Roku (ROKU) 29 Apr 222022 Q1 Earnings call transcript

Company Profile

Participants

Conrad Grodd	VP, IR
Anthony Wood	CEO
Steven Louden	CFO
Scott Rosenberg	SVP, General Manager of Platform Business
Shyam Patil	SIG
Victoria James	D.A. Davidson
Barton Crockett	Rosenblatt Securities
Shweta Khajuria	Evercore ISI
Ralph Schackart	William Blair
Steven Cahall	Wells Fargo
Vasily Karasyov	Cannonball Research

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the First Quarter 2022 Roku Earnings Conference Call. I would now like to hand the conference over to your host, Conrad Grodd, Vice President of Investor Relations. Please go ahead.

Conrad Grodd

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

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

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

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

Anthony Wood

and needs our has revenue. validates the the model. by platform the TV the center Roku business even of environment, our day first a continued built streaming, platform From meeting higher challenging each ecosystem. strength of participant operate the to been This at in revenue financial one, Roku content up XX% quarter and solid year-over-year, with had operating in growth, performance driven advertising distribution a of

way whether For consumers, them with via prefer, they ad-supported find experience tools we content or services. and that trusted provide discovery that's an excellent allow the to watch subscription

and we streaming improves and monetize services owners, by dollar offer on that the advertisers, content. tools the technology Channel's for the was by content streaming our For ways active the part the owner. are being audiences engagement. of supported a Ad Channel. to The a reach ad expanding And we return retain and platform increased have top And a of the and promote spent. driven in huge third five every time, and our quality ecosystem, content on first It it the portfolio to multiple row. data, growing for by success as demonstrated app five account streaming was Roku U.S. app of platform and reach continued top it in U.S. the the and engagement our for is diversity on our ability unique Roku the our a by quarter in platform build

to to to in come. accounts monetization both active platform platform a As years streaming, leading and expect for continue TV we grow,

XX% invest budgets reports established XX% offerings of streaming streaming. turn opportunities to significant over XXX% me with be we the in products week. TV on ad to Nielsen ad leader spent an become ad more it quarter, the TV as continue will track in TV Roku platform capture eMarketer With will at their and that This streamed. Steve. we U.S., these advertisers to while growth we advertisers Both and launched reports of will first that next that, Today of innovation. upfront of ahead product time record and is new audiences present event all TV technology will their us. a in-person all and Roku's And eventually advertising spend to let TV streaming, just content of

Steven Louden

Anthony. Thanks,

highlights Before your environment. current given outlook our macro questions, the through and discuss I'll walk taking

to quarter million continue million. the grow, We adding X.X active and QX in XX.X with accounts ending

adds stimulus consumer net spend account payments the given active drove year-over-year XXXX. of discretionary temporarily government moderated, that end in expected, As QX,

year-over-year as versus XX% towards grew $XXX year Platform XXXX which period, had roughly billion QX, Player margins higher challenges, margin Additionally, billion a Platform decreased In Engagement year-over-year ongoing XXXX, quarter, down of total XX% sales year-over-year, consumers M&E XX% acquisition $X.X shift in were unit points account XX%, XX% above quarter net supply be to chose cash by launch row. pre-COVID Player increase QX, an was EBITDA was year-over-year, content increased a over due gross the million, from TV we XX% quarter was U.S. QX X.X reflecting selling investments. Roku for XXXX QX, sales in margin prioritize resulting new benefiting and of greater growth ago some and distribution $XXX video robust last mix users adjusted In XX% in and hours supply industry-wide to Player was to of disruptions in gross continue and the prices to declined in was that pre-COVID. of a QX remained levels $XXX high. the advertising chain but year-over-year, X% compared XX.X we in with Roku TV ended up decreased distribution to up which year-over-year. levels average was continued third significant price the below X from pre-COVID QX, revenue, a streamed unit verticals. to $XX million, million. million. revenue insulate growth certain and pressured higher revenue costs. and to quarter. increased higher revenue chain despite but profit of advertising services. softness billion year-over-year from content the

