Roku (ROKU) 4 Nov 212021 Q3 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
Mark Zgutowicz	Rosenblatt Securities
Shweta Khajuria	Evercore ISI
Michael Morris	Guggenheim
Vasily Karasyov	Cannonball Research
Ben Swinburne	Morgan Stanley
Laura Martin	Needham
Thomas Forte	D.A. Davidson
Tim Nollen	Macquarie
Ralph Schackart	William Blair
Matthew Thornton	Truist Securities
Jeffrey Rand	Deutsche Bank

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

[Abrupt Start] gentlemen and welcome to the Third Quarter 2021 Roku Earnings Conference Call. [Operator Instructions] As a reminder today's call is being recorded. [Operator Instructions] I would now like to hand the conference over to your host today; Conrad Grodd, Vice President Investor Relations. Please go ahead.

Conrad Grodd

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

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

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

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

Anthony Wood

growth. monetization continued quarter In to highlight to today's side of of thanks like themes. tremendous joining now major of strong with to I'd and surpassing progress make call. Conrad business ARPU QX the $XX. we Thanks three for our delivered another The milestone revenue everyone

common platform TV stakeholders Roku's the is First, advertisers a and ever. than bring together ecosystem the these to to important role publishers shift of to at on content streaming. consumers continue center more

engagement We've the this streaming turn system lot capabilities Second, Steve. streaming. scale, a signing that me to of offer. been for as effective and and for content our And efficient have products positioned partners operating best that slow TV made these over successful and increasing follow up to advantage our are purpose-built content with business close. let that's and and The into we Roku attrition. first-party investments uniquely to benefit a services tools viewers strong taking customers, effort grow scale new gap as term. well the technology very brand to With And building publishers customer position our whether or to content long as relationships with of is platform and promoting begins is are we put that to want gap tools still customer make continue significant us for well TV, large the for in our to continue it is to have third, a advertisers as reducing of we a there set

Steve Louden

Thanks Anthony.

our take quarter the walk QX forward. XX.X we and highlights I'll grew Before with We operational questions, million. accounts in ending X.X discuss viewpoint your financial million and by through active looking

supply believe the US the large in that growth in impacted attributable have overall was disruptions to we While part market. continue scale we chain rate account quarter TV platform, global this the active that slowdown to

price Roku of XX-month believe increased OEM and with up XX% of nearly of lower hard year-over-year. XXXX. monetization levels inventory margin year-over-year. below mix remained gross XX% million overall of challenges. largely inventory XX% of our financial a in Platform basis these media particularly to by in Specifically spend higher player fell this toward QX partners as to of streamed US decreased year-over-year the but with million. QX and margin Player levels. revenue other ARPU gross XX TV being XX%. levels QX XX% QX than selling content favorable unit a player entertainment consistent an a prices year-over-year publishers. QX XXXX, sales representing XX% Meanwhile we revenue consumers higher the grew traditional XXXX Roku to hit above passed and increase QX with was of outperform believe insulate was along some in metric $XXX.X chose sales in Platform following that of unit more above TV spike rates costs component expected pre-COVID both hour Total resulting demand X% overall increased streaming function Platform year-over-year million, sales was XX% higher-margin quarter, and the remained pandemic-related in year-over-year TV hours $XX.XX revenue XX% We TV We US key in from accelerated due year-over-year XX% platforms. both users consumers and Gross revenue. our to we profit, to and segment $XXX TV was total XX% were on as to year-over-year billion as $XXX.X average pre-COVID trailing were down pre-COVID growth costs. viewing to levels continue up

and logistics resulting player to we decreasing margin to component increased gross in earlier, costs, from insulate consumers XX% chose mentioned in negative QX. our As

QX the of record EBITDA while revenue and gross million equivalents, allowed $X.X restricted to QX, XX% $XXX.X a spend adjusted up in cash profit in approximately strong of of investing investments. We $XXX.X short-term cash and million Our cash, with OpEx performance still billion deliver business us ended with year-over-year.

business issues ahead, holiday disruptions the chain season delays, strong likely fundamentals terms look product global our will supply overall. impact overall shipping we and remained increases. The price As of product in availability

significantly U.S. the market these expect by continue TV be to We issues. to impacted

the we business, shift of to continued spend performance advertising certain TV Year-to-date, proceeds. reduce pleased to in streaming obstacles QX, as product the Additionally, despite and availability. could verticals with due progress continued are we secular pandemic-related the limited achieved

and introduction outlook and last year-over-year, headwinds rebounding comping for $XXX up net of the spend. to for sequential increase midpoint content versus optimize we operating well growth as at that expenses investments new our from amortization year-over-year as we business of We EBITDA QX that supply business, M&A is profit. being are performance at a robust is absorb the grow profit quarter. million Our with and macro player QX the the the XX% mid-point. as chain-related we growth mid-point, distribution player up of ad value the $XXX gross we comp net as anticipate by account despite making expect expand income be in will EBITDA $XX and as decision strong million depreciation at adjusted and stock-based million adjusted a estimated revenue QX $XX million note, drove Please increasing of costs a basis other and $XX on services result SVOD of and ongoing in to gross total million our business that XX% impacted a QX our includes

call continue confidence maintain the long-term grow streaming all and therefore With We for platform invest of position in leading and face continue We technology, are to that our resilience have over turn to of moving the to ecosystem. questions, inception. that, business headwinds since in Operator? TV the macro has Roku's growth, our tools let's of pleased to with vision the extraordinary in driven the and in TV our

