Roku (ROKU) 5 Nov 202020 Q3 Earnings call transcript

Company Profile

Participants

Conrad Grodd	Vice President, Investor Relations
Anthony Wood	Founder and CEO
Steve Louden	Chief Financial Officer
Scott Rosenberg	Senior Vice President, General Manager, Platform Business
Ralph Schackart	William Blair
Laura Martin	Needham
Michael Nathanson	MoffettNathanson
Justin Patterson	KeyBanc
Jason Helfstein	Oppenheimer
Thomas Forte	D.A. Davidson
Vasily Karasyov	Cannonball Research
Steven Cahall	Wells Fargo
Jason Bazinet	Citi
Jeffrey Rand	Deutsche Bank
Mark Zgutowicz	Rosenblatt Securities
Mark Mahaney	RBC Capital
Richard Greenfield	LightShed
Ben Swinburne	Morgan Stanley
Ruplu Bhattacharya	Bank of America

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Third Quarter 2020 Roku Earnings Conference call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. now today, hand Investor Conrad would to conference Relations. I speaker your Grodd, Instructions] like the to over [Operator Vice President, Please sir. go ahead,

Conrad Grodd

and Business, financial of management’s Wood, obligations the in and Vice following Operator. will of The conference results found for as joined to XX, our information. who on you, X, November Good CFO; views today any And Scott our our which and and our on am additional to shareholder be Thank this reflects ir.roku.com. President, at Q&A. with CEO; discussions, of of do update call management today, Anthony Louden, afternoon. XXXX. including commentary I Senior available can call Founder available General quarter not only, section third revise undertake website XXXX our responses details Roku’s for are Platform the the to ended or we Relations Roku’s Investor Manager September Rosenberg, be questions, welcome letter, your Full results Steve

financial globally, and financial impact business of industry. and fourth future pandemic our and full advertising our today’s limited the the performance business quarter and are uncertainties. made and of statements growth perspective in industry, and including involve on are and on call expectations, TV the regarding of Some our based the of the for risks forward-looking and year assumptions the but XXXX, include, our These to, our TV current statements and the on future statements not are COVID-XX forecasts results Roku, future

could and of a statements. our to shareholder actual the forward-looking to today’s Please on materially results for filings factors, may actual differ results differ Our periodic company’s refer discussed which these from about those information reasons. the from SEC with cause this for call variety materially letter

visit posted which our today content. You most the for on encourage website at comparable will our discussed periodically letter, non-GAAP of reconciliations Relations shareholder measures our ir.roku.com, important I is IR find in Investor to website and measures to you

this our Finally, for on comparable comparisons unless otherwise the stated, will of all period results XXXX. be call against

to like the to Anthony. I’d Now, over hand call

Anthony Wood

gave Advertising operational performance pandemic, strong Roku long-term and to QX marketers the in advertising of it to hand our like connected incremental their value uncertainty in well consumers. TV, TV control our over capabilities Despite over business greater measure platforms to by ongoing Steve. and Roku’s outstanding that, portions Roku. three. was More subscription. you consumers industry call. retain way Major our reassessed with marketing embrace benefited media and streamed and The large included QX Channel to continue joining American today’s for of and upfront content Roku than Partnering companies all our ever advertising to This valuable Roku. They for their and capabilities. build and Roku audiences. streaming. moved efficient remarkable live commitments free Streaming with effectiveness. linear significant significant giving as as stoking an choice, innovation target is as services, Thank and and programming reorganize scale TV to TV their for from is Advertisers and around offering its advanced because reach before. as investments the Roku well ad-supported leverage their prospects I model. caused shows inherent are and With the will financial to to

Steve Louden

Anthony. Thanks,

the robust significant streaming by Roku QX quarter, the XX including XX.X quarter active per and streaming of walk at billion highlights looking financial with streaming Before replenishment viewpoint retailer growth strong a during promotional end the demand to after was level This X% certain year-over-year, increasing player tight activity year-over-year, discuss continued year-over-year, continues of take sales, grow, and Engagement products. incremental a up to of given XX% normalized extraordinary ended player hours player users confluence in up strong selling summer. active arriving with year-over-year XX% restrictions holiday the your on our were of Platform X% units X.X We factors, price of rapidly added players questions, through inventory lifted due year-over-year. for for inventory more the QX. portion I in in million at only accounts rate QX of accelerated, account operational up demand and we active accounts, channel will average Sales in inventory forward. unit a QX COVID-related and hours while as and resulting less levels million driven XX% decreased

robust roughly like QX strength and items. our Now, monetized up revenue Platform in revenues million, up record Roku into XX% year-over-year, QX, total $XXX financial year-over-year I’d leaned advertisers growth almost to Player by XX% in distribution impressions in to businesses. driven segment dollars streaming the video Platform to driven increased viewing, estimated accounted outside as was and to highlight these by well to factors in the rapid demand Roku, content broad-based change versus TV saw to significant of subscription growth, segments. a account XX% both year-over-year distribution XX% in model both from deal year-over-year of in value values shifting some TV process. for $XXX of million, traditional advertising strong given as deal our for few and reaccelerated they portion QX led active premium ad-supported viewership in QX. upfront movie Reflecting follow The as and rate that content benefited with as our take services flexibility advantage lifetime of the business increases rentals. disruptions content ad an consumer

level at-the-market Player quarter, also year more million. positive last an was XX% previously. a basis than content in Player as by for due XX% rate inherent can the XX% scale resulting We highlights XXX growth, exited revenue lower the as sequential gross of was than our margin margin liquidity grew capital $XXX to with the points gain unit an investments. monetization to return ads both year-over-year year-over-year highest cash rates. the adjusted and due cash to and distribution same driven gross in of growth As offering, the incremental revenue margins. be both in the grew XX%. year-over-year, recognition significantly fewer seven promotions which basis, on revenue, restricted million a expanded record, Roku reminder, million of extraordinary EBITDA a driven $X margin over up profit to billion segment continues business leverage increases. lumpy in via quarter increased versus cash of QX strong result This the adjusted well equivalents, adjusted short-term player period of EBITDA model the XX.X% XXXX QX agreements of strong but years, and as over of first trends the and equity in the EBITDA of was Gross distribution. total a cash, over raising mentioned higher faster margin as platform level and XXXX in XX% $XX quarter-to-quarter. in combining an content by by outsized several Gross of than of was position, improvements half $XXX Platform eclipsing

