Roku (ROKU) 5 Aug 212021 Q2 Earnings call transcript

Company Profile

Participants

Conrad Grodd	Vice President of Investor Relations
Anthony Wood	Founder & Chief Executive Officer
Steve Louden	Chief Financial Officer
Scott Rosenberg	Senior Vice President of General Manager & Platform Business
Justin Patterson	KeyBanc
Shweta Khajuria	Evercore
Corey Carpenter	JPMorgan
Michael Nathanson	Moffitt Nathanson
Ruplu Bhattacharya	Bank of America
Steven Cahall	Wells Fargo
Jason Helfstein	Oppenheimer
Jason Bazinet	Citigroup

Call transcript

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Operator

Good day and thank you for standing by. Welcome to the Second Quarter 2021 Roku Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] And I would now like to hand the conference over to your speaker today, Mr. Conrad Grodd, Vice President of Investor Relations.

Conrad Grodd

you. Thank welcome quarter and earnings Roku's to afternoon, XXXX second call. Good Senior by on our Roku's Rosenberg, available Manager for the will joined business, Anthony our CFO; President, Platform of call Scott Q&A. Louden, I'm be Steve today Wood, who General CEO; Founder and Vice and are roku.com/investor. be Full the found details commentary Investor of shareholder our Relations and results in our at on letter, management website additional available which can

of of we'll call, comments projections, only which on industry. and in this your future predictions, as to conditions, disclaim management's obligation our and today Our looking statements about our as any or questions are impact on future market we events, reflects regarding such information. views this COVID-XX other statements On expectations and business make responses outlook, to financial statements other update regarding this forward call, continued the These statements. shareholder SEC statements involve could our uncertainties. results looking and from on factors shareholder on GAAP and Please cause call. measures expectations, for in comparable differ assumptions also discuss and that financial our letter current materially on these Reconciliations most forward non forecasts are letter. today's for information based in provided to our are refer financial our to risks filings measures certain periodic actual GAAP We'll

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

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

Anthony Wood

continue trend. is driven around to delivered performance shift am streaming enabler record strong the platform with Thank by to this you, second Conrad, long key and Roku was of and TV globe. Audiences for secular content in growth call. to term thanks a exceptional that Roku advertisers monetization. revenue pleased today's a their everyone report that joining I quarter

revenue both contributions This advertising time exceeded by distribution the first content for $X.X from driven platform billion and quarter significant activities.

effective merchandising services positioned consumer agency major great future. at note, With Steve. advertising tools. the over closed hand content let the platforms holding into call seeing me Also we direct well the seven recent a lean we We our are On all to are for upfronts of we companies. front, streaming to the with commitments that, and QX had

Steve Louden

In revenue, Thanks, profit continue and QX we financial outlook exceeded our Anthony. XXXX,, to EBITDA gross and operational significant for adjusted make progress. and

billion than in highlights were higher users XX.X in taking and hours through year-over-year to relatively XX% XX basis month million and representing XXX% XX% revenue. total $XXX.X of to XXXX was $XX.X accounts but then on Total year-over-year, XX% QX discuss active revenue year-over-year. net level flat the player price approach X.X of up of XX% segment given macro million Before of X% the outlook monetization levels as of COVID an questions, than XXXX. expected, a related I'll up revenue decrease XXXX, uncertainty. million. average QX We surge was the your our Roku increased stream of were $XXX.X increase current grew record to million. walk adds the pre selling in with by year-over-year nearly units QX Platform ARPU QX QX $XX.XX lower the trailing Platform quarter, year-over-year. in accelerated Sales year-over-year. pandemic quarter

the While driven in was pandemic demand following year-over-year flat spike player XXXX. relatively revenue QX

supply grew resulting entertainment higher publishers. and of are in to affecting margin, $XXX.X margin XXX% margin to component pricing. profit XX% by in more Platform of global which logistics media normal content mix lower to gross was was spend and gross XX%. favorable negative a margin issues, of than due million, toward metric financial Clear than year-over-year due gross key Our gross QX X% chain expected

EBITDA adjusted us approximately $X.X allowed revenue than with term cash And was expected strong in QX QX and up ended gross XXX investments. restricted short billion QX. profit performance cash, year-over-year. up million Our we million, and deliver XX% of of to $XXX.X better OpEx equivalents, a cash

similar provide quarter, outlook and few formal for Our quarters, the will the to term on next will the for but be guidance last additional longer our business. approach to view color

growth For outlook year-over-year quarter, million. and our third XX% year-over-year growth calls to gross million midpoint XX% at the for $XXX revenue the $XXX profit to

publishers of streaming, of adjusted the of content million drive the in over depreciation secular we and $XX of whose net and and $X TV quarter. growth at stock and will income a We based result million of EBIDTA to term. which believe growth to other is net the shift roughly amortization, the which of midpoint and comp expect This $XX includes viewers, million, advertisers income long growth $XX robust million continue

ahead of the the Looking to year. rest

offer observations. me three Let key

First, XXXX. we of to in half will comps our in across Due XXXX. take the of related tough business second the second half year-over-year pandemic outperformance

the comps And will streaming rates TV of continues. I and will as each secular intact. in within tough some our given we year active accounts will third, last spikes. hours from color position streaming on In these our strong towards shift demand face growth items. the remains We of streaming now year-over-year benefit the provide additional also trend as

year surge business, your segment. the year-over-year in player player tough comps the regarding the in in in platform In QX given expect comp we sales period. prior our tough First, particularly and

addition, the we're In managing the we're while player of assuming our year. increasing second gross half during actively margins chain, negative supply