Operator

Thank comes line Zgutowicz you. Securities. [Operator Mark of first with Instructions] Our question the Rosenblatt from

Your line open. now is

Mark Zgutowicz

product then, a right terms direction is that Thanks. Thanks that hoping and getting in in are now the pricing of both pricing bit spend so gross details much. was call that as revenue points that on ad well? out revenue front if out few I Steve, the buyers spend margin could ad platform. from you could then, versus out, the flesh flesh anticipating of you maybe raising is And prices? guide would those great. be called And ad a there out as you Just you're product on a you specific call player to

Steve Louden

in for Hey, on I'll of are side. growth $XXX the through. terms at of Yes, of revenue million for year-over-year growth the the walk calls a you the QX year-over-year Yes. the impacting revenue, XX% rate midpoint a robust factors Mark. couple outlook There that

comps is first from tough last year. So one

Max we the that in by delivered largely and and by exceptional spending content very entertainment content was especially had launching. side, when terms distribution we side. up performance That driven QX of strong publishers or time platform the marquee the launching on discovery+ of services XXXX, you media HBO couple So building on in results strong a were

availability macro that's trend we and Then really industries shipping believe you've increases, a are QX couple have mentioned or sometime continue impacting you pretty comp disruptions in that those challenges that those a is chain have supply QX tough. in and you talked kind industry we so Those terms into of year-over-year lot a macro component -- increases. about or for delays shipping of this -- cost XXXX. make -- into the and got you will the are where And sorry XXXX of cost really that of factors inventory

those holiday advertising also of advertising color QX. we chain into there's down And then their factored season that verticals, them their spend. availability the challenges seen And supply a certain seeing are where, so, impacting we've the they're and slowing effects some around we outlook tracking uncertainties own knock-on thus of are on that the their the especially side, and some of are lot are --

So lot will well. in in folks we saw anticipate and a QX that like we of a be of persistent other that QX that as bit

Mark Zgutowicz

print, was obviously quick follow-up XQ platform maybe And quite a just Okay. revenue performed as look weak player I at and Steve, well. actually

is out the think acknowledging say a versus it. of appreciate comps and to platform, if are that player to Thanks. more I that just the bit XQ tough side more, there pertains in about player? guide if maybe But I'd of you fair just player flesh So could that that business it

Steve Louden

sure Yes, Mark.

TV this context just -- to TV speaks just market and and impact one the on the U.S. on really on the -- with that as sales. So

down. mentioned they're a in down in levels part average actually below That XX% pricing lot chain up U.S. of is supply So pre-COVID U.S. year-over-year I market disruptions the U.S. on XX%. TVs market down are is the And impacting impacting because is sales. and TV based on mentioned TV revenue industries that Roku the is in spike levels. in unit the Roku revenues the look period in player Roku revenue Player an and Roku units in you XXXX. down you player -- Player XXXX demand are on QX, extraordinary When are results, actually pandemic year-over-year above But corresponding QX XXXX. as at The

plan we players. the increases. to while pricing, do So the not to Part hit we get of TV well. than insulate cost component we've of QX has terms on with industry, in passing to that harder of we definitely as that chosen side do the in the Roku mentioned consumers And that the

there's with but trends consumer I going impacting focusing player uncertainty macroeconomic from the to So margin. that's even the will the industry environment perspective, our to we're gross think of focus to think trying continue account happen, some opposed in certainly But sentiment. as strategy side successful driving growth on the player on on these we

Scott Rosenberg

Hey, -- Go ahead go Mark, oh is Anthony. this Scott ahead.

Anthony Wood

No, Scott. go ahead

Scott Rosenberg

issues, Mark, bounce that issues. same going these segment. CPG and are chain ad their way. back that, to think financial there chain they categories We auto supply services ad that work M&E I certainly say by businesses spending. slow It's the it aren't was some some in there their supply to and are are not affected chain will affected advertisers own lot are that's are just to of These causing that facing our services, as also that issues verticals a like supply important note through

some parts the so of on across the business. And not whole but modest it's business, ad a effect

chime Anthony, wanted in you something? Sorry to with

Anthony Wood

you your that. Well, because if about biggest think details. drivers not But if business amount today TV, our going TV to were of adults you US streaming. the of I only streaming TV It's traditional driver XX I at you streaming. ad of XX% business of spend our to their the was ad at XX XX% look questions these say about the also ad business, fact is just in the think to versus time the look if time of on of ad has some spend kinds moved it's the But that

opportunity. eventually That gap but will go. to of that still So rate a big up of way closure to and drivers those and has moving gap viewers starting rate because to ad billion that streaming is this long our close, -- is business $XX the the they are which biggest the catch a of there's all

Operator

Evercore with of ISI. Our the comes next Shweta question line from Khajuria

is now line Your open.