given to quarter, credit liquidity variable facility. remains We that do provide short-term and our also Similar uncertain. not have both we environment million $XX under the last of for to formal intend available macro QX, guidance

our how related or provide potential for levels resilience be Barring we holiday we roughly believe growth cautiously as consumer holiday about patterns materializing, few a QX which last well in framework tracking the any external impact with holiday will the We historical we the year-over-year enter we season. are the in estimate optimistic as are potential or closely business line could risk COVID-XX with will Coming pleased range. to mid-XX% now was seasons, as of the spending QX, economic on quarter develop. overall and the the significant disruptions, shopping to factors revenue we that Instead, the season. the

expect platform of to revenue. account two-thirds for We revenue total roughly

QX QX. breakeven. of be not to seasons, will that plan earlier, anniversary content QX we lapping from dataXu material we this close player replicated distribution revenue quarter, will past gross to increases mentioned keep value with benefited our certain along Like holiday I in the Also, launches. deal margins do acquisition, anticipate be we As

growth. QX sequential by line growth the between to and in mid-XX% the which expenses seen is we We XX%, sales operating year. with gross anticipate primarily levels similar and QX be anticipate platform be this in year, margins to in to headcount and marketing driven QX While to from and QX QX last

continue our of rate with the our has QX to confident trend turn the OpEx. quarterly and are TV questions. at reminder, our from outset expense to business beam grow only we consistent slow towards in In pandemic operating with a call Operator? of overall to the of let’s future long-term into our very QX the we that we Despite that, performance. uncertainty, to due of the over took pleased all to outstanding remain remained QX in growth steps part levels and pandemic As resiliency the With our accelerated summary, macro the relatively business streams. the for believe ability

Operator

Blair. first Thank with Schackart you. comes Our from Instructions] [Operator William Ralph question

line is open. Your

Ralph Schackart

posted Steve, in mid-XX% Thanks great. the on just just relative guide, I sort you Obviously, of get if But the evening. what some looking QX taking question. wanted is for Good to growth growth perspective could. QX. to XX%

of the there. conservatism there’s outsized sure recognized of that the I added element just got there’s if portion curious QX. big am in a Just deal

in quantification you. how portion deal So, more was and color just there perhaps be some great? QX you give could Thank any outsized large some of would extra if or the the color on

Steve Louden

the Yeah. Hey, question. Yeah. for Thanks Rob.

on lifetime then was TV partners, great there. of content side, As a quarter. distribution the trends, very growth, sales calling QX on values performances both and up several you advertising record It’s mentioned, including our positive strong with I of deal were the models, the mean, outstanding our confluence and an player

remains terms think, and the the just the there’s spending a environment, levels. season, In resurgences world and lot out focus in from thing of of is, I as uncertainty of well that to to in on everything COVID-related the consumer as macro variability U.S. the the around holiday important there QX, shape

-- are are why tracking, giving a not we these is all So that’s outlook. we things are which formal

and cautiously mid-XX% reference happy it holiday of similar and resilience seasons, season the business of mean we were trajectory growth look think a are to on could the color. basis. with on year-over-year so the we very you range which are of the the the and to-date certainly, revenue holiday couple last in So some our optimistic I

As don’t I mentioned in QX. in significant anticipate remarks, changes my we deal value

every Although we that’s do that -- quarter. analysis obviously,

thing fact as mid-QX, board new we well other note the the just will certain into I that lapping launches came those as services thoughts is are in some on which QX, dataXu in QX. that’s The factored acquisition, of

that were there. in -- are So that are included our those also factors thinking

Ralph Schackart

Okay.

Operator

you. Thank

next Our with question from comes Needham. Martin Laura

Your is open. line

Laura Martin

why Scott, like did here focused you. talk is Great results weren’t mix incremental how buy towards with with that products or towards question dataXu the now let’s the bars you I player growth certain on of dataXu. it our that very view And the about -- Does and players from you in imply I away Anthony, guarantees. Thank very you. they pivoted you, mix products that XX-XX start new outperformance am it an Why available is and XX% this guys. having influence new is extra does year-over-year. this am interested interested Could player most words letter, in matter? ads before not? reach guys I these on our in say, for sound that you giving that the one platform? stay -- then TV get And

Scott Rosenberg

media something the can and that for publisher across reach ability media Roku from so manage platform layering marketers. business a new scale. OneView of entirely. Complete buying about or you and and Media to whether including, broadly they broader Thanks I to dataXu, a off or in the it referenced broader They the that referenced. ad up. Scott Hey, to and Roku question. broader the in orchestrate Since the the bunch in the buy, example, little platform products as The acquiring leverage identity into manage reach you it dataXu is here. really some the on Roku bought are data context at the was bring dataXu -- media frequency -- within actually from it color are it and unique time. then OneView, that incremental for we re-branded had have same as advantages have bit same a our a we and talk on will product we OneView you around a took all we ad have referencing we Laura. It’s and been the features, We provide stepped a newer upfront re-launched and to

is been highlighting trigger upfront. OTT. over now, several up marketers. key across years year, that and ability in frequency it for incremental linear deliver to and to we we to the invest measure For into choose have we our We stepped which linear to a guarantees guarantee and true would This would OTT, reach reach offered marketers

of progress spent through are year-over-year OneView tons significant occurring the in we overall, So, media getting on and really OneView, just going. quarter

yet have brands had into Lexis, was national unique most a delayed. just home big off reach managing for budget sponsorable screen is one That’s TV their Roku like now their of as of leaning -- significant We to team, a portion OneView adding DraftKings, out the sports of capabilities, got canceled spend their spender, punch shift who then into is on of one-two budgets to cross-platform Has example, it and cross and using consumers sports really OTT OneView. channel experiences reach. our for that spend example. is moved through the and

do made overall, progress with to OneView. Anthony, second So, we very are take you excited the we question? want about have

Anthony Wood

Hey, Yeah. Laura.