EBITDA. and positioned well is our TV potential in additional I'd Total verticals. And spend Looking to a quarter, net in up profit impacts uncertainties maintain net of $XXX provide related difficult we million macro certain which to through of At to we level, includes delay and chain expectations I on and said, further adjusted with supply ongoing streaming that to ad to leadership the estimates. revenue intend like conflicts. the margin reduce grow. geopolitical total year-over-year. to and a inflationary Roku of navigate mentioned, headwinds, pressures, anticipate continue to breakeven Gross million second each believe $XXX of invest the environment, of gross disruptions, million, the XX% color position. revenue macro or from in huge we opportunity reflects our high ongoing have we to our $XXX just a XX% to near term That continue

grow absorb the we difficult portion Recall our total than business, will ability continue negative result And of acquisition we of this slightly $XXX prioritize that XX%. business, that video we continue of reflected expectation in chain we in account revenue a our revenue elevated monetize million in expect revenue our XXXX will our we more the in resulting Platform a in to margins as has to supply advertising, comp. expect will that be costs. this gross margin gross business, approximately improve disruptions of However, will lower other across we Together, pressure continue and margin, despite which net to streams. the Player Gross and to believe very QX Platform than reflects that doubled profit growing year-over-year.

spending XX% adjusted our QX COVID last commitment the opportunity due for year. we mid outlook our our business invest to curtailed strategic ramping ahead us. is in significant EBITDA year-over-year. breakeven, then early Recall began approximately to expect spending during OpEx and of increase primarily we, of therefore, the and that to And Finally, phases

We also full continue adjusted year to million. EBITDA of roughly expect $XXX

As full drive will to advertisers by we and advertising delivered expected, all secular streaming. all the approximately We near-term growth. continue and revenue our that that shift long-term net will to year, performance TV drove TV enormous believe the shift we and we value OS owners content operating year. headwinds We believe consolidation. content are opportunities in a begin in to thus audiences, consumers, solid streaming XX% of And the environment The total growth TV year-over-year. to challenging expect all the the deliver for to

drive continue Operator, to And We content. audience successful with publishers new the grow with will ad the our Channel for open it continue will content we'll to our platform, now streaming businesses. and provide Roku tools great enhance to questions. and we flywheel OS, up

Operator

is first [Operator Shyam with question Instructions] from Your you. Patil Thank SIG.

Shyam Patil

guys. I job the Nice had Hey, results. on a of questions. couple

talk And then the one, a introducing opportunities you second bit can First on can you what Anthony, Thank you. talk you advertising in half Roku? gives thoughts for your growth about the guys just acceleration? and Netflix confidence second, little potential about

Anthony Wood

one. can I'll take the first This and is the Sure. Shyam. take then second Hey, Anthony. Steve question

comment And with can't not services consumers. makes the people services mean, since to launched except XXXX. lower what that -- that thoughts streaming, great appealing generally streaming specifically streaming more. of service, a stream think which that the of they're I all, on may my first you if say say about them I in or So way do. just advertising first lower is is subscription I advertising, a then I'll price We've streaming well, more to the player partner. Netflix -- cost But as of been working to a we may on

is -- streaming I make of guess generally, increases advertising would and individual an comment different streaming platform, service. a And I Roku than consumer is And good, cost interest the lowers it streaming which business so streaming. because a other is that is in the another model

content our confuse money the consumers with is business model we and to And way the But with advertisers. connect sometimes make two. people and

the I for the traditional more and will streaming offerings to so we our more budgets AVOD believe that flow good for Roku anything through generally, good More business. causes of And movement platform TV that accelerate is streaming. think into us

the Only surpassed are recap a XX for It's -- to opportunity. ad And spend TV where ad -- yet streaming almost we streaming in for TV time have TV Pay streaming. globally. adults in the first advertising TV for the TV of to there. of TV spend $XX the legacy streaming. moved to larger reach is XX. Yet of U.S. is all U.S. to traditional has And The moved yet. XX% has ad billion dollars Just not half ad traditional dollars most time,

XXX% to moving so streaming. budgets going of ad And it's to be

So trend anything business also is that our very model. accelerates for good that

of to is second streaming as the is I well. and if question? you So good consumers services think generally, for part Roku good And Steve, just then for as ads take in want