Shweta Khajuria

Thank Okay. you.

coverage help Let comment streaming potential is the we then in both going to how the can me forward? active should Video. any second, the there's not only we from media with And contribution those? the conversations try your could extent partnership negotiation growth YouTube hours please. think Thank on account -- and Prime that on us there other fourth about going should markets, And you perhaps about but it How Could quarter, please negotiations impact with you. think please you on you understand forward? international

Scott Rosenberg

Hey, is Scott. first the your Shweta, this take of part I'll question.

will the think I Steve take part. second

you. said to topic. YouTube, this the at experience So for I our our a One money, thing it's is goal way before, our We on create I to Roku as post don't to matter. say customers. and I our you land and for working resolve would recent that's on about not it's point new for update the have info our is the an We're we will best perspectives for customers. possible it about our positive in for have don't ability blog

As normal of course for with business. Amazon have hundreds discussions renewal your we the year. of each question, partners It's --

user question? goal Steve, an for have negotiations second partner, our to or do great our always take not for in agreement good up experience. agreement renewal Our Shweta's you good customers, Amazon delivers at for of may that's discussions is to time. you is this our read, Despite want reach in the part what these a

Shweta Khajuria

Okay. Thanks.

Steve Louden

the Yeah, specific has growing the but in than international, account we broken US the been in vast Yeah of the International is majority of growth, the sure. haven't active of Shweta. out account active Hi, US. base historically. terms faster

And market countries, that increase scale existing of in not to time existing the continuing And markets good but really in so mix. in we to over that and are excited making progress terms will only we're continue international grow footprint. share in we're having

launched we in So that the adding here just Germany entering also TVs We Peru America just with the Chile players player expanding in footprint we're happened. and in year. TV Brazil with and announced -- Roku later starting SEMP with Latin

greater time, of a international over active So become accounts. the share will

Shweta Khajuria

Okay. you, Thank Steve.

Steve Louden

Thanks.

Operator

question comes line with Michael Guggenheim. Morris the Our from of next

open. is Your now line

Michael Morris

for thanks question. A Hey, me. taking the for couple

control did just their guys to TVs account pricing as of on the couple systems. you competitors seem side. manufacturing process as be First, operating TV growth your taking challenge of part A the more cite of to licensing of distribution opposed

there that sort comes publishing engagement services. understand like I to services. streaming drive OS? when would ongoing So and tough into I'm continue like pros like And comp to expanding Steve, consider a feel you feel little especially to your been the you are better curious as in to kind addition positioning how to with having your I'd it second, to cons TVs there whether new try those get the the by much own What to year-over-year, licensing there pretty clear you of of the will that? their you've spend be to partners

with of look normalized and fourth was unique help how more a like? behavior what maybe at quarter So, anymore might last can you all kind us

Anthony Wood

our on sales Hey, take the Anthony. so is part. will and Mike second and the this part brand I'll Steve, TV first obviously, forth take and

were Just in way not brand and a TV of affect all the terms that to costs. factor And is the TV things in component chain. The is price. if main factor the the you the into you shipping roles, it is sell like prices works different price. of under of in not companies different there's the supply your in does It's results costs take business the dig

shortages pretty just that is all products. what the so that expensive XX% up into or TV driven was issues the on chain overseas. particularly at -- inventory out products also particular If products it and were to then China very the anyone which impossible And prices the shortages getting TVs that's just also. increase. And Chinese that just available. a panel that and factor happened like around especially and to manufacturers, affects average down of And chip not quarter shipping were ship you either and were shipping big a look US US stuff in from supply was bad. in And And was

So, there. into -- come whether brand doesn't it under play sell you the

inventory. You a and that overseas they have factories to where from companies products a of then source have get don't like model VIZIO retailer and they possession then the and product they the they take almost transfer

we retailer. retailers with work -- with brands realize directly. don't I brands, on well the of summary to would very work that brand We we the successful specifically do lot of our happy mean we is a TV Scott? And one how Roku We I with us. of manufacturing, the work few with with So, way with mean know work Roku lot business. but I don't have put technology we We program. Roku We Then we're to actually build TV are the just TV. they're have companies top factory that ecosystem. the realize in everything companies except, it bring in people We TV world a say the for with the TVs. partners and sense we Steve in selling work the do all run or directly our the of engineering. entire work we a that in we in works lot TV we the that a don't it --

Scott Rosenberg

perform on pandemic. reasons think But lot the there the of a entertainment Yes, It remain well in launches. Thanks bullish it. last couple service take was continues a quarter. question of of a was that. the M&E media big Mike. M&E to I the Scott. very new are to QX It is had and robust question I'll and middle for very This the category from you