XXXX second ad platform an revenue to the shifts half DTC our TV business. of premium in resulted exceptional to launch streaming mix our that Turning in period. during in platform multiple new with in combined growth of The budgets services the

create tough we growth. XXXX, expect the year-over-year in half of still will robust comps this second While

active and comp engagement. surge year-over-year related Second, pandemic regarding in accounts a XXXX, drove in and streaming tough accounts in active hours, lockdowns

contributors we to overall shrink sales For a Smart this and nearly from QX the for supply XXX% to XXXX as in TV example, OEMs active In in through XXXX year-over-year market hours in to XXXX surge on accounts XXXX. and player us respectively challenges. QX XX% basis, streaming growth. manage The streaming TV chain expect

that term positioned benefit TV streaming content has from Roku remain TV globe. Roku around to the regarding it's a ability shifting optimistic shift Third, of spend streaming the to very advertisers market remains leader strong long benefiting secular and been and advertising, our We the increases. in to streaming position, trends well audiences, enabling early over grow overall our we about of as ad seeing over how the today. the by the the to are turn of time, across the of let's business pleased momentum landscape monetization Roku. are With that, broader the with summarize it call Operator? the in size strong saying and given opportunity questions. the we significant has I'll stage benefits for performance streaming

Operator

Our comes Instructions] first KeyBanc. question [Operator Justin Patterson of from

Your line open. is

Justin Patterson

can. I Great, thank you. Two if

the were of sounds could upfronts? First some in more second, growth like ARPU about, we curious drivers that detail about half And unpack Thank growth healthy should then It please. trending the about to could hear there you think here you that you you. so upfront there, the new around from who's just the learnings before, strength second and more talk coming how that didn't have of year. advertisers

Operator

Thank you.

Shweta next Khajuria Evercore comes Our from question ISI. of

Your line open. is

Shweta Khajuria

analysts had a prior question. the think I

Anthony Wood

for thanks Yes, Hey, sorry, Justin, Anthony. I was This that. mute. on is

function But quarter, Scott both say Let groups, $X.X revenue turn was the to our of me revenue, me accounts revenue just in let the Steven platform you second. a in key know, in growth. platform you and billion driver record active over nicely in is that, ARPU, I'll know, it and a particular, of obviously, QX

to of that's in follow one of and a we're their So, services. the drivers. streaming consumer to ARPU viewers starting we're just advertisers new distributing streaming for in seeing merchandising, and direct the becoming launch great these seeing, platform services strong to promoting We're also interest those popular, all

are revenue Steve, growth contributing, to want anything platform overall to those our but, ARPU did about of both you drivers? add So

Steve Louden

Yes, sure.

prioritize ships, And media monetization. upfront. month follow three a to the ARPU can in in So strong talk been both budgets up sides, four basis over XX% competition, services, much our growth which had viewers Anthony strong or last we're strong accelerating has the mentioned, actually ARPU That's pretty start use on to really, increases follow advertising XX was their of shifted focus streaming seeing the viewer broad tools. as uptake, the that about is company base to the more just advertisers And legacy entertainment of every on well $XX. that's and was We quarter Scott ship quarters, now see. and has year-over-year. the ARPU drivers, DTT as over especially as in that and the great and this to media trailing

thing a QX. And notable mentioned we so that in was

up And the these and continues so things combination the monetization of just drive our to efforts. ARPU show the strength of

up to Scott to over it turn I'll talk fronts. the so about And

Scott Rosenberg

we months with TV was a it closed about Yes. season have Hey, last regarding us. several of transformative your traditional couple Justin, than for over it concurrent years We the upfront, the question pretty upfront networks. earlier

that's commitments has dollar I class agency holding is them terms think of couple indication their arrived and an things, that allocating the because citizen about brands way secular. seven one in it by as major than budgets, think with in basis, a a companies annual streaming all driven deals more first double this of is

it's us also the Over it's decline year-over-year. brands function brought yet coming to and ratings new follow steep It to the among marketers in advertisers significant XX% well Nielsen XX definitely our in especially Roku. performance urgency advertisers reported adults But by a upfront. resonated So that really advertisers audiences, of a out amidst first time increased role, upfront new declines, in the content pandemic uptick capabilities, a branded XX And content our view commitments. our committed content, with dollars of not ability as time data. offering stuff, who which platform, studio as offer our of our including exclusive were originals had upfront with in prominent brought of earlier ad and set to not our DSP, a as it scale with of this since our pretty played and season brand, the a well, our and one significant also XX% in just

So throughout Harbinger also pleased for question. the year the a the during overall, we'll we upfront we're it's good period. how did extremely Thanks perform for the and with how scatter think

Operator

Thank you.

Khajuria Our next question Evercore. is from Shweta of

Your is line open.

