majority of the combined voting power as of June 30, 2025[402](index=402&type=chunk)[404](index=404&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=75&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[424](index=424&type=chunk) [Item 5. Other Information](index=76&type=section&id=Item%205.%20Other%20Information) No officers or directors adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No officers or directors adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in the second quarter of 2025[429](index=429&type=chunk) [Item 6. Exhibits](index=77&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate documents and CEO/CFO certifications

Core Insights - Roku reported strong Q2 2025 results with GAAP net revenue of $1.11 billion, exceeding estimates of $1.07 billion, and a positive net income of $0.07 per share, a significant improvement from a loss of $(0.24) last year [1][2] Financial Performance - Q2 2025 GAAP EPS was $0.07, compared to an estimated loss of $(0.15) and a loss of $(0.24) in Q2 2024 [2] - Total revenue reached $1.11 billion, a 15% increase from $968.2 million in Q2 2024 [2] - Platform revenue was $975 million, up 18% year over year from $824 million [2] - Gross profit increased by 17.2% to $498 million from $425 million [2] - Adjusted EBITDA rose 79.4% to $78.2 million from $43.6 million [2] Business Overview - Roku operates a digital streaming platform with two main segments: Platform (advertising, content distribution, billing) and Devices (hardware) [3] - The Platform segment is the primary revenue and profit driver, making its growth a strategic priority [3] Strategic Focus - Recent efforts include expanding advertising innovation, enhancing the device ecosystem, and increasing monetization through platform offerings [4] - Attracting advertisers and driving user engagement are crucial for financial performance [4] Q2 Highlights - Platform revenue growth was driven by strong video advertising performance and the acquisition of Frndly, contributing approximately 1.8 percentage points to growth [5] - The advertising business outpaced broader U.S. digital and connected TV ad markets [5] - Platform gross margin decreased to 51%, reflecting a shift to programmatic ad orders [6] Devices Segment - Devices revenue fell 6% year over year to $136 million, but gross profit improved to break-even from a loss of $15.2 million [7] - The company maintained its position as the top TV OS in the U.S., Canada, and Mexico, with ongoing product innovation [7] User Engagement - Streaming hours increased by 5.2 billion year over year to 35.4 billion, with the Roku Channel ranking as the second most engaged app in the U.S. [8] Financial Outlook - For Q3 2025, management projects GAAP revenue of $1.205 billion, gross profit of $520 million, and adjusted EBITDA of $110 million [11] - The full fiscal year 2025 outlook for Platform revenue is raised to $4.075 billion, a 16% year-over-year increase [11] - Platform gross margin is expected to remain around 52% [11]

Core Insights - The article emphasizes the importance of conducting personal in-depth research and due diligence before making investment decisions, highlighting the inherent risks involved in trading [3]. Company and Industry Summary - The analysis is intended for informational purposes only and should not be considered as professional investment advice [3][4]. - There is a disclosure regarding the analyst's beneficial long position in shares of AMZN and GOOG, indicating a vested interest in these companies [2].

Core Viewpoint - Roku Inc's shares declined despite reporting strong second-quarter results, with analysts providing positive outlooks and raising price targets for the stock [1] Financial Performance - Roku reported revenues of $1.111 billion, a 15% year-on-year increase, exceeding guidance of $1.070 billion, driven by an 18% growth in Platform revenues and a lower-than-expected contraction in Device revenues [2] - The company raised its 2025 revenue outlook by $100 million to $4.650 billion, reflecting a 13% year-on-year growth, with improved Platform growth outlook from 12% to 16% [3] - Adjusted EBITDA guidance for 2025 was raised by $25 million to $375 million [3] Analyst Ratings and Price Targets - JPMorgan's analyst raised the price target from $100 to $105 while maintaining an Overweight rating [2] - Wedbush's analyst lifted the price target from $100 to $110, emphasizing Roku's focus on profitable expansion [4] - Guggenheim Securities reiterated a Buy rating and raised the price target from $100 to $105 [6] - KeyBanc Capital Markets raised the price target from $115 to $116 while reaffirming an Overweight rating [8] - Needham maintained a Buy rating and increased the price target from $100 to $110 [10] - Rosenblatt Securities maintained a Neutral rating with a price target of $101 [12] Growth Drivers and Market Position - Analysts noted that Roku is likely to continue gaining market share as advertising budgets shift from linear TV to connected TV, particularly in 2025 [5] - The company is expected to benefit from the Frndly TV acquisition, which has clarified its path to profitability [9] - Roku's platform revenues are projected to grow by 16% in the third quarter, higher than the consensus of 12% [7] - The company is ramping efforts targeting small to mid-sized businesses through a self-serve Ads Manager, presenting a unique opportunity in the SMB sector [13]

