Financial Data and Key Metrics Changes - The company reaffirmed its platform revenue and adjusted EBITDA outlook for the full year 2025 despite macro uncertainties, indicating confidence in its business model [8][14] - The company expects adjusted EBITDA of $350 million for 2025 and platform revenue guidance of $3.95 billion [15] Business Line Data and Key Metrics Changes - Advertising revenue grew faster than the overall OTT ad market, driven by a shift from linear to streaming and increased programmatic advertising [9][11] - Subscription revenue is also on the rise, with the company building tens of millions of Roku subscriptions each month [12] Market Data and Key Metrics Changes - The Roku Channel became the number two app on the platform in the US, with engagement growing 84% year over year, showcasing the platform's reach and engagement capabilities [41][46] Company Strategy and Development Direction - The company is focusing on diversifying revenue streams, enhancing ad products, and leveraging its home screen for better user engagement [10][88] - The acquisition of Friendly, a subscription service, is expected to enhance the company's subscription offerings and drive growth [12][57] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties but highlighted positive trends in advertising and subscription growth as key drivers for confidence in future performance [9][14] - The company is well-positioned to navigate potential downturns due to its diversified revenue streams and strong market presence [26][80] Other Important Information - The company has a diversified manufacturing strategy to mitigate tariff impacts, ensuring flexibility in sourcing and production [74][75] - The company is on track to achieve 100 million streaming households, which is a significant milestone for its growth strategy [80][112] Q&A Session Summary Question: Confidence in full year platform guide and advertising trends - Management reaffirmed guidance based on positive trends in streaming and advertising, with a focus on performance and flexibility in ad offerings [9][10][14] Question: Buffer against macro trends - Management indicated that the shift from guaranteed to non-guaranteed advertising has been favorable, driving more volume to the platform [24][26] Question: Contribution of programmatic to platform revenue growth - Management noted that while some programmatic revenue is incremental, there is also a mix of previously direct sales now executed programmatically [33][34] Question: Significance of Roku Channel's growth - The Roku Channel's rise to the number two app enhances the company's negotiating power with content providers and advertising partners [41][46] Question: Impact of tariffs on device business - Management stated that while tariffs may affect device sales, the focus remains on growing Roku households rather than device revenue [108][112] Question: Revenue trajectory for platform growth - Management expects a slight deceleration in growth rates in Q4 due to tough comparisons but remains optimistic about sustaining growth in the medium term [82][103]

Core Insights - Roku's first-quarter financial report for 2024 shows a revenue increase of 16% year-over-year, reaching $1,021 million, exceeding analyst expectations [2][3] - The company reported a loss per share of $0.19, which is an improvement from the previous year's loss of $0.35 [2] - Platform revenue, which includes advertising and streaming services, rose by 17% to $880.8 million, with a gross margin of 52.7% [3][4] Key Metrics - Revenue: $882 million in Q1 2024 vs. $1,021 million in Q1 2025, a 16% increase [2] - Earnings per share: ($0.35) in Q1 2024 vs. ($0.19) in Q1 2025 [2] - Platform revenue: $755 million in Q1 2024 vs. $881 million in Q1 2025, a 17% increase [2] - Free cash flow: $427 million in Q1 2024 vs. $298 million in Q1 2025, a 30% decrease [2] Platform Growth - The growth in platform revenue was driven by increased advertising revenue and premium subscription sign-ups [3][4] - Roku's advertising revenue outpaced the overall U.S. over-the-top ad market growth, benefiting from an expanding consumer base and enhancements to its ad platform [4] Future Outlook - For Q2 2024, Roku anticipates a 14% year-over-year growth in platform revenue and a gross margin of 51% [5] - Device revenue is expected to decline by 10% year-over-year, although full-year device revenue is projected to remain stable compared to 2024 [5] - The company aims for positive operating profit by 2026 despite macroeconomic uncertainties related to U.S. tariff policies [6] Market Reaction - Following the earnings report, Roku's stock fell approximately 5% in after-hours trading, influenced by concerns over tariffs affecting device sales [7] - The company's device sales are vulnerable to tariffs on Chinese imports, which could impact user acquisition and platform revenue growth [7] User Base and Growth Dependency - Roku's platform growth is contingent on expanding its user base, which currently includes millions of users accessing its services through Roku devices and TVs [9] - Any slowdown in user acquisition could adversely affect platform revenue, despite the company maintaining its revenue guidance for 2025 [9]