We promotions anyone are they cheaper where for and might stop spend. streaming services in a ultimately the effective because our all retain business make data tools their an platform to options our have first other the it for acquire services our scale users we than streaming

acquisition get that ads also partner of deliver out these progress user we Roku that and tool different start faster we Patrol So, normalizing faster, substantially of a off store We on PAW when this new the not it the screen acquired. about but up, It's lot off invest in that QX need acquisition services. growth in example that their ads grew the services also engagement made customer to platform partners the Plus, not can still just is see ways Paramount the although mentioned channel the optimization many can in is the the promote than pretty M&E you brands and pandemic. us fun long that a as drive and It's category of but the There's also The and to more been one letter moderating. platform. big you ultimately, by We've can as users strong so awareness those to they the our around technology their of overall your through they've ultimately subscriptions of We've trials on unit business. to our runway that building it's just shareholder the set, on a home view drive in just users target bigger execution M&E video costs. our come retention so at with and business.

is going the great and to a service think as the for a it -- ultimately off normalizing going grow I that's a pandemic, although partners tool of forward. overall, be the is our continues off as to asset we business come business comes So,

Michael Morris

you, Thank Great. both.

Operator

of comes Vasily question with Karasyov line next Cannonball Research. Our from the

open. now is line Your

Vasily Karasyov

advertising in to ask question Thank a the deceleration wanted you. I Good about revenue. afternoon. video

almost And of You kind I the said have pandemic outside growth monetized impressions that we that's of seen. the doubled. quarters, think slowest the

media back some us, telling I going was expect And a So XXX-plus And video how we do And percent then the wondering, color those give there? variances related that revenue can on this the spending I and but you mean different drives last three what's mind promotional to reacceleration if grew you know, Thanks. quarter? us platform what quarter-to-quarter? components could question is, versus of and distribution there? we on quarter

Anthony Wood

and second can like question ad Steve question. the muted, take the then you're take will Scott. Scott Looks

Scott Rosenberg

business buttons I just was video wasn't say deceleration. roughly Thank you. substantial this It I'll Vasily. doubled. mute that end. a muted. many on Too Thanks, the ad

comping of of is are We we're a coming off where a comp over speaking. quarters, couple relatively challenging what

as in robust, still view So, very we general, that of advertising robust. category

of advertising segment to M&E seeing advertisers indicative that set other a demographic seeing I purchase. social growth a performance new categories primarily and year-over-year advertisers, a to just first and that our ability our optimizing of roughly Vasily's outcomes. more in Steve, site are in take in we strength are also out growth second less we're or great is these The of part business. the who or optimizing discussed product That of tripled a We're interested visit robust reaching interested question? are driven think to by and attract class or for -- want the digital you do

Steve Louden

Hey break and the distribution don't significant contributions quarter sure. we we within Vasily. both, segment. Yes, components advertising But about talk platform the had and from the the activities. side did content we out this Yes,

puzzle terms in are fast. those the of notable growing relatively of pieces So

to half this the prior we year, calls on earnings that's that just tougher thing back monetization other important The comps, about note is we on platform have the talked especially side. of in

lot the emergency a last little kind extremely of if kind of doing a had of easy months. M&E year, reaccelerated to had we So, the advertising a XX been hit QX. about that advertisers business went a state And normalized remember last bit QX banner has but business -- in as well, we into you and for our then, we QX comp QX in rapidly the when relatively back it's went break, quarter. how pandemic talked And more and a the

shift that. media the come their of with new focus companies lot a services had you've or as either So, towards on

year-over-year with continued tough progress the despite happy very these comps. we're So,

Vasily Karasyov

you. Thank

Operator

the Swinburne with Our of Stanley. comes next Morgan Ben from question line

line open. is Your now

Ben Swinburne

probably don't that been mobile a about sort Scott. talk questions afternoon. two Good us into products comment and obviously I I Thanks. discussed SMBs have quarter this of the that's on Roku Shopify, this for letter substantial sort Scott, you for challenges really all? out look a translates think I'm you business and the kind then, curious just holidays. on with And finding if the think And been this particularly is how update -- of of Thanks. that heading at them. moving maybe given on could connected building into guys some XXXX? sort of on There's TV, lot provide you partnership about helping call. yet? in headwinds for wondering, some we performance a advertisers into interesting if of Is there's announced revenue partnership front? just towards of you IDFA and there's an the Are you for out real DR as

Scott Rosenberg

you up general two reasons. as should Yes, to alluded like -- a the question, Ben net for really questions for say. framed the I questions right. IDFA in and the or the Thanks, around loss benefit Apple's to Roku, noise and you the way cookies IDs of is the device and All two disruption the

They don't have consumer ad more relationship, where independent Roku does. identifiers. an identifiers challenged in a these scarce these they tech First, because, direct don't are very have is whereas environment, getting

it's fundamental for and us. bringing a to and we're so ultimately advantage first-party with always own us data And our brands working on is platform our

these which changes reevaluate that, platforms are forcing is marketers full back general and on to example. how ad statement, more second a for portfolio, investment social is they're spending step their The

in being chasing these or these loss identifiers big measure, their identifiers. got to to going Roku these there because And a and data And disappear, of sense is platforms. scale through users As are in our like ability that streaming whatever still their identifiers they're of user, brands the our the just action up is beneficiary underinvested some costs and we've capabilities. acquiring generally relative it are of

and step out their social come it general, our and we reevaluate in brands as and digital benefit. back accrues So investments to ahead