Canada XX% the you Roku a to players year-over-year. also like are strong They actually for year-over-year, In up sales in markets, to unit number then sales think well. international an unit and certain I continue referring TVs stat is U.K., player the So perform very had us. extremely which quarter. And doubled were great is

like products as -- a So growing are audio we smaller some audio and in than still unit are other then sales, Those introduced, market. just Streambar the the and have we we -- still saw well. but player products those not lot

new units million, the -- are relationship is we the our on year-over-year with active think result and Roku I in they I result is active up mean, customers we in XX% engines a in to that quarter active our but households, account Roku also great. accounts was don’t more really were So strengthens also And existing which into lots of result $XX sell seeing all those well account, doing going well. as growth we fronts which

Operator

you. Thank

Michael with Nathanson Our from next question comes MoffettNathanson.

line is Your open.

Michael Nathanson

That of wants slowed Thanks. I streaming Can makes to this up But down about a have bit Whoever Channel please talk sense. Roku do? The a It couple. Channel picked Roku hours you like quarter? a looks share. bit. ton a

to perhaps Thanks. to was behind So their a with interesting Roku that? more And one to your that your willingness content you platform. strategy build What deal as guys then thought and to that that you with announced And it Channel content what’s I move original do Amazon to you Channel work do day maybe Roku further? across you? moving partner’s does see

Anthony Wood

Hey, Michael. Yeah. This Anthony. is

of answer in questions. and your Channel best Roku an will the Channel in It’s is asset reach for extremely quarter. the most be I So to Roku Scott, The think, doing well. us important But doubled

Scott Rosenberg

Yeah. Roku XX people, growing accounts fast active platform of top the growth million already It account active really reach, the hours other underlying with XX was an of and terms about channel. an than Channel, faster pace incredible now reaching double in quarter any growing for

All also, of this in channel which part accrues the to growth great of in great benefit, a our began way participating Some of Roku putting product, our channel to driven into this partners launch content who our the It’s was rolling Roku’s Channel. June. by surf. we a live out EPG, and are really but grid, course,

than Roku doubled Channel earnings are the So quarter. within in the more partner

performance strong the for Roku really overall, So, Channel.

and better Channel outcomes more as financial your even depth, It programming as content, us partners, Roku the it question for for more more partners, grows more sort As attracts just of yet and possibilities a generates answer platform, -- bigger our off platform. and verticals. opens content about in for up

in content So it. value partners a us for it real it’s terms Roku participating users, vehicle in our the and of for for for that creates

Regarding the our the as greatest off-platform our remains on where platform Roku about company Roku we primary syndication Channel, the focus Channel. have a advantages of

we greatest focus recipe a other see on so will the a it. explore the opportunity platforms, our the on reach, we free, Channel is company marketing primary especially and advantages, powerful where an as but data, platform to the to take AVOD have remains Our Roku tools, we where

Operator

Thank you.

comes Our KeyBanc. Patterson from with next Justin question

is Your line open.

Justin Patterson

you and much. opportunities other Thank how Great. very envision could the I you Thanks hoping get much. to point CPGs shopper this, has like was with been with a data on the program finer uptake road? How so out the there down many Kroger.

Anthony Wood

that? to Hey, take Scott, want do you

Scott Rosenberg

very I an us a enormous been that are ad taught strong Yeah. Well, has especially, an the much given in deal and scale our saw COVID category move deal category, for in The We of CPG Snyder’s, their willing consumers mentioned is we online. of on a to signaling course, shopping example, and spend. think are has of our how data. capable Kroger what letter as just return advertiser XXX% us terms shareholder for

We advertising. program have a our brands our lots bunch and The key leveraging are of of relationship a for with and is that platform first-party that market. customer It platform is big opportunities. there in now into as reach us and a

there So on fastest became is. of anticipate growing quarter, lots CPG in as vertical more the just we how that. an our come indicator much to potential

Operator

you. Thank

Our next with from question comes Helfstein Oppenheimer. Jason

Your open. line is Mr. is line open. Helfstein, your

Jason Helfstein

you. Thank

into detail? quarter. content outsized the a had So, Steve, value more an I can the you in of just you portion -- called recognize that you an mean, go bit you out lifetime distribution

a out if was some mean of kind part that I is the two kind because it. of because your actually letter something how just benefited, think then mean, become quarter feels I next the like Thanks. business? years? second us we gave a in what call mean, much in sizing, triggers those of could do with over also I letter, pattern, are, think but it just kind I of understand the meaningful it’s as the DraftKings, this the out years? help commentary maybe there strong And with of in you you next I OneView, think about how didn’t Q we about it kind mean, I the think I recall, over two but

Anthony Wood

the do Steve, take to you want question? Hey. first

Steve Louden

Sure. Hey, Yeah. Thanks for Jason. the question.

that types is view this of for models In the well. we deals as of we quarterly other similar terms deal do and that analysis content -- distribution or a

in -- the deals are the are accounting and are a the XXX valuing We or of content we distribution two. lifetime year deal generally

the business as strong so should demand the if the nascent pandemic kind we we or in in subscription also trends as we ad-supported of not case, there. days cases, that but services, with those in with acceleration movie or and has well only sales, is early some comfortable feel far. And are accounts, titles this TV trends, increased sustainable overall active time, QX, a are creating what sustained see understand of those in too reflect the negative. we rental out lockdown. consumer certainly, time, mentioned, that the increase trends for viewing just to seeing future -- are we very extrapolating more are At trying very is they what driven them into by better was can didn’t had player And notable titles But deal as strong whether periods. pretty that Anthony premium that decrease the level of positive and we those in were In obviously the whether

deal that was we models portion on those with well, quarterly and our is reflect lumpy you the the values because so reassess when lumpy portion periods deal so And of why in The only that in which -- impacted had not value, reflected future as can to be that the increasing these every current but results material that’s in case, current the that, in outsized certainly, this a for in is an of we what and results a increase but quarter. as quarter-to-quarter. can that be period an is reminder, deal increasing quarter, in assumptions

kind So, that, quarterly in a deal that part up down given it is again, but say can lot us, quarter process think go I the I or would of business, looking for same. at and of stay definitely a them model of of the the any