Financial Data and Key Metrics Changes - Roku reaffirmed its full-year platform revenue and adjusted EBITDA outlook for 2025 despite macroeconomic uncertainties, indicating confidence in its business model and execution [7][14]. - The company expects adjusted EBITDA of $350 million for 2025, with platform revenue guidance set at $3.95 billion [15]. Business Line Data and Key Metrics Changes - Advertising revenue grew faster than the overall OTT ad market, driven by a shift from linear to streaming and increased programmatic advertising [10]. - Subscription services are also a focus, with Roku building tens of millions of subscriptions monthly, and the acquisition of Friendly is expected to enhance subscription growth [12][59]. Market Data and Key Metrics Changes - The Roku Channel became the number two app on the platform by engagement, with a year-over-year engagement growth of 84% [41]. - The company noted a significant shift in advertising from guaranteed to non-guaranteed campaigns, which aligns with current market demands for flexibility [16][102]. Company Strategy and Development Direction - Roku is focusing on diversifying its revenue streams, particularly in advertising and subscriptions, while leveraging its home screen for better user engagement [10][90]. - The company is also enhancing its programmatic advertising capabilities to meet the evolving needs of advertisers [18][34]. Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic uncertainties but highlighted positive trends in advertising and subscription growth, indicating a strong position to navigate these challenges [14][26]. - The company is optimistic about achieving positive operating income by 2026, supported by its diversified revenue streams [15]. Other Important Information - Roku's manufacturing strategy is diversified across multiple countries, providing flexibility to mitigate tariff impacts on device sales [76]. - The company is on track to reach 100 million streaming households, which is a key performance indicator for its growth strategy [82][112]. Q&A Session Summary Question: Confidence in full-year guidance amid market uncertainty - Management reaffirmed guidance based on specific positive trends in the streaming market and Roku's execution capabilities [7][14]. Question: Buffer against macro trends - Management indicated that ongoing initiatives in advertising and subscriptions could help offset potential macroeconomic downturns [25][26]. Question: Contribution of programmatic advertising to revenue growth - Management confirmed that while some programmatic revenue is incremental, there is also a mix of previously direct sales now executed programmatically [33][34]. Question: Significance of Roku Channel's engagement growth - Management emphasized the importance of the Roku Channel's growth in driving advertising and subscription opportunities [41][44]. Question: Impact of tariffs on device business - Management stated that the diversified manufacturing strategy helps mitigate tariff impacts, and they do not anticipate a material change in gross profit dollars for devices [76][78]. Question: Revenue trajectory for platform growth - Management expects a slight deceleration in growth rates in Q4 due to tough comparisons but remains optimistic about sustaining growth in the medium term [85][104].

Roku posted solid first-quarter results, topping $1 billion in revenue and narrowing its losses. The company posted a loss of 19 cents a share on a diluted basis, which beat Wall Street forecasts and showed improvement from the year-earlier’s loss of 35 cents. Revenue also nipped expectations, coming in at $1.02 billion, up 16% from the same period in 2024. As media and tech companies offer a glimpse of how advertising and electronic goods are holding up in a turbulent economy, Roku looks to be a company w ...

Fellow Shareholders, May 1, 2025 Exhibit 99.1 In Q1 we grew Platform revenue 17%, in line with our outlook, with contributions from both video advertising and streaming services distribution activities. Our scale in the U.S. exceeds half of broadband households and continues to grow. Beginning with our Home Screen, we continue to enhance the Roku Experience to improve content discovery for viewers, which is increasing engagement, ad reach, and subscriptions. In the U.S., The Roku Channel is now the #2 app o ...

Core Viewpoint - Roku's stock experienced significant volatility, reaching a 52-week high after strong financial results but subsequently losing over a third of its value since then [1][2]. Financial Performance Expectations - Roku is expected to report revenue of $1.005 billion for the first quarter, representing a 14% increase year-over-year, with a 16% increase in its ad-driven platform business [3]. - The adjusted EBITDA is projected to be $55 million, indicating a nearly 35% year-over-year increase, although it reflects a sequential decline from the previous holiday quarter [4]. - A net loss of $40 million is anticipated for the quarter, translating to approximately $0.27 per share, which is an improvement from the $50.9 million loss in the same quarter last year [5]. Analyst Sentiment - Analysts have recently reduced their price targets for Roku, with cuts of $36 and $25, but the new targets of $93 and $100 still suggest a potential upside of 34% to 44% [6]. - Despite concerns about an ad recession and tariff impacts, analysts maintain a bullish outlook on Roku's ability to meet its full-year bottom-line guidance [7]. Market Dynamics - The advertising market is expected to face challenges in a softening economy, but Roku is likely to gain market share as spending shifts from traditional TV to connected TV platforms [11]. - Roku started the quarter with 89.8 million streaming households, showing increased engagement and a rising average revenue per user (ARPU) for four consecutive quarters [12].