We Birthdate, a day. And on of You days got have the program relatively that were first on the through merchant OLIPOP set we mentioned connection. with a partnership running is we And that still the Shopify Jambys, through Pod, host our but in work a where the to Shopify platform it we've that widen them a advertising was on the Shopify on was It – Moon partnership. whole program this their a us purchase beta I platform indicative Roku. to new basically advertisers of can brands platform. on opt part think the strategy with funnel with It's broader really beta oversubscribed is working of early our excited.

angle client because capabilities invested data our diversify our traditionally are able to work dimension base. by into We and brands of have with our optimization digital. in and that Shopify social that which scale, to And the partnership is a

things going that us forward. from other like see You'll

Anthony Wood

this Ben, Hi, is…

Ben Swinburne

Go ahead.

Anthony Wood

I a this thought just sorry, points. is couple – add Ben of I'd Anthony.

in our a TV viewers moving $XX So calls, or billion business to winners how multiple TV look ad, is TV in TV on talk But you our be the we but streaming way at the traditional but about our TV one advertising and talked that our and winners we've customers these advertising ad TV are lot we transition. if letters about and from the of do moving the to targeted It's a technology and on advertiser. data of a typical all think digital just And ad characteristics TV a like I traditional platform. and are there's part of dollars ad big market it's is following. TV capture traditional streaming market but that goal big a to lagging from big and we to nothing platform. entirely it's got digital It's ad the stack a built mean

don't that big that TV market talk we tools uses is but ad And much market. those as just kinds so of the about usually as that

they're go both is and markets it's obviously, to both of So opportunities big a for us. goal our after – those

Ben Swinburne

you. Thank

Operator

Our comes with line from the next Martin question of Laura Needham.

Your line is open.

Laura Martin

what Hi, about and like we're hearing and of SMB lot. know you've the follow Vasily's SMBs. that places growing Facebook question about up challenged. But been the bottom to I talking that there. on and Scott, is like Snap that funnel from other I'd a

is where So because I'm of people robustly and an that business your feedback? environment medium-sized how really other and stat back growing it of wondering, performance pulled are have in is small kinds growing is lack advertisers of those so category saying

Scott Rosenberg

out Yes. result then these partly of did in up for those being television. as because they're in They other their being recently of of it's identifier brands. more grow most spending in think Thanks, landscape platforms making a and medium look to and grew effectiveness. the in in I on more activity these Laura. the investing Snap the their platforms. not less able changing, and expensive of And up Facebook priced Look, cases investing some especially new Most prove is this they're brands it's

We XX-second the – a opportunity new the have screen to branding not having on is for these XX the We said, just spot brand as offer Anthony impact an category. optimize outcomes are biggest household. or also a running but in the

tend the direct-to-consumer broad. and of depends on brands talk our there's So quite performance kid in we're to ad got how these it. still with compete you but we've about the about mind. think that It block, approach appeal early in is goal up spend All nationally. to a There's the brands on a SMBs their And have the We're business. to I for think tools something grown new business. want

forward going the mentioned. other very, we a significant where place sit of that upside than from you platforms we're in see different some So very we

Laura Martin

issues. Street be I going there's pricing Anthony supply the about because question are to then And a out that I must have chain this of helpful. for I a wrong, on thinking but consensus Wall sell Super think TVs you.

to that's me you've America. anyway inventory But when because going cut TVs Why as because and are and dongles the of out you at wouldn't of higher price? you TVs stock and running carrier really one your still and why a but price level? many double retail subs, got still out all the at out add if smart dongles just out price So can sell TVs good in those supply aircraft are fill basically it up seem running you you're would sell to would for because

Anthony Wood

let lower players? do talking try the So price the just about understand to why we question me on the you're

Laura Martin

Yes. why Aren't sell going So to you lower price? the out?

Anthony Wood

Well in lose many And if obviously we business. And forecasting is enough order forecast up sales. extra inventory order if is you you getting devices and you mean I hard out, to huge end then you issue right out sell sell a not with too our you try important. right? don't the

-- the the supply players to sell wasn't So of -- chain case we're our not not out. in goal

expedited line chips for for more get chips. paying in the to front are We shipping -- of for get

that is going from But haven't all shipping are just for to So the costs paying issues customer the spending and up. out end yet. insulate the we air our of we've retailer We've pricing supply and sold been money results been issues. and

just It's cases lead more increases OEMs a relatively of it's that's cost the are and don't of So times far so that TVs In we case practical obviously TV. the TVs, set effectively. the to don't the doing not retailers. the complete been and the TV many it's we've we And cost by longer. for just -- -- price absorb TVs set in that much

see are going the but players hopefully be short run And out we'll in result. So supply quarter stock how to goes. a TVs as of we won't the

selling can also like like have you're in expected players. on if from with you shipping than that. things you more air options more Like things pull QX You look you

TVs You a plan because as cannot heavy. they're just too airship backup

Laura Martin

net So it seems right? dongle you side like the would that beneficiary a on to be