Shweta Khajuria

you. Okay, thank

of dollar the is Thank that. marketing spend Roku should then how way contribution how shift of the Let some in and over on two what's performance quantify channel think provide take you. impact context growth, and one size in you think of we on scale will that One could of about you and channel view? seeing and of do please. me terms the are is the the second And breakup with impact you Roku brand the any time,

Anthony Wood

Hey, Shweta, this Anthony. is

It's supported. product content. a this channel operated, ad and is successful Roku into better of free obviously definitely extremely revenue seeking streaming virtuous from doing out for very reinvesting advertisers benefiting primarily the that's viewers service better that's and and cycle the following that's owned It's us well. content, back On free viewers,

well, that's that. so ad great you of you fast. in virtuous the sorry, anything performance grows. And our could is how our add broken not business. do for growing it's extremely I'm add And that? source then to the know, for Steve, this that talk our size us affecting in a of Scott as there's about creating a doing No. terms marketing, big specifics we’ve revenue of it's want of to if inventory out. ad It's sure cycle driver P&L. us, And And of business

Scott Rosenberg

Roku it the been more leaps bounds Others about Shweta. that on it's it an Anthony's say quarter than and Hi comments tag Yes. growing channel CRC had and doubled. the amazing about

of and growing segments overall. supported faster AVOD, much terms even the than platform overall hours yet it's In year-over-year, streaming the

create units, prominence advertiser advertising, importance as And it's result, that increased we increased as innovate, on of true in our new but we're segment, experiences feasible a the place majority to, internally, a our tripled ad not call where are your advertising for a into party growth ads video so can ad just we Anthony time, performance where can is supply it year-over-year. question funnel about top that we taking segment it's third when alluded traditional our a over where advertising advertising, source TV on platform. With also way the channels is as new our placing brand still, nearly a performance regards to

advertisers, as seek fact So relationship, they performance, where a data, rich really coming of a strong. of outcomes when oriented social. investing can function the it's platform tech, the we deliver party ad they're first great that on it's customer kinds for outcome and search in the And that

new a traditional to brands case outside And some to smartwool, TV in adjunct those streaming the studies increase brand downloads. and combine And and headspace delivered, where both streaming budgets. of a our combining a desktop media strategy. site He's so mobile drove rates desktop competing, use we're of advertising got great strategy they very on two and like XXX% budgets And that's target there's visits, one of another the also two data view and to one mobile punch advertising case conversion bullish whole we're in used opportunity. to our segment that for across growth in XX% increase app up over both

and desktop ability outcome. it, to home. help they're screen So right examples place biggest party to a that that ads a using exploiting And tools in exactly the the are deliver the relationship there, studies we brands channel with on have fact together bigger they're it and you our on multi we've case intended then of two mobile basis where combining deep our got as first

a there traditional our opportunity performance just in dollars. bullish addition in ad very for step just competing advertising we’re the back segment on TV So to

Shweta Khajuria

Okay, Thanks, Anthony. thank you, Scott.

Operator

you. Thank

question next from Our of comes Corey Carpenter JPMorgan.

open. line Your is

Corey Carpenter

Great, thanks question. for the

Just gross And term? you going about talk want the to forward? then maybe given Steve how Thanks. response we impacting Does should this your your think Anthony for this the more know, aggressive? Steve to just margins, content thinking how near your you potentially far, it original for get platform specifically, long you around make thus strategy in content and about both maybe your maybe could informs and

Anthony Wood

Cory, this is Anthony.

primarily the license, newer licensing. more ad in of So goes back a number of as from the comes offering that reminder expensive that an Roku is that know, primarily both you a we got, customers content, make that and we supported as content. channel our to sort content just channel deep licensing well catalogue large partners, We've

and place that content the viewers the But and advertisers long in a invest grow, better So short of number scale to of also term and that better grows, as as whole range license, we're number term of of and there. there's we deals the platform able we're content. grows, in

it's a originals that So part portfolio are and portfolio. of approach, the

portfolio, benefits content You still know, of of the but source have great originals the they're well. as part licensing, as And is primary a had addition.

well. in sources. of good performance a them originals, we'll And we seeing both house, keep our both from purchase we're originals, So with bought also, And liquidity, investing quickly. then we this originals old variety as

Kevin of You to know, for the example, we that model. of for harder. goal the overall works we an terms us just that recently [X:XX:XX] [X:XX:XX] And but maintain business originals renewed like purchased, in AVOD some is a business model

the shouldn't you channel, originals on gross margin into we have from the any so portfolio same, the expanding we're And Because that overall margins. our internally. impact on same maintaining structure see the Roku

other a advantage The originals the there's of of course, effect. halo is,

Roku for upfront the So channel the new helpful with And bringing it's our as advertising helpful into customers is with helpful business. well. in

anything, So don't you Steve, [X:XX:XX]. wanted I add to know, if or

Steve Louden

new guess I'll marks. the all hit need you CFO I to think I gig. No, find a

Operator

Thank you.

question Nathanson comes Michael of from next Nathanson. Moffitt Our

is open. Your line

Michael Nathanson

for I you. have one Thanks, everyone.

on he a Anthony So the for computing more about CEO to asked make got question you platform. to know call, Android Alphabet I described Pichai of TV wanting TV. Android I vision their Sundar a And you.