Group 1 - The S&P 500 is experiencing all-time market highs, leading to increased investor nervousness during the Q2 earnings season [1] - Companies are under pressure to justify their valuations amidst these market conditions [1] - Gary Alexander has extensive experience in technology sectors, contributing insights that shape industry trends [1] Group 2 - The article does not provide specific financial data or performance metrics related to any companies or sectors [2][3]

Group 1 - Roku reported quarterly earnings of $0.07 per share, exceeding the Zacks Consensus Estimate of a loss of $0.16 per share, and showing improvement from a loss of $0.24 per share a year ago, resulting in an earnings surprise of +143.75% [1] - The company achieved revenues of $1.11 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.58%, and up from $968.18 million in the same quarter last year [2] - Roku has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Group 2 - Roku shares have increased approximately 23.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.2% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The trend of estimate revisions for Roku was favorable ahead of the earnings release, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Group 3 - The current consensus EPS estimate for the upcoming quarter is $0.03 on revenues of $1.16 billion, while for the current fiscal year, it is -$0.18 on revenues of $4.57 billion [7] - The Broadcast Radio and Television industry, to which Roku belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, which may impact stock performance [8]

Financial Data and Key Metrics Changes - In Q2 2025, Roku's platform revenue grew by 18% year over year, indicating strong execution of their growth strategy [10][11] - The company expects a full-year EBITDA margin improvement of 180 basis points compared to 2024, with further margin improvement anticipated in 2026 [14][15] - Roku is on track to achieve operating income positivity in Q4 2025, which is earlier than previously indicated [15] Business Line Data and Key Metrics Changes - Video advertising on Roku's platform outpaced the growth of the OTT and digital ad markets in the US, reflecting successful ad demand expansion [11] - Roku built subscriptions are performing well, contributing positively to overall revenue growth [12] Market Data and Key Metrics Changes - The company reported a strong performance in the advertising sector, with the launch of Roku Ads Manager opening new markets for performance-based advertisers [20][21] - The upfront advertising market was positive, indicating a healthy demand for television advertising [27] Company Strategy and Development Direction - Roku's strategy focuses on diversifying ad demand and enhancing platform revenue, which has shown promising results over the past 18 months [10][12] - The integration of Friendly into Roku's platform is expected to drive further growth in subscriptions and enhance user engagement [12][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining double-digit platform revenue growth while improving profitability in 2026 and beyond [14][15] - The macroeconomic environment is viewed positively, with expectations of continued growth in broadband household penetration and platform revenue [85][87] Other Important Information - Roku's Ads Manager is seen as a significant opportunity for small and medium-sized businesses, tapping into a previously underutilized market [108][110] - The Roku Channel (TRC) experienced an 80% growth in streaming hours in Q2, although future growth rates are expected to moderate [75] Q&A Session Summary Question: What drove the outperformance in Q2 and the full-year raise? - Management attributed the outperformance to the successful execution of their platform revenue growth strategy, which has been in place for 18 months [10][11] Question: Can you discuss the trajectory for 2026? - Management is optimistic about sustaining double-digit growth and improving profitability, with expectations of operating income positivity in Q4 2025 [14][15] Question: How is the advertising sector performing? - Both Roku Ads Manager and third-party partnerships are performing well, with Ads Manager opening new markets for performance-based advertisers [20][21] Question: What is the outlook for platform growth excluding certain factors? - Excluding political and Friendly contributions, platform growth is expected to remain steady at around 17% for Q2 and Q3 [36] Question: Can you elaborate on the gross margin outlook? - The gross margin is expected to remain in the range of 51% to 52%, with potential upside if higher-margin activities pick up [37][38] Question: How is Roku managing ad inventory to maintain pricing? - Roku's scale and unique ad placements allow for efficient pricing of inventory, with a strategy focused on diversifying demand [91][92] Question: What are the early learnings from Friendly TV? - Friendly has contributed positively to growth, with ongoing integration efforts aimed at increasing subscriptions [81][82] Question: How does Roku plan to drive subscription growth? - The company is focusing on recommendations and bundling strategies to enhance subscription revenue [97][98]