Anthony Wood

than issues the supply are manufacturer Yes, to supply managing TV we issue. have TV -- the manage we better

you That's up that true. I were mean quarter. same up player TV So TV is last sales sales pre-COVID see to just didn't helping. levels. that were XXXX at reasons drop over relative the dropped reason the sales not the because player amount sales That the discussed. is we of

Laura Martin

Okay. Thanks, Anthony. it. guys. Thanks, Appreciate

Operator

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

Your open. line is

Thomas Forte

for taking question. my Thanks Great.

hardware. about So trends I viewership Roku off Roku's Channel wanted of The to ask of

then more? question So and the House you people about from that's what Smart how content think was This second I had have Quibi dongle? acquired proprietary And TV performing that watching appetite your potentially a acquire that your Channel Roku how Old to don't Roku we and should a have don't

Anthony Wood

with Scott some jump take detail So and is add might then or some sure I'm this in extra I'll thoughts. that Anthony.

of still Roku and So our in we Channel mean of of That's full it's set of help terms have don't the focus platform promote is off that The on Roku. said out, true Roku we to we offerings. that primary previously but viewership trends available I our break where assets the

sign example And up subscription Channel. a you make Roku our have of available for -- Showtime in it And We on if so The premium do most spend that's you off we where for effort. Roku.

that be Sometimes able phone. to you watch want on to your

well to cycle well advertisers this then that just working home into platform for own and our to stream reach so a we And get has more very The in us. we've that's on we the effectively. our you that on. make of promote Channel can that asset that's but them Roku And storm So where it's we that do that viewing continues that's brings perfect we the off content really The focus content cycle, us created focus. is originals everything Roku, the -- just provides do incremental more it's well. can virtuous for cycle that very platform invest on the we become this for not successful in fact very inject that's It's us. viewers more dollars we can where more brings Roku focus primary the what spend All primary that available. and important working content in our you we get promote And

of content, terms about question In your is content.

the and we Roku Channel. on as spend as getting of deeper have Obviously, a The content as a to portfolio we the we're able more for portfolio content. grows, is money We more scale spend money -- wider approach have mix

We for that So The it's of different content content And, I about license a at license overall we're companies we an of producing course, lot from. just strategy. originals. Roku think we're Channel, XXX

you we those we greenlit content since the of some that's portfolio. partners. of renewals content originals not then because working when are we've into have original Zoey's portion of shows a as like But over Quibi mentioned. got we us So And bought part business Extraordinary the for shows, we've the new greenlit said XXX of Christmas. then They're I the the huge like portfolio, because as

we lots We just We family keep We linear linear XX channels, and growing kids so now of have content. channels. our also have channels. over added XXX-plus linear

in portfolio So exclusive, viewing of but we're work just in new growing viewers, content are of in us across that the lot originals and they obviously, and few also bring help drive because for they different great a to they're they ways. Channel Roku They, a new bring The viewers part platform experience.

because ad like that's an important role so for and it business. so something originals us. unique advertisers originals, And also drive our and for And they're helps then exclusive really

going So but doing keep and a a disciplined for all originals, we're as in way part the reasons, those to again of portfolio.

Thomas Forte

question, my Anthony. taking for Thanks

Anthony Wood

Sure.

Thomas Forte

Thank you.

Operator

of question line next Nollen the comes from with Our Tim Macquarie.

now Your line is open.

Tim Nollen

for taking Hi, thanks question. the

leading and the And expansion just often buying by laid TV than of was is is at right, supply call from But clouded you've a another players understanding these your hope this. out missed question call, this I into curious the a expansion. sorry those chain international late basically hope the so is consumers haven't moment, if international my By where My I issues I about understand rather are lot a buying markets I way I joining predicated on also this international smart markets. question I'm player. isn't new but strategy a your your

if growth curious your operating you about the sales, either your way I'm sales on advantaged system dongle your player growth talk in smart could versus you of or are TV disadvantaged in So any Thanks. side? sales,

Anthony Wood

Anthony. Streaming start true global world by a phenomenon. is it's streaming shift international continues. The we're as Hi, Tim, that internationally. opportunity opportunity. I'll the the view is just this saying to that around not Well, player-first We a big

to Our and overall us basically that worked for has copy use internationally. in US strategy is what the

So scale the That's doing monetization basically and engagement and in US players. we've as how builds scale that's techniques. internationally, through both then we're increasing and build develop it that's TVs done what

country. use So new we that's enter the strategy. And we're market share a the consumers we them our They seeing enter the as products. in lot. international markets as overall like countries grows And those our

us. international first players our We working markets available strategy from but every So for market have first, our sometimes to of vendors them with multiple sometimes multiple enter and both with is is in do SKUs. goal TVs

have we the we usually But German example, all the TVs we for and with TVs. with and So, market that eventually long. Brazilian entered take entered We first entered we players it market, when entered in players. just doesn't markets,

in other we couple Germany. in So of have happened things our players international launched a that recently efforts,

German And channel X,XXX so on store more have than the we now platform. channels

Latin Roku TVs. In also expanding TVs players in our Roku in countries. popular Roku later other to just Brazil model SEMP TCL expand is TVs, lineup new bring we And TV a with for we're of Chile to brand models in SEMP -- UK and to And We're Brazil. America, of this year and TVs we're working Brazilian America year. Latin shipping Roku terms Peru. presence introduced in this a with brand later

strategy and active we So, focused the on terms I which TVs. the is in building -- in of have accounts, mean same we -- it's to just it's summarize, players US,

Tim Nollen

That’s great color. Thanks, Anthony.