Core Viewpoint - Roku is positioned for significant revenue growth due to its international expansion and improved user monetization capabilities [1] Group 1: Company Overview - Roku has a strong potential for revenue growth driven by its international market expansion [1] - The company is enhancing its ability to monetize existing users, which is a positive indicator for future financial performance [1] Group 2: Analyst Background - The analyst has over 30 years of experience as a Merchant Seaman and 15 years of investing experience, with a focus on technology stocks due to an engineering background [1] - The insights shared are based on personal opinions and experiences, with no external compensation influencing the analysis [1]

Group 1 - Roku Inc is currently trading at $69.75, up 2.4%, ahead of its first-quarter earnings report [1] - The stock has shown a history of volatile post-earnings movements, averaging a 16.5% change after the last eight reports, with a current options market pricing in a 20.4% post-earnings swing [2] - Roku is experiencing an eight-day winning streak, reducing its year-to-date deficit to 6.3% after previously trading as low as $52.53 [3] Group 2 - There has been a notable increase in put options activity, with Roku's 10-day put/call volume ratio at 0.53, ranking higher than 85% of readings from the past year [5] - Despite the potential for significant price movements, Roku's Schaeffer's Volatility Scorecard indicates a low score of 6 out of 100, suggesting it is a prime candidate for premium selling [6]

Core Viewpoint - Roku is expected to report first-quarter 2025 results with total net revenues projected at $1.005 billion, reflecting a 14% year-over-year increase, driven by strong Platform revenue growth of 16% [1][8] Revenue Estimates - The Zacks Consensus Estimate for first-quarter revenues is set at $1 billion, indicating a year-over-year growth of 13.96% [2] - The consensus estimate for Devices revenues is $127 million, while Platform revenues are expected to reach $877 million [13] Earnings Expectations - Roku anticipates a total gross profit of $450 million and adjusted EBITDA of $55 million for the first quarter [1] - The consensus mark for loss is estimated at 20 cents per share, representing a year-over-year growth of 42.86% [2] Earnings Surprise History - In the last reported quarter, Roku achieved an earnings surprise of 45.45%, with an average surprise of 55.07% over the trailing four quarters [5] Factors Influencing Results - Platform growth remains robust, with management estimating a 16% year-over-year increase, supported by streaming services distribution and advertising activities [8] - However, Devices revenues and gross profit were impacted by increased seasonal discounting, leading to excess inventory and slight pressure on gross margins [7][10] Competitive Landscape - Roku faces intensified competition in the advertising space as major players like Netflix, Warner Bros. Discovery, and Disney expand their ad-supported streaming offerings [11] - The absence of political advertising compared to the previous quarter may have also tempered advertising momentum [8] International Expansion - Roku's international growth into markets such as Mexico, Canada, and the United Kingdom is expected to drive user growth, although immediate revenue impact is limited as the focus is on scaling [12] Valuation Metrics - Roku currently trades at a price-to-cash flow ratio of 43.86X, significantly higher than the industry average of 31.54X, indicating high growth expectations but an unattractive valuation for value investors [18] Investment Considerations - While Roku shows strong platform fundamentals and user engagement, caution is advised due to elevated inventory levels, margin pressures, and competitive challenges in the ad-supported streaming market [21][22]

Group 1: Block - Block is a fintech company aiming to disrupt traditional banking with services like payroll, inventory management, loans, credit cards, and payment processing through its Square ecosystem [3] - The company has shown positive revenue and gross profit trends, achieving profitability for several consecutive quarters, although it faces challenges with slowing revenue growth and a volatile crypto-trading business [4] - Block's Cash App has a large user base, ending 2024 with 57 million monthly active users, a 2% year-over-year increase, providing opportunities for revenue growth through cross-selling and new service introductions [6] - The popularity of Cash App's services among younger generations suggests a strengthening ecosystem, which could redirect transaction dollars from traditional banking to Block [8] Group 2: Roku - Roku is redefining entertainment consumption by facilitating the shift from cable to streaming, providing a platform for leading streaming services [9] - The company has grown its ecosystem to nearly 90 million streaming households, facilitating over 100 billion viewing hours annually, making it attractive to advertisers [10] - Roku has historically sold its hardware devices at a loss to drive users into its ecosystem, compensating for hardware losses through monetization efforts [11] - The company's prospects are promising due to the available whitespace in the streaming market, suggesting that investors should consider buying the stock while it is down [12]