Financial Data and Key Metrics Changes - In Q2 2025, Roku achieved an 18% year-over-year growth in platform revenue, indicating the effectiveness of its revenue growth strategy implemented 18 months prior [8][12] - The company expects a full-year EBITDA margin improvement of 180 basis points compared to 2024, with further margin improvements anticipated in 2026 [12][13] - Roku is on track to achieve operating income positivity in Q4 2025, which is earlier than previously indicated [13][14] Business Line Data and Key Metrics Changes - Video advertising on Roku's platform outpaced the growth of the OTT and digital ad markets in the US, reflecting successful ad demand diversification efforts [8] - Roku built subscriptions, particularly premium subscriptions, continue to perform well, contributing positively to overall revenue [9] Market Data and Key Metrics Changes - The advertising market remains robust, with positive trends observed during the upfront advertising season, indicating a healthy demand for connected TV advertising [25][26] - The Roku Channel (TRC) saw an 80% growth in streaming hours in Q2, although this growth rate is expected to moderate in future quarters [73] Company Strategy and Development Direction - Roku's strategy focuses on growing platform revenue through deeper integrations with third-party partners and launching new products like Roku Ads Manager [7][9] - The company is committed to operational efficiency while balancing investments in platform growth and margin expansion [12][13] - Roku aims to leverage its first-party data and proprietary content to enhance monetization and drive subscription growth [51][94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining double-digit platform revenue growth while improving profitability in 2026 and beyond [11][12] - The integration of new partnerships, such as with Amazon DSP, is expected to enhance demand and optimize pricing, although the ramp-up period for these integrations is acknowledged [116] Other Important Information - Roku has initiated a $400 million share repurchase program to offset dilution and enhance shareholder returns [42][44] - The company is actively working on bundling opportunities with its newly acquired Friendly TV to enhance its subscription offerings [94] Q&A Session Summary Question: What drove the outperformance in Q2 and the full-year raise? - Management highlighted the success of their platform revenue growth strategy and the positive results from monetization initiatives [7][11] Question: Can you discuss the trajectory for 2026? - Management indicated confidence in achieving operating income positivity in Q4 2025 and sustaining growth in 2026 [12][13] Question: How is the advertising business performing? - Both Roku Ads Manager and third-party partnerships are performing well, with a focus on diversifying demand [20][24] Question: What is the outlook for platform growth excluding certain factors? - Management provided growth rates of around 17% for Q2 and Q3 when excluding political and Friendly contributions [30][34] Question: Can you elaborate on the gross margin outlook? - The company expects gross margins to remain in the 51% to 52% range, with potential upside if higher-margin activities pick up [35][36] Question: How is Roku managing ad inventory to maintain pricing? - Roku's scale and unique ad placements allow it to price inventory efficiently, maintaining value despite market fluctuations [87][89] Question: What are the early learnings from Friendly TV? - Friendly TV contributed 1.8 points of growth in Q2, with ongoing integration efforts to enhance visibility and subscriptions [78][79] Question: How does Roku plan to drive subscriptions? - The company is focusing on content recommendations and bundling strategies to enhance subscription growth [93][94]

Exhibit 99.1 Fellow Shareholders, July 31, 2025 In Q2, Platform revenue grew 18% YoY, surpassing our outlook, due in part to strong performance in video advertising and the successful acquisition of Frndly. We have recently expanded our relationships with Amazon and Wurl, and we will continue to deepen our integrations with all major DSPs (demand-side platforms) to drive ad demand. We are raising our full-year 2025 outlook for Platform revenue to $4.075 billion and Adjusted EBITDA to $375 million. With impr ...

Core Insights - Roku Inc is set to release its second-quarter report on July 31, with Wall Street anticipating advertising growth due to partnerships with Airbnb, Amazon, and Adobe, projecting revenue of $1.07 billion, an 11% increase year-over-year [1] Group 1: Stock Performance - Roku has seen a year-to-date increase of 24.2%, recovering from early-April lows, with support at the 20-day moving average since late May, and the stock was up 2.2% at $92.33 [2] - Historically, Roku stock has finished higher in only three of the last eight post-earnings sessions, with a notable 14.1% gain in February [4] Group 2: Analyst Sentiment - Analysts are increasingly optimistic ahead of the earnings report, with several bullish notes issued this month; of the 30 analysts covering the stock, 10 maintain a "hold" or worse rating, while the 12-month consensus price target aligns closely with current levels, indicating potential for further optimism if earnings exceed expectations [4] Group 3: Short Interest - Short interest in Roku has been gradually decreasing but still represents 5.7% of the stock's available float, which could provide tailwinds for the stock [5]