Roku, Inc. Q4 FY2025 earnings call

• In 2023, Roku rightsized its cost structure and achieved adjusted EBITDA breakeven in 2024 ahead of schedule. • In advertising, deepened integration with leading demand-side platforms and scaled measurement/performance capabilities. • In subscriptions, Q4 2025 was the biggest quarter ever for premium subscription net adds, with plans to add more Tier 1 partners, roll out bundles, and expand Howdy beyond Roku. • Retail distribution strategy includes broadening and diversifying, with expansions at Best Buy, Target, Amazon, and partnerships with TV OEMs like TCL and Hisense. • AI is seen as a significant opportunity, integrating across the technology stack to improve discovery, engagement, and monetization, including on the viewer experience and advertising side. • International focus on building scale in countries like Mexico, Canada, Brazil, and the U.K., with varying stages of monetization.

Platform revenue was a key focus. In Q4 2025, platform revenue grew over 18% to surpass $1.2 billion. For full year 2025, platform revenue grew 18%. Advertising saw deepened integration with leading demand-side platforms and scaled measurement/performance capabilities. Subscriptions had Q4 2025 as the biggest quarter ever for premium subscription net adds. International had varying stages of scale and monetization, with Mexico and Canada showing progress in monetization while Brazil and others were still building scale.

• Q1 2026 platform revenue outlook is over 21% growth. • Full-year 2026 platform revenue outlook is about 18% growth. • Full-year 2026 adjusted EBITDA guidance is $635 million, representing over 50% year-over-year growth and margin expansion of 267 basis points to 11.6%. • Free cash flow expected to be above adjusted EBITDA as CapEx light. • Path to over $1 billion in free cash flow by end of 2028. • $250 million remaining on share buyback program.

• Forward-looking statements are subject to risks and uncertainties, with actual results possibly differing from forward-looking statements. Factors causing material differences include those detailed in the shareholder letter and periodic SEC filings.

Q: Can you help bridge the 1Q revenue outlook of over 21% growth to the full year outlook of about 18% growth?

A: Anthony Wood mentioned factors like Q1 last year being an easy comp, Q1 2026 including full benefit of Frndly acquisition, and stronger visibility into Q1 vs H2. Dan Jedda added details on Q1 comps, Frndly impact, and visibility into political spending.

Q: Comment on retail distribution strategy for 2026 given Walmart switching House TV to VIZIO's operating system?

A: Anthony Wood said Roku is focusing on broadening and diversifying retail distribution, with examples like expansions at Best Buy, Target, Amazon, and partnerships with TV OEMs, and expects first-party TV sales to increase after shifting production to Mexico.

Q: How do you think AI could impact the streaming landscape and Roku?

A: Anthony Wood said AI will reduce content cost, grow engagement on platform which is monetized, and is a significant opportunity for Roku, integrating across technology stack to improve discovery, engagement, and monetization on viewer experience and advertising side.

Q: How is the third-party ad demand partnership with Amazon impacting the business?

A: Charlie Collier said it's early innings, Amazon is working to bring new clients, and Dan Jedda added it's tracking as expected and will be a contribution over time.

Q: Thoughts on international viewership and monetization opportunity relative to platform business?

A: Dan Jedda said international has different stages, with Mexico and Canada showing monetization progress, Brazil and others building scale, and subscriptions and Roku Channel being opportunities for growth.

Q: Balance between driving engagement with short-form video and protecting ad environment for high-quality advertisers?

A: Anthony Wood said Roku has short-form content but focus is on long-form video as people generally consume that, and Charlie Collier added Roku's FAST channel environment is powerful and they curate content around interests.

Q: Expand on advertising opportunity on home screen outside of M&E?

A: Charlie Collier said Roku is testing new home screen designs with non-M&E ads, and Anthony Wood added testing new ad units and home screen design with plans to roll out this year.

Q: Integration of Howdy launch and Frndly acquisition?

A: Anthony Wood said both are going well, Howdy subscribers growing, Frndly available on other platforms and plans to launch Howdy off Roku, with owned and operated services expanding subscription revenue.

Q: Impact of Netflix's acquisition of Warner Bros. on Roku?

A: Anthony Wood said Roku's scale makes it an essential partner, and Dan Jedda talked about OpEx growth and free cash flow outlook.

Q: Talk about Ads Manager and go-to-market for SMB prospects?

A: Anthony Wood and Charlie Collier discussed Ads Manager integrating AI, different sales funnel for SMBs, lead gen, performance driving growth, and ramp potential from hundreds to tens of thousands of advertisers