Scott Rosenberg

me a OneView. second It’s take great let your question. Jason, about the of part question

Roku. too me you, just Let here, me highlight -- opportunity in this for take for to frothy how parts without is just getting big it let an so --

So majority the platform. big publishers on the allows when we data course, But are fast the Roku are use are sales to enable and from elsewhere to be are media still growing, additional, an us access to are of as of marketer been on It other OTT the impressions in ecosystem they platform have sold that yet media ad the identity that as same buying but OneView by course, us buying not when accessed team. same by we they are they within our as Roku. enables significant to there of video Roku a outside way sold of Roku. OTT, us, in

user DSP appealing win in their relationship, of our view, customer OneView a make success These our we measurement, strongly the that in to ad things comes at to a is and opportunity very retarget products. in all OTT the marketing a course, on of as as TV in follow view, that’s desktop a challenges, our want a and marketer, device marketers omnichannel, strategy. online this scale, down, here and advanced then are OTT, who to desktop So any cases a and and in use then, is OTT reach in then there’s factors, cookie and user unique platform additional targeting platform and mobile. there’s of in through part view especially is really clients. them terms The our for challenges mobile reach tons in opportunity. first-party ID world that in significant And key think of a of and kind want two really The to of centerpiece right

Anthony Wood

Anthony. this Jason, is

my of ad even Let a of things. have add from would I majority linear is most that interesting couple thing vast we a me still television interesting just the in the the start the is say spend view, streaming though business, is the of not advertising point nice budgets in streaming. are -- fact towards. quarter advertisers they it’s things something a not of to it’s bigger allocating portion And seeing need was of in robust still that one increasingly their

lot it’s still all eventually still steaming well are because, a So switch through those going -- platforms opportunity, course, are to eventually there’s going ads all as of to to of and programmatic like we OneView. think they be

Operator

Thank you.

from comes question with next Forte Davidson. Our D.A. Thomas

is line open. Your

Thomas Forte

for Thanks Great. taking question. my

I wanted about the So ask to market. maturation of the AVOD

Roku its to and talked efforts. made the positive about AVOD the on market earnings about thought was real milestone TV its Channel the comments to you So call, and company adding that the a upfront. I for Fire Amazon Amazon changes very own

and the What for but I your in international they see did political for on things perform about what particular. the opportunity thoughts And particular, do on So AVOD, as quarter? AVOD wanted the are then your current you Thanks. maturation to, of talk AVOD? two opportunity how ads in in

Anthony Wood

So huge opportunity. -- AVOD say this I a obviously Anthony. just is that is will

But think Scott’s I to very best are questions. bullish equipped We answer on it. those

Scott Rosenberg

AVOD OTT vital Yeah. business to is I mean, model. the

subscription-based, see in some OTT, augmenting think hybrid I itself. that growth you maturation. though coming and it’s highlighted advertising. the fast they pace are are look if extremely are And very keeping revenue letter. they of them I new the the model Channel are market. question actually as maturation stats shareholder We We we reaching majority the mean an really of high You down a think but price through They still Roku as framed growing potential in I their business of the models. to at services and are

in as I to the that TV money budget they consumers much they think of experiences All environment looking services for more somewhat up going sign number OTT important. leave makes ad-supported they are are it ecosystem. pay have to say, just where a to the also the limited save

You asked participation a about in that -- we political a had category. strong

for It are to said, great a that newer ad advertising. us important tenant was capabilities big an certainly participate anywhere business. segment share as contribution really relatively large a a was a a business, of in younger for quarter key differentiator not But Our to a marketers. overall otherwise political close an modest us for our in, ad but to it segment,

Scott Rosenberg

say And then can words just -- international few on a that. I on

if what think is it our is of -- picture, done Well, replicate replicate big big of most So strategy? you is what a lot international it it to a just -- have we part by and what U.S., U.S. we layering accounts on scale, in actually is of internationally. reach we the And in well. as to the internationally started to just doing we focusing on options started then building as active and are monetization that’s

as phase the scale, nascent. options. we key still reach to on in on And pretty started, that markets we start So focused to will building then and it’s this layer in primarily we start scale monetization are but

SVOD our all example, then is Free pay it’s in is by very international the For in I fairly available mean, United dominant in overall and that’s popular the thinking almost AVOD. U.K. would say, in important available But Roku -- the Channel is business TV Canada. markets, pop model. I strategy. But AVOD about worldwide. is is And far States. the

Operator

Cannonball Thank Vasily our Research. Karasyov And from next comes you. with question

open. is line Your

Vasily Karasyov

Thank you.

