Roku announced its third-quarter results, showcasing impressive growth and key milestones, including a historic quarterly revenue exceeding $1 billion. This achievement underscores Roku’s solid footing in the highly competitive streaming landscape, buoyed by both its innovative platform and a robust content lineup.
Roku’s total revenue reached $1.062 billion in Q3 2024, marking a 16% increase year-over-year. Platform revenue, which accounts for the lion's share, was up 15% YoY to $908 million. Roku also reported a gross profit of $480 million, reflecting a 30% increase compared to Q3 2023, largely due to strategic cost management and a favorable shift in revenue composition.
Roku maintained its upward trend with positive Adjusted EBITDA of $98.2 million, a substantial improvement from $43.4 million in the same quarter last year. This marked Roku’s fifth consecutive quarter of positive adjusted EBITDA and free cash flow.
The company’s reach continues to expand, with streaming households climbing to 85.5 million globally, up by 2 million compared to Q2. Streaming hours reached 32 billion, a 20% year-over-year increase, while average daily streaming per household also grew, reaching 4.1 hours in Q3 2024. Despite flat Average Revenue Per User (ARPU) YoY at $41.10, the company highlighted that a greater share of international streaming households is driving engagement while being in early monetization stages.
A key component of Roku’s success is its position as the #1 TV OS in the U.S., Mexico, and Canada. In Q3, Roku strengthened its device offerings with the release of its Roku Ultra 2024, featuring enhanced performance and usability, including a quad-core processor and Wi-Fi 6, catering to user demand for high-speed, seamless streaming experiences. This upgrade received high praise in the industry, further cementing Roku’s role as a preferred OS in North America.
THE ROKU CHANNEL: A GROWING HUB FOR STREAMING CONTENT
The Roku Channel ranked as the third most popular app on Roku’s platform by reach and engagement. Streaming hours on The Roku Channel grew by 80% YoY, reflecting Roku’s expanded content strategy and appeal. Highlights include the recent launch of the Roku Sports Channel, as well as expanded news coverage during key U.S. events, such as the presidential debates.
Notably, Roku expanded its partnerships with Disney and Paramount, bringing additional FAST channels featuring popular content like “Extreme Makeover: Home Edition” and “The Jersey Shore.” Roku’s original programming, such as “Side Hustlers,” co-created with Ally Bank and Reese Witherspoon’s Hello Sunshine, continued to resonate with audiences and advertisers alike, proving Roku’s ability to drive engagement through branded storytelling.
MONETIZATION AND ADVERTISING SUCCESS
Roku's monetization strategies continue to pay off. Platform revenue primarily comes from advertising and subscription fees through Roku Pay. Notable was Roku’s advertising growth across non-media and entertainment sectors, fueled by the addition of the NBC Olympic Zone and the NFL Zone to the Roku Sports Zone. Both generated high engagement, providing valuable sponsorship opportunities and strengthening Roku's position as a go-to platform for advertisers targeting streaming audiences.
To cater to a broader array of advertisers, Roku introduced Roku Ads Manager, a self-service CTV advertising tool. This new offering provides advanced targeting and measurement capabilities, appealing to both SMBs and large enterprises.
“We are pleased with the execution of our monetization initiatives. We expect these initiatives, including the early positive impacts from our deeper integration with The Trade Desk, along with tailwinds from Political ad spend to continue in Q4. We estimate Q4 Total net revenue of $1.140 billion growing 16% YoY, with Platform revenue growing 14% YoY and Devices revenue growing 25% YoY. We estimate Q4 Total gross profit of $465 million and Adjusted EBITDA of $30 million. We expect Sales and Marketing to be more seasonal this year than in the prior year. As a result, we expect OpEx to be up 9% YoY in Q4. However, Sales and Marketing and total OpEx will be slightly down for the full year 2024, reflecting our ongoing operational discipline. Our expectations for both Q4 and 2024 OpEx YoY growth rates exclude one-time restructuring charges from 2023,” stated Anthony Wood, Founder and CEO, and Dan Jedda, CFO, in a letter to shareholders.
The company’s future metrics will center on streaming hours, platform revenue, adjusted EBITDA, and free cash flow as it expands in international markets, focusing less on household counts in the U.S. alone.