Operator

comes from Our the Blair. of William line with question Ralph next Schackart

open. is line now Your

Ralph Schackart

questions. Two Good afternoon.

discussions of longer letter starting just question. Obviously, is happen, what advertising or to you having guide Anthony. see in First, more of et QX second or But, for term, any the talked is they, spend headwinds impact one there's factors concerns short-term sort that but sort potentially several that you spend. some are first or product could question you Scott related which with talked cetera. pulling is have back of the may Steve, about advertisers And the about just about availability, QX, is more

in or the the about gap billion ad spend. close talked $XX opportunity that's time spread You and spent between the

could was point would you. you talk Thank actually sort mobile about certainly that gap or great? that up market on think of any you that true could to other of you when than time. closing be acceleration But Any factors or movements time? you sort perhaps perspective any could advertising close just or to that desktop If gap think may through speed

Anthony Wood

you to do Steve, go first? want Sure.

Steve Louden

Ralph. Hey, sure. Yeah,

their that seen unknown on is advertising It's advertising-focused it's industries play color have as spend. companies challenges outlook to evidence QX the of uncertainty there a that, did business, the will out XXXX in or some QX And into kind supply QX some own of exactly on they across their up mention kind and rest of reported that. here. that. We've effect and widely the soften It's other related the of that secondary evidence of chain terms in certain verticals disruptions. in how in we might been Just pandemic companies ad

QX So it's that as a is accounted our of something factor that for we ranges. it but part outlook watching, we're

Anthony Wood

time terms that spend. But probably of biggest other gap, it, anything I the their advertisers is affects the causes thing think that is reevaluate the factor. in then, And to

they And they So, I everyone spend COVID that, example to spending then back I they their hit. a think for more pulled how streaming. has were first in think when that And think underspending that started factor when they again, at I realized looked helpful advertising effectively. that COVID harder money been at

so think -- I helped. that's Just

I about think cookies the -- around such. little identity the I talked think issues and bit Scott a

spend advertisers problem to their where causing that is dollars. they reevaluate and also think I how

It a think, will was So if people are the it gap cause just things I close. I stats, at the the last since mean go. it mean to a and closed to some those good for -- of look numbers has still has but is you pretty discussed ways those gap -- kinds is we us. I reevaluate the starting to

Ralph Schackart

Thanks, great. Okay, Anthony. Stay safe.

Operator

comes of question Thornton the Securities. from line next with Matthew Our Truist

now is open. line Your

Matthew Thornton

Hey. if could. Good afternoon, guys. Maybe I two

where kind how TV Fire seen It of is between back of Obviously, there's remains And Comcast to backwards we faster ramp about couple one of have over know aside be the Can years, lever is than other successful and that First, TVs to narrative? for question names question the guess what in TVs the Are guess coming pull what internationally I of aggressively. I I'm doing. for without curious guess been a there's the maybe not of feel if new chain OEMs I'm Amazon But years? will looking guys real is first we about on there couple opportunity pretty the supply of launches seen and you're into that I think market curious to and that TCL, Google kind think competition investing think some guess, like see working getting offset you we've next is guys with we to that last I narrative that's there just I penetration international you incremental that OEM any -- branded be. perhaps when about Roku? lever other second. kind So TV. opportunities. and that you kind

as The levers second we business advertising forward the different the question within TV is to here. start around look

you some if think CPMs, constant, guys nice upward ad probably I been pretty I'm have pretty load pressure. would held under have not mistaken. I assume

we're the terms where there you what ceiling And is that guess, load of Is I'm kind are versus you've to there change hitting think in been guys. past? of I you and kind we're there? so any in CPMs, targeting any any ad sell-through? ceiling curious, is of inventory Thanks, there? hitting And there just

Anthony Wood

that's questions, Anthony. does. what because ad is Scott I And take will This TV assume the I'll take the he questions.

see. Let's

around sold the we We've look all in mean, TVs in market OS with incredibly the operating And you in to scale built companies, of So lots licensed growth beginning. at competing is brand you competition, large in I growth But gone competition, just think We've now of about system. number to Roku I TVs an large about we've general, competition, a-third us. front continue US with share of so a scale industry. lots you all in from we've strong the brands believe of been in companies are with since in Most of if running very competitive achieved our us. the we're one no that terms streaming. successfully if very front TV the of where mentioned

that's more same, in see particular take competition the change any So we the effectively. all the competitive We on. going market landscape, compete we've very dramatic of been will very share. stuff I in and to don't continue with seriously. competing It's just

puts as takes continue move grow to be think although I path. along there'll we we'll that and

built one to the operating world's system the TV, of for We've continue it's only We purpose-built we're innovate. reasons so successful. primary

