Roku Posts Positive Quarterly Results, Raises Full-Year Outlook as Ad Business Expands

Roku Inc (NASDAQ: ROKU) reported third-quarter results that exceeded Wall Street expectations on both revenue and profit, driven by strong growth in its advertising and content business. The company also achieved positive operating income for the first time since 2021.

• Revenue rose 14% year-over-year to $1.21 billion, with diluted earnings per share of $0.16 — ahead of the $0.09 consensus estimate.

• Platform revenue, which includes advertising and content distribution, climbed 17% to $1.07 billion.

• Gross profit increased 9% to $525 million, while streaming hours jumped by 4.5 billion to 36.5 billion during the quarter.

Roku highlighted that The Roku Channel ranked as the second most popular app on its U.S. platform by engagement and captured approximately 6.2% of U.S. TV streaming time in September — making it the most-viewed free ad-supported streaming television (FAST) service.

Looking ahead, the company expects fourth-quarter revenue of about $1.35 billion, above analysts’ estimates of $1.32 billion, and adjusted EBITDA of roughly $145 million. Roku also raised its full-year revenue forecast to $4.69 billion and expects adjusted EBITDA of about $395 million, up from its prior outlook of $375 million.

Wedbush analysts maintained an Outperform rating, lifting their price target to $115 from $110, noting that “Roku is setting the chessboard for meaningful growth in its advertising business.” The firm cited the company’s expanding DSP partnerships, AI-driven content discovery integration, and the launch of its Ads Manager tool for small and medium-sized businesses.

While device revenue fell 5% to $146 million, Roku said it remains focused on driving platform engagement rather than hardware profitability. The company’s platform gross margin stood at about 52%.

Wedbush analysts added that Roku is well positioned to gain market share as ad budgets continue to shift from traditional linear TV to connected TV. Partnerships with Amazon, AppsFlyer, and FreeWheel are expected to further expand Roku’s ad inventory and measurement capabilities.