so to Google Sounds was Thanks. you're how want to tell you, press answer a is what broadly, to release of reached, Steve bring you that not closer the guys the resolution channel, going for like a ecosystem. or in haven't have us question the it with your a to people to hopefully gaming whether back So quick any And you that's they that. compare me. robust do. vision And from to you And then said far? include wonder, Roku number YouTube. number it I wants really is in usually [X:XX:XX]

Anthony Wood

Hey, Michael, a you Steve. thanks. got for I'm question glad

Let's see.

the compete whereas Android, and with they the know, operating built in take you been compete and So, ported TV, difference platform specifically for beginning, system, our we including primary And competing it for we way their our a as vision. software well. in started, TVs. from since Google we the companies, designed Google phone, We've we to extremely versus large space they

it's purpose Roku if effective. So on won look of in at up you Android on new computing whether have for of PCs, on more built, always a environment, user because, TVs, platforms, windows or something the business when operating share. market it's systems build terms history or And just you traditionally phones, from ground the it's for models, new

streaming our US worked where source know, so we us and advantage And the purpose of that's of come And really kind And the we're extremely advantages from. a the pretty wide margin. accrue has a you one those the number it's platform. built really well well, having platform historically, compete working that from it's competitive by for in

a cost how for TVs to the example, terms is build the is share, sell the really structure of for. than much of very competitors. price price you the cost super And, TV chips are So into smaller important. we've market platform because lot in TV and put effort software memory and important you less can with know, our our making competitive, run a TV of it it affects

others, entire the now, pricing, although And is it's than the suffering our chips because in competitors for us and products, from supply for impacting chain and right related the the less increases so memory of shortage example issues we all less example. industry use than

maintain being only vision licensed on operating system leader operating think most that for That's So, the TVs and focused I a the net, do. TV. building is are what not built that by we'll very purpose that system our we are we leadership

But have situation. the that provide [X:XX:XX]. information get take to one. a Yes, see to on back really make Scott of YouTube don't new So YouTube, that let I'll question. to question We in sure terms let's I'll answer

a a this as dictate or a behaviors that harm just dispute. Google, know, the your others want pretty you to it is search our not don't software competitiveness are we're to take on to would a good have your own Steve We not for seeking consumers try with agree asks, other think to We're platforms, more changes of this platform hardware, and require working data. access We that's we in or money reasonable and reminder, to make these in relationship. we and You available carriage part fair resolve our and competing don't or but economics to do including not Roku Google Roku Chromecast, today. question. resolution want way

Steve Louden

said, the because question ironic, of there, that's Yes, the doubled the of best particularly TRC my I'll streaming hit year-over-year great. update Scott TRC why is Yes, kind didn't reach, milestone. continues in didn't hours TRC more as that others a Scott we different It reaches which a that. to grow number. We nicely, of And didn't again, reach terms impression add do here. we

the be advertisers, more more engagement, about So And, in which growth. increase scale and to content, good, flywheel in which more fuel drives thing more we right, continued invest us very originals, well. in the more Roku just the continues to do then to continues general TRC turn talked driving other content, to and mention gives here, money in content

reach the So happy growth that we're of with TRC. very and

Operator

you. Thank

from next America. question Bank of Ruplu comes Our Bhattacharya,

Your open. line is

Ruplu Bhattacharya

Hi, account growth the for first taking my have relates expansion. active questions. one international thanks and to I two,

year, active groove strong Roku account you think I had XX.Xmillion. last So accounts growth active

but this time, of for sort So same at tough you're that's the internationally. a expanding year, compare

from next the So should this overall, targeting? level reasonable And UK measure penetration can a like and in come growth do we sense year you expansion? this success markets expect that of And key that how year a and international much Brazil you're expansion? have account how do of you for in year your what's over international active

Anthony Wood

is I in back on there's we grow just I'll it's I'll to countries, increasing existing to expansion. is most the terms internationally come take Anthony, I that And we terms of that. by room US This room streaming to accounts, also there's even mean, a more grow in US. other obviously, way of grow as the accounts. our still business. of international active The global accounts. active not in mean, monetization the ahead And grow,

You subscription are company like our know, between basis, and in investing much that and a as active Roku active to is as services, per growing monetization a just service, growing big subscription building revenue. the accounts customer we on directly accounts. Roku is on correlate a a difference

to big I of a that'll actually, grow mean, and States, of there's tremendous accounts. room amount a growth like in so and continue And as places active United as well driver ARPU, to be

In terms globally. accounts active growing of

the the we and is success active operating the to our of in then with using You That market starting accounts. same. are well on accounts, for players internationally Well, us, and streaming for we're active system licensing which to those seeing the is those our we're accounts users, And there. us to on monetizing see, US, definitely coming terms our manufacturers model building is and worked way in know, selling working is to strategy business we're Both focused through those building well, users. building are TV TVs. active engaging focus Roku

So for in we one are Canada. example, number operating the system already

in that TV the UK, are star UK number Roku reviews. selling getting TCL You TV with increasing TCL, review. is bring got Brazil, in just of that excellent well things are the know, a launched in OEMs and and Roku five we just Mexico, new It in going the TVs TV

Germany going we'll scenes in well. as well. just that launching that's So be And products then we announced