take from and just TV versus that the and maniacally systems competitors them and – and possible on is is approach build all Our Roku's being keep best that. generally up operating ground focused mobile take the system TV, to port for operating innovating

stay of on purposeful being super great to a we ecosystem. how We matters operating We've focused. content, focus a TV. partner talent. that's center the that We the for So lots of easy system hire being built for use, compete. innovation We

mean, that works strategy us. for well I So

there's TV TVs gain US that asked still If grow, I then see in versus is the sustainable. international, the are of you room not systems like said TVs like obviously these operating still sold look license before, I licensed US the And think that's personally, for you a-third ROS mean, as market running companies and share. we US companies don't proprietary share Roku for as said had of and more about sold to of homegrown, in operating at legacy I a about – but we generally lots a in bit And mature half system. market, where US declining you roughly

was TV non-Chinese see to bit a shipped get was so due out companies slightly out and which sorry X decline Chinese. get to you're growth of countries. our look happening – the continue And from hard issues, a to been are into you was of share chain because in that to a I primarily TVs of in lot recently out China, it It's if happen. will supply trend of and big – little our TVs easier details, partners share to particularly Tier reversal of from a – built come a think it bit and the going usual the of US, of has companies non-Korean There

happen growth temporary. US. a in but will And market think that more, Internationally, there's and of will just is there. to will the us world move licensed we're the general the – to – source I a that's impacted that newer So that, be entirely OS that continue to trend

a a and enter every existing time our we're to And products we so consumers our continues share And companies. growing good market and results. enter it immediately grow like we I seeing we're before, country, country TV starts displacing said once like

streamed. all going about believe we're So what around that's lots their is keep think I big They're continue going the if There's to be TV growing to international streaming. keep and means, That domestic of through of TV one going on we get billion and the accounts. picture, there's households broadband doing. all expansion world. mean, it, to going to to push ways we're to you

small are those So of a pretty actually that doing percent today.

Scott Rosenberg

ad the ability And keep of or I in do limitations your concern the ours. business? see generally which say take part I'll we to feelings, any amounts question, not I'd think a our that's second to near-term scaling of

engagement investments. user the and Anthony a between ad call, this there's First times a has of out, all, in pretty as gap pointed significant few still

So of of there. growing we're minority We're – still headroom a as there's a we're platforms. fast on ads own also sell lot we the still -- our as

value. well So through as Roku Ad us as platform, Platform for there's add a lot of to both through our to OneView the sell inventory flowing

Ad if they're Platform have the sale on buying the data it's if our our same media even apply advertisers we directly. publisher when optimization our So transaction can to platform, that isn't us own expect media even come OneView identity our through from capabilities a

is load touch the of here invested author in which together there to Brand load with float Studio. user part gives would, are the heard why But Roku opportunity experience consumer-friendly to experiences like ad and for the And pretty up. about brands about content, this lots ad an load, I in talked brand. that We're opportunities you experience other we up. ad is passionate put that experiences floating brands. create us, It You not the the points content-led Roku brought of, to content first by we've are

interesting XX-second and particularly there. a to keep XX- and the doing lot we're got for interesting us we've business ad beyond spots that's dimension in-stream executions, growing of a in So

clientele that's to We that that getting at outcomes buy and an to a time And better a think good our both work optimizing better what, or means gives outcomes, our and be for especially because product. also we pretty visit we ability more to for as at our inventory heavy a optimization get whether the mixes over advertiser's website harder optimizing too, keep keep leverage consumer us our Roku for will advertisers. on focus will driving

are a all ad that I of business lot of there say to So going growth forward. think the continued for dimensions

Operator

you. Thank

Rand with Deutsche Our last Jeffrey question comes the from line Bank. of

Your now open. is line

Jeffrey Rand

Thanks pricing and do question. When for during home higher days talking TV when taking the of about have of pandemic? stuck pulled below sales the were might my inventory how in levels people being who a lack they purchase, you about impact pre-COVID TV earlier the at of think versus the

Anthony Wood

almost TVs And I But is I up can't primarily TVs think price-sensitive if an This actually buy it's Jeff. prices was you a average. -- that's incredibly because TVs also inventory in factor. huge Well one. that are there's And then TV are are -- business. sales I definitely the a levels below XX% mean no are stock Hi, TV price. think pre-pandemic I Anthony. mean and on

their so Black whatever they higher for defer they're do. better people, deal, get wait Friday can or to cause going to purchases, And they prices a so

Jeff, they're at sales to there's It's down. TVs. – are just this changes and back mean the in come of systematic sales of we go of is or is up. fundamental. terms look come I generally goes anything history very and going be to industry TV overall where -- So there's pricing sales It these nothing the if It's up cyclical. through the don't think I -- you cycles TV

Jeffrey Rand

Great. Thank you.

Operator

turn call now concludes Anthony you. closing Wood, back today's I This the session. will question-and-answer remarks. to Thank for

Anthony Wood

audiences, quarter. for want to I and publishers built We've the positioned streaming our partners TV the we alike remain for content well advertisers everyone. Thanks, employees, platform best and Thanks. a customers thank for and long-term. strong

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.