So about been concerns about system. press Walmart hearing Comcast the reports some I have operating selling with TVs from investors

for year the Xfinity have But would from how feel cannot bit scare you. on then can does like one appreciate Thank your I Steve. view Flex. potentially last this the I a it little impact So or with you? And

Anthony Wood

Anthony. is This Sure.

or TV the are think business. OS as in software. we achieved competition Canada. States of very is there’s course, So companies now United we with in one, Roku And the companies one successful are marketplace and the that in dynamic number successful large a a we our large reasons we from the position tech TV TV the OS And few most despite itself, and well. have And OS intense just

best software a the particular. a allows has it platform TVs price in so lots We gives for advantages television. of pricing to them for platform It’s have that’s advantage. and entire less build It and ecosystem manufacturers, for built cost television. them It purpose-built the that -- for

So that’s the so big we part course we what advantage do. and software refine a we of -- continue But of that to do big is advantage.

thing is TV engineers. would I have other The world-class just we say

work great with a making for of base. engineers every talent have better our Those come streaming goal to We the customers. day

a and And for strong brand would a very a are the for stands -- have say, customers, team. it I then focused We great streaming Roku and the very itself engineering is brand and great value. Roku

in And we so been a market. believe TV reasons But been successful to we very time. going and OS maintain competing space. very then competitive It’s one competitive position. I for that streaming those are It’s a number are the we others, have and for long

will a is terms I just a a very words. say big In Walmart of Walmart, mean, Roku��s. strong retailer, partner few of I

Philips, TVs, with been them Roku them. Roku well for Hisense, branded, brand, We build sell have their of They build TCL, millions -- TVs great we that’s of growing for sell a extremely RCA, millions house and a that’s on help them. JVC. various is a smart players Roku business including TVs, We relationship Roku OEMs, They year. which

have put So and we it’s sure great and strong. partnership, that long-standing lot of it’s making work stays a a partnership it into a

Vasily Karasyov

revenue you. recognition. I a Steve, Thank right. question about have All OneView

a of of at recognizing the And that the on impact and quarter? it last going the you you an in an margin majority that, least that on the I then a call, said will increasing said it be think forward, you gross net on had on quarter you basis. proportion basis recognized

to that a segment. on QX QX from if and the Platform impact margin So I from wondering change was in there the was

Scott Rosenberg

that. for Yeah. Hey, Vasily. question Yeah. on the Yeah. Thanks

new integrating mentioned, operations I historical You are revenue the was revenue we Scott of, on agreements rebranding shifting a over as the were And to net treatment. to and were gross part of said what kind dataXu basis. mean parts, of as historical that people and are business OneView, and those which was service business, net the sort revenue effectively of treatment then right. business, I there a managed DSP which was the that two service dataXu typical kind

wasn’t business. platform So quarter. content a that the both of sequential year-over-year factor advertising both the largely on is expansion distribution just in strong an a or ongoing a of basis margins The in -- increase the was margin, a and process. gross significant result and the That

that client So more over will the the to as shift agreements. service we continue time existing of to continue trend over base new

Operator

Thank you.

next Fargo. comes Cahall Wells from Our question with Steven

open. is line Your

Steven Cahall

Thanks.

Thank using Just dive maybe us you DSPs? deals a for then think brand buys we ad And how something was to do you. like your might your upfront or some more be their at revenue as funnel extension do your buys hoc some some how of upfront you convert agencies customer own strategic? more wanted to how through give kind reach bit, campaigns about might to from color if between the inventory marketing these of and dataXu? ad to campaigns and the versus a point, wondering how I little at high-value self-service, much into And restricting that could is ad more revenue look is ad you reach somebody much extension

Anthony Wood

that? you want do to take Scott,

Scott Rosenberg

it’s have Well, I why a why to sell Steven, answer a want DSP. are we and also to It’s able third-party we that ways in we Yeah. to different those be media It’s got guess, the business question, Sure. we your buy. support to how marketers here the to all in us market. being serve segments allows on the participate want expanding ad who really DSPs keep of in buying to platform. buying And that

are and take third-party employ And buying all that value to they customer a our can demo-driven tech way segments comes proposition, a we through identity, optimize are to whether from do. first IO, are way through often They example, to to deep strongest Nielsen when for the wants the our they TV of media us buys first-party that us, on ad come guaranteed We ability in our which in cannot. data marketers advantage programmatic transacted OneView. relationship, marketer users, platform, our when those all of to many

scale play acquiring enable we long-term back are could Laura And transacted of question, made view regardless move they the to or and programmatically. assets will why take we leverage that years is OneView is to dataXu, so re-launching referencing in our advertising. out, marketers most incorporating Our TV that This to unique that’s is Martin’s how buying.

hope I that answers question. So your

second the your front. Steve revenue color take of maybe wants the part question on on think more to -- I the

Steve Louden

Steve. Yeah. It’s

the terms themselves. In when that’s models to of can There largely be business on related revenue the ads. ad recognition, we run the differences some in

particular within timing, it’s that? fairly question can there there So of straightforward. bit but a be a Was

Scott Rosenberg

to are Steve, question come think adults reachable you, But TV Cahall, is the extension reachable tossed reach platform? to need pay the we About TV are -- case? TV linear sorry. come I I simply from streaming. do not would ad There to marketers, they Is the a am just I linear to whole I XX no what television anymore. and to I clarification. other it within how longer are Steve for of was, ecosystem. consumers to Maybe -- some through starting XX say, and Those maybe think, or of it Roku strategy half your time Yeah. they just loss that reason for buys. moved classes primary are their users of has reach

ability, And typically in marketer budget those That assets the who retarget different user are add big product and the data a off-device. to significant marketers data social on They that’s help visit reaching a segment them outcomes. purchase, have the shopper screen. to keep seen line we deep a to an the our the site and then a and reach of budgets. us outcome a with optimizing them to television marketing, those have cart, to taking and growth campaign bottom-funnel them also desire at omnichannel into really they and on budgets course, brings client advantage have from performance DXC optimize OneView of is what said, are a the a come first fold run of to Roku we So the to outcome, ability

as as performance us. TV wouldn’t much It’s marketing dollars. call those So dollars I a for significant segment growth

Operator

you. Thank

Our Bazinet question from with next Jason comes Citi.

is line open. Your

Jason Bazinet

plays you pandemic letter, benefits question got up buy got think your much. on next right and streaming moderating side is the the guys out Thanks the will digital normal? linear power without you referenced this shift in you so of the gummed very as and that allow to sometimes do in you are you sort Do world secular through to or steps causing once big of you back some think moderate goes dollars My taking year how growth focused and TV trends the prudent do the their you investors a is with Thanks. all sort ad just ecosystem of be think COVID. should -- expectations deceleration? a The