So, that to in you out reasons in. deeper we're and to build know, already ran reasons we're going go continue that the

Ruplu Bhattacharya

to that from about the just talk is programs it a How many Okay, up, the reception having benefit details far? or Maybe quantify producing? That's that my of you now? thanks studio revenue use type way are for is this the there that. helpful. advertisers commercials I like what of overall making it for you seen brand Can you you've Anthony. ask follow all wanted new studio to And have. and so about on

Anthony Wood

to about the talk brand want Sure. studio? you Scott,

Scott Rosenberg

that. Thanks the take for question. I’ll Yes,

could is with we example, team into revenue that looking for have been we couple acquired form of or reach for ability that invest some advertisers supersize we to now. viewer ad that advertisers. supported Earlier there breakout indirect not of that One that primarily things. this being So execution, that But innovations come us to isn't sponsored produce by your going may doing they're that or effect, experience. ad sponsorships watch stream, and that who effect, also executions, a would relative And go a an to question upsize is content years and and other double brands and with free measure really to also they're produce driven TV. question. our target the screen brands, One I so would that for answer executions of year, streaming traditional just benefits in they're advertising optimize a partnership in say some to all going by several got Netflix session is, to of the home be new off were a [X:XX:XX] but with it's

the hit kind that's totally show, And bigger casual that we well, the aligned a we it's Roku And so aim consumer performing think a Show show weekly from fun we're right comedian and sponsor their kind Door there. to experience horrible review Mark brand. quick where be it's highly top bunch for that's the athletes Randall Roku last in a valuable Maker's production a still kind just start a mixes conversation. and and for Mark I might recommends you a at well. brings the our format, We, that's expect early down where know, friends week, produce. We of of is exactly then with The Roku, thing something called of of for also shows it's in he topical that perfect is, cocktail sponsor shows Next fit featuring our up, that middle launch Maker's who five able show the exercise. production, was that's launched of Walmart consumers, very of A Park But extremely with to going production experience,

or about because know, deal has impact, is of effect, reinforces in it you it brings brands, our their which the often but it agency. lot himself economic client the it's about because the halo to direct a has it. also opposed progress I'd say often studio herself with overall, CMO, So what execution excited brand bigger, is the ad the brands execution, great as originates sizes today. makes But the who out a pure it client, relationships, driving We're creative media direct a of

Ruplu Bhattacharya

Okay, details. thanks for all Appreciate it. the

Operator

you. Thank

question next from Fargo. Wells Our Steven Cahall of comes

Your line is open.

Steven Cahall

was ours and if into ARPU a we bit. dive I Thanks. could wondering little

hours coming think Is trend bit skewed about if last quarter talk the day I there that's there. It's more wondering could ‘XX. obviously, what ahead pandemic just a So streaming the quarters little But the so below really was per the account X.X about per a things in flip in four side unpacking be might if of the And ARPU, the last was I quarters. or you be bit the was their it headwind would little four Is I the then per more, cable sports for about strong year-on-year, XX% you, per streaming which the a just account. hours up that account back? folks helpful. box are live in a using maybe mix of have really is so quarter, the

that's then going are or up, strong. there's Roku so channel more says And an watching, effective more really me if some CPM there, on are pricing to US know, either going dollars or you that no that people

trends unpack you. us could you would help Thank be in helpful. that bit little just maybe a ARPU So the

Anthony Wood

television the decline the and Because saw Well, this variability the industry is hours, around viewership. overall Anthony, in we right. in pandemic year-over-year year-over-year of terms of that saw all screaming stats, saw XX% you're

XX%. up was viewing Our

down there was streaming streaming But yet. streaming, XXX% big of very So to the percent and streaming still is this to even But it's advertisers down the compares transition overall of happy that. the all I happening. moving know, a ahead you it's we're favorably couple is think was that and industry. terms viewers, with a streaming middle as picture for platforms not well we're industry whole where That for in moving in just the We're hours. of me

If if to year you stat, you I is from at XX that's interesting Nielsen look XX olds, is look, one streaming. of think their that TV watching XX%

this streaming. means the move And that's TV. going TV that is to of still, to So, majority traditional all

TV on combination know, cutters are You viewers traditional well subscriptions, people and that obviously. streaming, our pay of as cord as have a

a So, our and to summary, the market in peers. in I relative quarter performed there's say, lot just we well grow And would still. to of the room

I touch or ARPU, Scott on if you want that. don't Steve, of know, terms In to

Scott Rosenberg

This I'll on ARPU. let comment to about I to is Scott, just wanted streaming about talk Steve But hours. your tag

know, way this I says as in the TV to At TV, a we traditional of think we end, slowdown share. more in and secular that grew took trend You think was while the the right [X:XX:XX]. about

we grew, we share. So took

other was household The US hours of average thing about think to about TV is seven viewing the today.

other we're is only going to half So the to and XX% completely around go streaming.

that out ARPU the share. So a half Steve, anything to interpret than address secular for and on pandemic. in whole people the you getting Roku, other question? And year good a I want transition wouldn't the is this we as after because

Steve Louden

sure. Yes,

Just on the ARPU.

