Roku(US:ROKU)2025-10-31 20:06Financial Performance - Total net revenue for Q3 2025 reached $1,210,638, a 14% increase from $1,062,203 in Q3 2024[29] - Platform revenue was $1,064,644, up 17% from $908,175 in the same quarter last year[29] - Net income for Q3 2025 was $24,812, compared to a net loss of $9,030 in Q3 2024[31] - Gross profit for the nine months ended September 30, 2025, was $1,467,602, a 14% increase from $1,293,066 in the same period last year[29] - For the three months ended September 30, 2025, Roku reported a net income of $24,812 thousand, compared to a net loss of $9,030 thousand for the same period in 2024, indicating a significant improvement in profitability[33]. - Total net revenue for the three months ended September 30, 2025, was $1,210.6 million, a 14% increase from $1,062.2 million in 2024[174] - Net income for the three months ended September 30, 2025, was $24.8 million, compared to a net loss of $9.0 million in 2024[158] Assets and Liabilities - Total current assets increased to $3,328,692 as of September 30, 2025, from $3,234,163 at the end of 2024[26] - Total liabilities decreased to $1,772,199 from $1,811,196 at the end of 2024[26] - Total stockholders' equity increased to $2,625,086 as of September 30, 2025, from $2,492,737 at the end of 2024[26] - Total stockholders' equity increased to $2,625,086 thousand as of September 30, 2025, up from $2,460,510 thousand a year earlier, reflecting a growth of approximately 6.7%[33]. - As of September 30, 2025, accounts receivable, net balance was $745.4 million, down from $812.5 million as of December 31, 2024[63] - Total accrued liabilities increased to $933.7 million as of September 30, 2025, compared to $852.8 million at the end of 2024[82] Cash Flow - Cash provided by operating activities for the nine months ended September 30, 2025, was $376,068 thousand, a substantial increase from $138,753 thousand in the same period of 2024[36]. - Roku's total cash, cash equivalents, and restricted cash at the end of the period was $1,575,491 thousand, down from $2,128,796 thousand a year earlier, representing a decrease of approximately 26%[38]. - Net cash used in investing activities was $821.3 million for the nine months ended September 30, 2025, primarily due to purchases of short-term investments totaling $725 million[210] - Net cash used in financing activities was $146.8 million for the nine months ended September 30, 2025, mainly due to tax payments of $115.1 million and stock repurchases of $50 million[211] Expenses - Research and development expenses for Q3 2025 were $182,235, slightly up from $178,798 in Q3 2024[29] - The company incurred stock-based compensation expenses of $268,165 thousand for the nine months ended September 30, 2025, slightly lower than $283,124 thousand for the same period in 2024[36]. - The total stock-based compensation expense for the three months ended September 30, 2025, was $88.0 million, compared to $100.1 million for the same period in 2024[119] - Sales and marketing expenses increased by $5.0 million, or 2%, during the three months ended September 30, 2025, driven by higher marketing and merchandising expenses[192] Acquisitions - 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[70] - The Company incurred $3.5 million in acquisition-related expenses for the Frndly TV acquisition, recorded in General and administrative expenses[72] - Total Purchase Consideration for the acquisition of Frndly was $169.8 million, with goodwill recorded at $147.9 million, primarily due to expected synergies[74] Revenue Segments - The platform segment revenue is generated from digital advertising and streaming services, while the devices segment revenue comes from sales of streaming players and smart home products[146] - Platform revenue reached $1,064.6 million for the three months ended September 30, 2025, a 17% increase from $908.2 million in 2024[155][176] - Devices revenue decreased by 5% to $145.9 million for the three months ended September 30, 2025, compared to $154.0 million in 2024[174] Market and Economic Factors - The company has identified risks related to macroeconomic factors such as inflation, interest rates, and geopolitical developments that may impact its business[148] - The company faces significant risks in the highly competitive TV streaming industry, including challenges in growing advertising revenues and maintaining relationships with content partners[224] Tax and Compliance - The company reported an income tax expense of $13.2 million for the three months ended September 30, 2025, compared to $4.1 million for the same period in 2024, primarily due to higher pre-tax book income[126] - The enactment of the One Big Beautiful Bill Act ("OBBBA") is expected to decrease the Company's effective tax rate in fiscal year 2025 due to provisions related to research and development costs[125] Stock and Shareholder Information - The Company initiated a stock repurchase program in August 2025, authorizing up to $400 million for repurchases through December 31, 2026, with $350 million remaining available as of September 30, 2025[110] - During the three months ended September 30, 2025, the Company repurchased approximately 567,582 shares of Class A common stock for a total of $50 million, averaging $88.10 per share[112] - As of September 30, 2025, the Company had a total of 56,624 shares of common stock reserved for future issuance under various equity incentive plans[113]