Anthony Wood

that streaming. at whether point, options, a There’s are This has towards better things the From I there’s years money. of save you think, it trend is and I my get and now a to building on that’s point been really available big build, seeing a to think causing it’s nothing that’s we customer are Anthony. and what streaming to value, trend, lots be streaming a that for lot there’s continued The view, content. this more of to ability content is just of to by continue accelerate can’t

streaming than TV fact, more In on there is traditional pay content now. there’s

trend doesn’t over time because pandemic it’s So But stream and for continue I maybe that happening tipped everyone the and a think that bit. yet. will accelerate things anyway helped happen was some little certainly trend a some to

it going know, we seen but to Scott, I moderate think I little strong that? don’t want to add to think, have growth. did to a may are you I bit, growth continue So, see strong we and anything

Scott Rosenberg

Yeah.

was thinking going not linear think, XX%, decision Roku TV cord CMOs their drop and ad the up are I I we how COVID -- clear. the lasting XX% to was We are to did cutters COVID be a cord way in back. about back In durable Roku QX, to change satisfied are a it saw to with cut of mean, triggered in and go spend. planning aren’t very viewing, their marketers XX%

capabilities. to think to the enhanced And older We stay, really there, function. transfer one-way So follow audience I don’t stay they they need of isn’t the because spending this the patterns, into audience the OTT. marketers is because go a back

this flowing think $X There’s are way. I transition what million. not teach it that’s traditional stats, a spend advertisers our So all own to OTT there’s television, over more marketers in we XXX% see who is But back nearly a among these helping retention and better toolset really in is the robust TV. that budgets

Anthony Wood

think, how is streaming. are companies, another mean, media reorganizing I got, just I proof increasingly they around point I

Operator

you. And thank

with comes from Rand question Jeffrey Deutsche next Our Bank.

open. is line Your

Jeffrey Rand

and advertisers Hi. spend, spend? you the Congrats are back industries continues about good willingness on quarter. on certain How guys a as thinking seeing pandemic advertising to holding you are still

Anthony Wood

want you to do Scott, take that?

Scott Rosenberg

restaurants, mean, there segments, strength certainly, like ones we mentioned, as that. real The growing it segments But travel, are other are quickly you still as that I to might did. Yeah. return. some in I slow saw most quick-serve expect, things a CPG

are still shift, here the realization course, early, that to of And need big we has OTT. just COVID in the that, is helped proportionate think I the viewership. news reinvest accelerate the So to

that of in kinds television. in very transition the budgets is We in capturing But OTT. acceleration of are the the spending clear, ultimate the are spent nowhere of close cause to

Operator

Securities. question from Zgutowicz Mark Thank you. comes next with And our Rosenblatt

Your line open. is

Mark Zgutowicz

where X,XXX-foot that’s dynamics broader or your on seeing and political end, now? a on particularly Is you in that the -- and solutions Maybe have the little trending are guys. today? crowding linear any discussions trending did more is And horizon micro, a that loosen spend, buyers about flow today, October, out talking its buyers question is you XX,XXX-foot effect are nonpolitical bottleneck the obviously, a am what to in extent in about? essentially see linear would the where tangible higher bottleneck, discussion with there your that nice measurement more but I and pricing broader on linear talking the then Hi loosening on measurement

Anthony Wood

one. another that’s Scott,

Scott Rosenberg

Yeah.

in Let me question, the parts. measurement take

currency So is ago to one could in with demographic linear we provide our with years OTT. and measurement reasons platform enable the a so of across partnered invested marketers we common Nielsen and

already the with cutters followed we harder optimization linear that demographic -- ago. are specifically So We marketers, in continued would We OTT. capability using years with we we ability and to it that capability, measure in have linear. reached -- launched guarantee had we data, reached been to our not reach who followed add people across the with linear. year, This who to that cord holistically, that to reach to target and a if and somebody up charge and

think market I TV in television linear have currency, So from providing bridge been leader and a the common OTT. a we into frankly, advertisers with

happens simultaneous measurement stuff ad, OTT. start marketers so It think open on invest IAB native that and vast-based enables, any and really after up enables I kinds in platform a measurement. down of multiple given exciting an is to platform digital funnel. the OTT this the is

a not are world there’s currency. a headed where We single towards

in when OTT, I talk it’s harkening think, was people day back are challenges about one Sometimes a currency. measurement because they when to there

care and a be there’s asked towards because the choose headed will not tactic. be about, many and for all world fits the where question one currency you There then which be ad political more sizes about stronger that it will all are pick OTT a spend. they and currency. able We to their best markets will And shapes of most

pricing relatively new so particularly active our for category so And We very was Congressional energy an have it powerful or Presidential attractive think it’s huge business I like a and have earlier, portion was I to good advertisers. weren’t effect didn’t and overall meaningful a during our a mentioned on overall substantial As area cycle where said, political put wasn’t us. I it capabilities we last of That or dynamics. platform offers the a and into. other and

Operator

Capital. And our RBC question Mark Mahaney with you. from Thank next comes

open. is line Your

Mark Mahaney

Yeah.