days. indicator that quarterly basis month to monetization great growth streaming XX% ARPU the way, still world accelerating, a that quoted early You trailing basis, year-over-year which either a moving is the is XX% on it's year-over-year, and in XX that is

that are strong. behind are about truth demographic well sad about you the streaming, the budgets advertising And You being viewing is the to that, XX% talks know, levels of is, viewership Anthony right. key know,

only but of fan, viewers pandemic, now they've for know, the in you higher and sort their you mixing they're a fact the And focus kind of that so, Because on into terms on of to streaming not demonstrating the held are you other a that's watching, ROI streaming. new know, found where also can do which increasingly standard platforms. with TV Roku

grown, the much pretty side, that's indicator, a front. a all had services. that, where that impression. we have And, right, you So important on you of dollars than focus Roku the year-over-year monetize advertising been media driving tremendously, the know, Legacy Also growing business positive what's video we quarter another companies moving look an them a advertising on distinction that's doubled more you over, competition has service know, in has DTC on when at ad

drive there's our entertainment media tools, Roku tools increasing so to and engagement on services. help And and use viewership of their

And monetization. so another increasing the that's thing that's

with scale that those of you happy leading favors trends middle trends. given a in very kind that that shift. we're know, of our industry beneficiary And of So Roku our will be those tools, in

Operator

you. Thank

next Patil question [Ph]. Our SIG from comes of Shyam

Your line is open.

Unidentified Analyst

you. had couple I questions. I guys, had one Hey, Steve, a for of

just sequential and hours, talked on You you lot know, wondering to I year-over-year basis. a you about basis. could kind to a on them was if active accounts streaming talk a talk of

conversations Maybe Just be know, you there might in externally? continue for a tailwind and lot areas a accounts seems impacted XQ digital in that's advertising easier overall, should if the wondering that, to of growth active that's with of be we then just privacy or much? see in so but it one broader not becoming question, that consideration how And XQ? sequentially And CTV modeling changes that a for like advertisers. is, if by just

pronounced forward? if to right know, going more now, you. expect Thank become You you and that

Anthony Wood

you want for the take and to that over Steve's maybe to it do turn privacy question. Scott

Steve Louden

P&L, Good demand the got quarter. European of metrics not in kind year, also we Yes. comps, active certain mentioned as the the we've some remarks on engagement my asked and about, depending only account, parts on certainly, challenging question prepared streaming the given key pandemic but on you that the surge Sure. operating hours and those in letter of on last in

I pre is short So metrics those levels in it COVID informative looking to the at sequentially, probably term. do looking think, at more relative

X.X as know, with XX QX favorable you last we up in expected accounts million. QX below over XXXX. comparison what the base QX and active the accounts, starting it's million active by we That's so demand, the active given in grew in the increase account surge but And to grew

good So there. I comp think that's a

level. per In day, in formerly is again favorable X.X, COVID X.X kind call, terms pre the slightly of which the or streaming similar, of mentioned of hours line streaming account hours at earlier kind in the as per to we're

have that's as to things I think I would meant of might XXXX. more we Again, kind to expect apologies, we So, normal. get QX said where I XXXX, be back

anyway, that. clairvoyant a not But back soothsayer, I'm So to [X:XX:XX].

of ahead we and an or another putting macro understanding in for at those looking look us perspective. it quarters, up for open uncertainty few Scott levels, think now certainly variant back to the least comparisons hold, levels I'll other very here interim, Delta back think as over a I is I COVID So and instructive challenged the I year-over-year still lot environment the are a here the important But think around in around step. of a is And probably taking pre the in looking piece. recovery the there's economy the COVID at that turn kind bit pre

Scott Rosenberg

What Yes, privacy Shyam, independent that it take more for tech. is say for environment a ad marketers question. definitely is let challenging the I'd me

precisely platforms consumer and tech it's drive we can For know impact. advantage when consumers, but direct I like like with who first target party to that data advantage small make onboard direct Apple independent got more make data, for party for as our would who've have case a as an relationship, their we get as more our marketer of not more measure that device IDs as cookies consumer entities make first a publishers harder a use generally, CTV that don't moves don't relationship, rather a a regulators Roku That's to strongest for ad can benefit harder who characterize or companies we access. for relationship. the services scarce consumer tailwind working not have

that that we've say less relative consumer privilege, definitely direct would effective those I got. entities relationship of we're So to because this

Unidentified Analyst

guys. you, Great, thank

Operator

you. Thank

of Capital. from question next Our comes Loop [X:XX:XX]

open. line Your is

Unidentified Analyst

much in was revenues XXX much we're little the of the how companies Thank percent aggregate if or question. how to the getting streaming of the growth the the wondering data Thanks as streamers? down how could from more I plus on for growing drill from streaming quickly coming any you. you bit platform companies, just a are

Scott Rosenberg

business. both it on strong to performance a quarter owes platform robust business. had the activities for of very, the And very we Yes, the content advertising and

streaming still early taking their it of growth. most big are in our service it in relatively As parts, providers

us scale, So and they're heavily our heavily. acquire acquiring They're consumers, and to tools marketing advantage investing still our of taking users. with

saw not selling in which relationships, revenue the just derived from strength and of products in marketing, entertainment the purchases in So providers, media investments tripled buttons, those our terms definitely than good year-over-year. particular, content business. shares their that our more marketing we is We're but of of vertical to we also advertising segment

overall strength to had strong well large our was we also large we traditional a segment advertisers. what more well, question there's from growth, Fortune earlier performance we're or smaller advertising call, part the quarter year-over-year. for is call strong a still So very, strength very very which segment, in advertising as type business tripled, with tripled there a XXX but also really our or nearly us, customer that from as category great And ad seeing than of

that say just our I the content across and was M&A So, but particularly especially the the vertical restraints board, broadly, robust segment.

