Roku(US:ROKU) ZACKSยท2025-08-04 18:35Core Insights - Roku reported Q2 2025 earnings of 7 cents per share, surpassing the Zacks Consensus Estimate of a loss of 16 cents, and improved from a loss of 24 cents per share in the same quarter last year [1][9] - Revenues increased by 15% year-over-year to $1.11 billion, exceeding the consensus estimate by 3.58% [1][9] - The company's shares fell by 15.1% following the earnings release, primarily due to a 230 basis point erosion in gross margin for its high-growth platform business [2] Revenue Breakdown - Platform revenues, which account for 87.8% of total revenues, rose 18% year-over-year to $975.5 million [8] - Device revenues, making up 12.2% of total revenues, declined by 6% year-over-year to $135.6 million [8] Advertising and Partnerships - Advertising activities grew faster than overall platform revenues, supported by partnerships with Amazon and others, enhancing advertiser reach and performance [5][6] - The Roku Channel maintained its position as the 2 app in the U.S. and 3 globally, contributing to increased user engagement and sign-ups [3][4] Operating Performance - Gross margin improved by 90 basis points year-over-year to 44.8%, while operating expenses increased by 5% to $521 million, reducing as a percentage of total revenues [10][11] - Adjusted EBITDA rose by 79% year-over-year to $78.2 million, with an operating loss of $23.3 million compared to a loss of $71.2 million in the previous year [11] Balance Sheet - As of June 30, 2025, Roku had cash and cash equivalents of $2.3 billion, slightly up from $2.26 billion at the end of Q1 2025, with no long-term debt [12] Guidance - For Q3 2025, Roku anticipates total net revenues of approximately $1.2 billion, a 13% increase year-over-year, with platform revenues expected to grow by 16% [13] - For the full year 2025, Roku projects platform revenues of $4.075 billion and adjusted EBITDA of $375 million, with platform gross margin expected to be 52% [14]