Sorry, late. I came in little a

and and player you brief. in about rolling both revenue, be You can Thank so platform us revenue update in just you. may International, talked markets? player of are an both developing have international out you terms on platform already where give it,

Anthony Wood

touch just we obviously, streaming, summarize, examples. to Hey, And just Anthony. to about. streaming up in briefly, about in is that Streambar which Brazil, also TV example, launch I great am some a it is to in I’d is ago international for following and but U.K., Mark. Streambar, U.S., We new on from did introduced players happy in and and the but making player you super excited several a Brazil, which give basically opportunity the The product better makes your app off This also a the large introduced and that is on months Canada are that launched sound is be a our progress. phenomena, X-in-X TV product I will Mexico. start. international. We good we talk We

was And system doubled the one in in a for operating share. systems, good TV Roku been TV operating sales It’s player number like U.K., Canada. in player markets so the in number progress. which one quarter, while smart certain the U.S. in and sales Canada, in it’s doubled of now terms

there. -- well. use markets say other progress good as The States are in that then So the I us we working in would successful the as United them strengths made have

which international account the account great, strong we the that as If I our active to well. I But size year-over-year base growth given quarterly have growth, at there that came results, go active on. that you XX% account contributions of domestically, look were but thought incredible, was also, growth that to was mean,

focus on it’s on I monetization. to Our start active accounts first, priority scale and layering is said, build to like then --

So really, in still still, that primary is most scale focus. is markets, our

some small market. markets, in to starting we the are teams We got ad -- testing have

monetization and are the really We like markets have launched But on focusing we the and Canada Roku Channel in first. follow scale a few U.K. will

Operator

you. Thank

from LightShed. Richard Our Greenfield question with comes next

Your open. line is

Richard Greenfield

got One taking is for I big for Anthony. two. the picture question. a really Thanks Hi.

have and tied How to how companies whole mean are do the does it’s of that think of many last an many a challenge do money lot thing sports any have big to out this is much should You they right sports dollars have that key I so you but got to the them the bundle then partners, a figure channels, I for guess, DXC like sort coming of shift streaming, get existing one advise for up bundle. your parts a for have companies, should of these it one and of many of wave into And holding so Channel. media streaming. true sports advertising -- now The the is ad the ecosystem, biggest -- the it. I there’s Roku also they lot think you drivers years media would predicting been follow-up and ways not have model streaming how advice? multi-channel entire big I only economic sports they sports? seen sports to they on struggling about of world, sports and into as it’s

Anthony Wood

in. of I for like the said, all, streaming. sign sports I I in complicated sports Well, still hand, not think, you you have part wave first mean, XX-year am my get But if virtual there’s I I deals of thing would I I sure, MVPD for best service. see mean as think, products can multiyear, really deals, up up expert it’s usually. sports that’s -- regional you in sports and That’s could that’s, Sure. I mean way a à they -- to sign how an the bundle, I in to to start mean consume I carte services SVOD the la that well, for SVOD NFL basis. the up sports a SVOD networks what consumers streaming would or service be other an for streaming them selling as on and an world. sign want like think,

Scott Rosenberg

January we stats Great might Yeah. a Anthony’s interesting. just short their streaming that Yeah. on platform XX%. point. just Roku to grew answer dropped it, away their bridging fans have a Rich, And couple and I sports don’t find question. the of sports XX% sort but you coming September, will heavy for think linear of to and going add back, so viewing I

the sports we back, and as back, among in drop came even saw increase didn’t viewers, XX% streaming. So, in a come linear XX% a heavy NFL viewership

going of the the think, of viewership, streaming. vertical pressure come way I ultimately, the not disappearance the during are on And kind the that COVID same and to So sports back accelerated in the dollars long-term. in

Richard Greenfield

out. I to of it That’s are seeing they why what exactly like on impact we figure ratings, the in and have terms feel that’s

that appreciate answer. I So

talked of Scott, it Channel have about account relative about your The roughly metrics Roku released we look terms the per try household three so to per when before at -- the viewers, when sort fact in of three other think base. is that numbers the people you roughly active you one, people to you

how million or your roughly or from So need get Roku it to if I little almost XX% the of base XX XX% Roku it you That’s on do like, Roku XX% to do accounts. up people do that at reach to look Channel, you of active Roku like who the or What XX%, XX like, XXX%, Channel households bridge base million purely gap? content, of that watch awareness Channel. is is

Anthony Wood

But... think Scott add. can I

Scott Rosenberg

Yeah. Go ahead, Anthony.

Anthony Wood

was we out like started penetration, that’s XXX% goal, say getting just X,XXX what to with I been the obviously have going working I number, mean, to and more promote more Channel it, like we onboard we a we beginning. cycle more is that’s from more out big our very tiny, titles. on started get content, more we do promotion, we content, users. where of of pieces small this number advertisers, users, get then virtuous bigger content, get There’s Roku we get we

the bigger we -- it’s Roku app virtuous are that’s as so platform now. just and that result. and And cycle top on going the going growing right getting through bigger It’s a XX fastest

keep can I -- -- it’s So Channel. pretty can still compared to be. where can get it small It’s growing Roku the we confident am we

Richard Greenfield

or And thinking Reach hours. A used or best when and the watched that of minutes about top times metric? what’s way XX, is you say Anthony, that

Anthony Wood

Yeah. Both.

Steve Louden

Yeah. Yeah.

Richard Greenfield

Thank you both.

Steve Louden

Thank you.

Operator

Thank you.

Morgan Swinburne Stanley. Our Ben next question with comes from

Your line open. is

Ben Swinburne

afternoon. want Scott you you. there. I and about budgets you Good Thank social whether to share ask are taking think

earnings for opportunity would more a as a spend be onto be and platforms Some safe talked viewed cycle and could this brand or that Roku. are shift of peers is your like competitors, other it or seem in social have about huge that could

doing just I So just benefited your that the just math both. the platform to the versus color because those on And massive ask in I I you right, I of sort you deceleration don’t revenue if impact wanted guiding budgets any QX, the if you the kind so. Steve, or guidance wondering had there? that Thank growth XQ, mid-XXs are that further differentiating some quarter, digital then looking in out have on for just something that to there. even are am XXX you Is for of am focused you think platform of

Scott Rosenberg

Ben, of I that we to do will the budget. social able Hey. Yeah. for take I mean compete fundamentally I part first your think question. are

pocket the pricing have heard in we don’t is that social marketer we what’s the of pressure, know factors, which the So always going both platforms. from. money clearly because on exogenous drawing But