Anthony Wood

to also there's businesses to would I that a like Anthony, potential those would the distribution advertising just content from lot room say areas, still is so I grow. is of compared This and both add I and that that you would early from, relatively But to experimental a is who's both like day, their the customers know, all [X:XX:XX] recently kind about switched of point that in to day see. of great in is gratifying this attitudes of to it have those someone of thinking view characterize

Unidentified Analyst

Thanks.

Operator

you. Thank

Oppenheimer. comes Helfstein Jason question next of from Our

is line Your open.

Jason Helfstein

I there's talk balancing you drive But mean, of for channel, get active content dollars hours, Roku kind I'm it's and obviously in increased drive and down. your focus just So, I counterbalance purchase between clearly, the and the hours, presumably can more then you you more that. of maybe kind change going ability that to about to accounts the on guess any slow

you about comment slow, again, want driving any with in monetizing? like, Olympics XXX have a the XXX just much still you maybe was kind first active then how quarter, less the third see on, accounts if don't you So there will you were more ask did then to anybody thoughts as of, and maybe about impact. even impact to And quarter? I the last, question? talk hours too relative or how I

Anthony Wood

in to TV. watch would I it get at we've going in for start to hit to TV, all be there's with for market first if jump of their that. discussion. TVs. active me think mean, around just accounts. for and household. the a billion proxy those broadband, look streaming the their households huge. a are a is all which the XXX Let then they're way just XX of ultimately But I have world time on you prime active Steve say And is accounts, embedded potential mean, households I over they're, And that going I all can million will transition

is doing markets smart And real the one, so you well. we're the know, extremely one, TVs, in share and number number the question for US, we're and we're market were the entering, then

So to hours. core to I cost active would we for of our competency accounts say it's that a It’s ability drive potential the build continue in lot out. of terms

viewers finding screen home trusted So of content experiences of you our goals a help content our partner watch and with they one content. and the really know, be influence primary it's to find consumers

of important content. example, have find we And And and view that. help we viewers is so that we good so a ability I it think actually our lot a do to

home example, start, Olympics? I getting well. and use just how doing do doing is of for I to as the working NBC months so a watch the easy lot make the Olympics, just the extremely to spent way prior serves to we happening? an And to is find get with build six with and a Olympics it so viewers Olympic to help when out screen, How our our do content, find out the Olympics, What's viewers into highlights for that

that ways decide the and what them then we So you helps with more answer become you there's Hopefully our become viewers know, like that, important helping lots where Steve? want watch. just and of can more trusted question to to XXX,

Steve Louden

a Thank assumptions. we Nothing with our question. note everyone, Jason, we on alive at this our portfolio keeping models, related Yes, tradition update that look for a XXX the deal have for of reminder you particular quarter XXX material a we as every XXX quarter Steve.

in model. on changed know, terms it's where case or the new a we the same. In other up, be standard the have or kind large in portfolio. that some factor assumption and go a would models talk And quarter, down, update services know, deal a go stayed a we impacts, create a produce, their specific of that quarters we the a if that models change quarter had then model have across the know, you've you in you usually relatively deal deal or where XXX values new You some to that many about deal we have created increase

is of to so And nothing note. particular one where quarter this there's kind

Anthony Wood

the affecting QX? Steve, also address Olympics about question do want you to

Steve Louden

it. I can take

Anthony Wood

Scott. Okay,

Scott Rosenberg

really provide in a you to we're Anthony said, drive affects Steve? will And of increase proud on have that I within look, is together Well, my things is Olympics generally, But to it been really think can do XX/X key right. it's TV it drivers consumption we execution as viewership viewing. kinds how household. the I want in thing All Unless NBC. overall think certainly the of you our It's indicative uniquely know, Roku of streaming. and see

Operator

Thank you.

Jason comes Citi. question from of next Bazinet Our

open. is line Your

Jason Bazinet

supply margins issues and acute, opposed player to ripple there other gross metric account and over the words, I wonder, it care thanks. and future. sort for affect that about, guys affects the impacting you gets is so will as a shortage that people because? chip any how Sure, of to just chain out called in scope active continue Thank growth? In actually the shortages because

Anthony Wood

Yes.

to that, take want You Steve?

Steve Louden

Yes, sure.

the the issues, pandemic know, job you seen component really slides our a have team those started, gain time, Roku shortages, issue. Certainly, given mentioned, quarter which on would So in gross been minimizing you last said, to margin mean, think especially part In of per dealing know, Gross with recently, the go good is component in increase over margin player cost our an this industry quarter, the accelerate did of increases, in done impacts. back and was half. operations chain supply certainly, I has industry have as price negative, terms our the and since will we we certainly, that that thought it increases, we call, outlook, that that X%. player we the negative the the

on competitors TV also So side, the player this side. on impacting is but only us, not the but

market know, the TV So certainly you the many you sales low elasticity. and increases those you those price TV, go research going TV some a down surge that OEMs last year-over-year, they're know, cost price business are pushing margin industry increases into that because strong to firms number, are is the in Smart that of there's year, are TV Roku, those increase, whether forward know, testing assuming

driving So, sales certainly forward and in that in. these kinds industry in help do so of terms of player TV factoring not conditions something we're that the that is

Jason Bazinet

thank Okay, you.