As well as compete has outcomes the I more fact to the are just the like importantly, that capabilities optimize mean to focused maybe, we these that TV have to on. never able there. been marketers

be top-funnel tap media, to to opportunity large just funnel, And it be interesting there. at than the the advertising a any well performance and a things very, segment, it’s all social is not both or There the to early, remain by the I still other TV, bottom make but while very opportunity to going Linear an a branding growing into media, for of very rich as ecosystem, why time. TV the in is is OTT also it ad about media is most way, our And to much our so budgets, media media going that’s overall has much very a isn’t that’s faster analog isn’t just out think, is one as just to business. going be branding performance both really marketing same digital. going OTT

Ben Swinburne

on you something quickly in platform connect able the for really cross back -- that performance? And mobile close to that to you performance, are follow-up Scott, advertisers Is tie to to how just are attribution? loop doing the

Scott Rosenberg

first-party both and third-party. Yes. It’s a of mix

a wide third-party partners. array attribution have We of

We according to optimize We that placed have pick us. OneView. can to our to the a provides target pixel their performance own so solution advertiser’s in a an pixel on can preferred marketer and website CPA, automatically marketers

Operator

Thank from…. you. comes question our last And

Anthony Wood

Ben… Hey, Yeah.

Operator

am I sorry.

Scott Rosenberg

question, that There on part a was two right?

Operator

sorry. am I

Anthony Wood

Yes.

quarter lumpy significant could look that would these for is, part didn’t second recognition about the of any revenue the formal to could I about content certainly, guidance. the in order, Ben’s color how question short-term. What of QX, platform revenue we external provide the there a quarter-to-quarter. just so terms some distribution we want Ben, Yeah, are talked the be there’s can deal impact But terms factors Operator, in on thinking about of gave in Sorry, any we of how the how good hit. to barring the that of say we just so I

factors talked of lapping services of kind came that year, last which the other mid-QX from as we The last acquisition, year. was of lapping we that some the are into results dataXu about well platform specific new are as QX specifically launches of

Operator

Bhattacharya Bank you. Ruplu America. of comes our Thank last with And question from

open. line is Your

Ruplu Bhattacharya

Hi. questions and my the on Thanks congrats quarter. for taking strong

squeeze can Just them two quick in. ones, if I

Is is load trending channel. just Are the one you about it that CPM, investors The that? on do load go Roku the talk reach have can the second there the down, question room you so is, a has address to your some as ad you how for with today? think Channel And Just the the job that is growth? happy great again, and you time, but thoughts over on of CPM can just maintain And if international the ad done can increasing think you on on channel. just Steve, that you expansion.

done a in have job great the U.S. You

look distribution internationally, When more market. at fragmented great got we a have You relationships. that’s

going how more you. relationships having then about we vein, that have Thank people the OpEx forward? you on are in So, who these ground to hire think should and

Anthony Wood

was So ad loads and CPM. I for on Scott TRC and first think actually question the

Scott Rosenberg

take first will that I Yeah. question.

strong experience, linear a great television. half load opportunities. consumer right providing between with quite think balance are it our of of We strikes happy the while the recipe monetization also We

are we that. to planning So tinker with not

lots and I of upside second well XX- think XX-second valuable as spots. beyond make potential there’s of how inventory in as terms we opportunities that

We with have units. the in ads done some and pause market other work ad

think So consumer I it’s delivered as great today. experience a

question, the rule funnel to just question, and television. media and to one That I ecosystem it inventory don’t to, common compete all higher and auction up say, ad you linear see said, does a the think is question your like content. a a interesting That’s about things of one singular I CPM into CPMs, in you just in so higher OTT to second the -- is part and long I relative performance media. command the it. better social don’t end product most about back different think CPMs Regarding reasonably think, to the marketers, prior platforms, don’t for a bottom them take think Anthony the users would with of in In I long-term was of across There think run, CPM all come going there’s OTT term I single top long lots all. OTT,

Anthony Wood

take Yeah. international question. I the can

that progress part frag are first fragmented not of a all, And into because it yet. Roku will I big so, say, good because -- -- yes, it just -- -- market more is a countries we was reiterate and those was internationally. making in fragmented As I would

we as lot Roku. of market portfolio assets, the are gaining so entered our and around the brought a consolidating and countries have we of market full share And

number and So TVs, small high. a now after Canada, it very our mean, player the is first and one for are for market country, one share we I we was went U.S. the into example, but

ad there. We team sales have an

to to view. of our international that well. U.S. So make areas is we strategic -- investment, for investment But Obviously, is content. We terms keep we mean, takes we look do the us. local expanding. we of lot we then starting it have focus -- way it’s that people it the our I sure in focus we our countries, which pick a key one And like

getting TV channels, hire lot market. We we players market. in audio to many to we deals. a local to into localization. requires make Roku local specific bring We people local do we cases, channels. the regulated content TV distribution bring retailer local our those. We of market, by local We So for are relationships, or government, so to products sure have But also our features that add required bring which

very products of solution. and and So we a the compelling whole offer bring just portfolio complete

share and that’s to market starts -- then grow. So our

we doing. that’s So are what

Operator

you. Thank

Anthony Wood

working It’s well.

Operator

call to Wood time, any Thank I’d Anthony for to like turn you. back the closing this Mr. At comments. over

Anthony Wood

like you, pleased results we I’d Operator. up two reiterating to are concluding and points. this Thank close with quarter’s wrap by with how

to growth First, rate reaching of reveals continued is XX pandemic the scale momentum. confident XX% shift traditional vast pay lose consumers. subscribers year-over-year pay providers that majority million for shift at away accelerating have TV traditional to the relative permanent to shows who be from I It Roku’s quarter. am the The active TV. accounts will during streaming Roku’s the

longer to business and joining may leverage for our deliver our you upcoming Second, execute over your illustrates safe streaming. Thanks holidays. of the model. call happy and we stay plan. our results strategic financial enjoy The I the of leverage the families our business term continue strength hope again as and of the model

Operator

concludes Ladies Thank conference call. for this today’s gentlemen, participation. and you your

You disconnect. may now day. Everyone a wonderful have

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