Operator

from the comes question last the line of And [X:XX:XX].

Your line open. is

Unidentified Analyst

Hi, thanks question. the for taking

sort get over sort to It that? Roku, without lot. spending and last being And out done like years? call, streaming of only of sort are their for nobody streaming whole that on seeing platform. think gets next seems they're we the whether out. on world deals we are Thanks. sort of be the years. acquire by able sort and were lot pushing not then called one topic of I evidenced in Twitter spelt investor to world. topic. you're on being store spending of a subscription spending mean, I the different it all of When gatekeeper, think mean, How do for the a a that like, sustainability the think platforms be of guess you spending was Curious wondering thinking think do challenging? to how know, the fee Roku, your I'm the You a of, able a questions, about use you conference terms on you that's this a It we're can couple revenue, of to think were I word you more you more how investors two as sort one call you ultimately of of did streaming for amount John get sustained of to entertainment And in I about over become a, repeatable Malone's to the seeing curious, subs? to world or the couple fee on Or tremendous more sort like of being more letter. usage as media on. of sort and can to going of relate I'm of in this much a that about

Anthony Wood

great not hesitant Rick in I word we wouldn't hear characterize that consumers have you from least. but competitive Hey, not huge and [ph], competitors. mean, a loud. to choice, so say forth. industry, they I'm gatekeeper. to of exist as us I you. even have Amazon, choice And a Last but lots Samsung, of know, we very Google, Roku, of just big, lots have out

our ability competitive it's compete, So we're very but industry. a confident to

value we of, of it when how more good win-win like do it. think participate access structuring we that's that a in do think in them content and to to a achieve people's that I economics in result not help How customers of as basis, We charging deals that lot it? distributing for we're by focused In type engagement? mean, about increase build terms variety services about participating it, build way a in situation, type Roku, success the we at the on of And base, table. and we the really being partnership bringing viewers streaming from just deal. and a so, customer And subscription watching

our the a the to very viewers hugely on. it. about businesses, to I large advertising I ads And M&A it's And streaming. streaming, switch mean part huge we think kind So focused then side. that's a how that that's business are of moving all on guess obviously we're is of

going that's keep and growing. to So

any I So if don't answers. had know or Steve you Scott, if specific other

Scott Rosenberg

I Anthony retaining It's to ongoing as acquiring them also just these global frame just market. not about suggests and highlighted, a a retention ability shifting alongside especially of user. acquisition, user, these big, the a just exercise. kind It's critical. would the not but and just add is services just done an relationship. also The Scott. But suggestion is It's about earn of to question get Rich, as a success one of term to this our Great a gatekeeper Yes, services that. user

in where services. with to in I services there's heavy partner am yes, a so we're to continue their think do and very, but phase that investment, potential, drive viewership retain And term I very long these on to bullish also the

Unidentified Analyst

growth that's Is comment you you acquisition doesn't way revenue how platform any of robust about way reengagement much sub think the versus that probably Scott, reengagement that sort the from that incredible made that the get about growth? When there overall an spend was substantially any is Is versus like, spend. that to outpacing I think spend there think about enough acquisition? user point of coming focus. when the

Scott Rosenberg

I'll modest, very in need user But most the Well, becomes are still say, it's math. run relatively service it you acquisition of critical much these to mode. look, still providers as

users replace and lose subs, XX you X% of lost. to monthly hit you you If users your users just million got XXX,XXX what that's acquire to the you've

focus are partners about that It's of to an the bringing more can keep just Olympics I is problem, some our this it. you So know, couple times, like for coming certainly area that, get to we service. that service, just in help. talked the scale think We've the the where back and the seeing them value here executions the execution a it's sign don't up but get to user

got bringing to to we're critical more user a we working, predict that partners. there, are to they what's set tool help great engage don't churn when and service. hits, cancel attention monthly to to we've predict, the our it and So bill with are going That's we content

Unidentified Analyst

streaming to TV. survive? more we And sign the or seeing I that. one a much. I've was willing you and know to for think question, think one services up versus sign big But answer about will been last you they're for will to interested There all money my in spending I what services. streaming How Thank the many consumers services of streaming surprised a still pay guess survive? very those comment on we're know save services than these multiple consumers I up is multiple don't about, do little I just two willingness think

Scott Rosenberg

is PayTV expensive.

Unidentified Analyst

Indeed.

Scott Rosenberg

very good. not And

Unidentified Analyst

That that an rich editorial. Thanks, was a opinion. Anthony. Sorry, was

Operator

I Thank will you. to now remarks. Anthony back for closing Wood the And call over any turn

Anthony Wood

trends to us like I employees, continue and the and for excellent secular competitive an today. driven We our customers to our believe our joining have thank broad partners position success. Thanks for advantages would us quarter. growth for

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