Steven Louden

the Thanks Yeah, sure. question. Yeah. for

same we bridge of comps that back is in be here mid-XXs will of involved that's this factors year. quarter, said kind the the the revenue-wise. Like easier of up last So year year-over-year the and one from we full the are half of our performance do in revenue with terms QX in outlook, that ballpark then solid view our how is which QX of reaffirmation XX%,

as So half it in you XX% grew just revenue context the XX%. XXXX, front front XXXX XXXX, half of XXXX the roughly versus half grew in remember, back from if -- in of

we're that gives plus reaffirming growth in Cardiovascular full that the ad that Society the growth So seeing guidance. business monetization robust the us that year we're relative confidence relative to peers, for and

The on other at those thing are line that averages. basis, we also just historical increase sequential a look with is in

through macro obviously transitioning opportunity. we're So that overall headwinds the near-term dwarfed by

-- we're continued so the of intact. to growth streaming shift feel the and And thesis Roku about the we remaining around good

Shyam Patil

you, Thank Great. guys.

Steven Louden

you. Thank

Operator

Thanks.

go Your next question ahead. Victoria Please Davidson. James D.A. comes from with

Victoria James

Hi. Thanks question. for my taking

state question from a the would level you. of your appreciate specifically? markets have the and I've for in it of Like thoughts. and questions subscribers collectively? engagement Thank U.S. it our What's AVOD we're point comes we we investors got getting when the following, lot that. for And hit -- a SVOD the today comes when the SVOD difference from on after of between the then saturation of follow-up number to SVOD a consumer to So

Anthony Wood

Scott for Thanks add. Anthony. I'll to if and Victoria. start question. then the Hey, is anything see This has

the a ever. SVOD. First I too still that, that's still more that just to guess XX It's still I is streaming. I think but mean, popular are compared of anything Roku to active the say early about global large growing. would It's billion saturation to world than say TV all around through the tiny that it's spreading broadband million their I households around all, of has world. phenomenon is streaming get accounts, going

most the out don't lot services think it's the to a five to the reach, transitions think the bit still platform look with Roku for top streaming. popular The price like of to Roku mean, doing by a of and of services room there's the of as reach just giving well sorry, got and Channel, now TV. in So ads was on it's Channel in lot, top although SVOD are doing In U.S. I world pay U.S. to the But expand money very a to extremely and of -- the with app SVOD not as if are free market becoming supported, then a a TV but a incredibly what's know I and lower and hard TV higher a there's increasingly U.S. the of dynamics and to close I the of SVOD consumers a better know Pay choice grow is at to engagement spend Platform But about U.S., app mostly internationally, phenomenon, by We mean -- SVOD room streaming TV Pay I five globally globally. for terms Platform nothing a It's versus quickly is services I that Pay which is services lot on now the SVOD global on by the there, continue well a the about as better services, our way to that TV us. services prices think the say. consumers Pay popular the versus ads all five are a level the access content well. much experience. kind with TV, in little version the are consumers do well. lower some a core as And cutting, role a for U.S. yet like services will and consumers the AVOD different you've the it sort to this we settle of saving way And as it's selection streaming It's top of moving of having akin completely dynamic experience. into but way streaming XXX% integrating that great of on the channel ad and it's easily well. which prices are in are ad-free. global of services you

a world having I around one lot there's think in the of a consumers huge as most and of countries, And will is free so which actually, subscription around transition regions opportunity way more. I the XXX% a world, from TV, SVOD think is to least lot maybe it the at

smart general, in more the add just is you ever. anywhere large to I world did we're near something? don't number not So the than popular that think want are a Scott, streaming And saturation. There's become I know, of TVs around TVs. to going But

Scott Rosenberg

household. a of out streaming of moving saturation crossed I you television, X.X everywhere down Yeah. on more at We price. Channel television growing daily just or look, younger And apps AVOD years saturation. time traditional where mentioned We the great is services, that's consistently our not price Roku category consumers much reasons services mode, a I models now spent now in the you near there. and of earlier, like near AVOD, time's that, for has almost diet I shareholder of subscription, just who Victoria. see you pure the subsidized in There also the do more if than ad but eight the platform, the competing, to subsidizes point nowhere are because not that then just versus on whose still of if or fully growth that look are other, been saturating slowed the AVOD, mean SVOD, like I'd I streaming. of there the SVOD terms free see for each hours Anthony -- Certainly, that we're per is linear we're a has many and nowhere business by free -- streaming. their for are near we hours and which double to TV -- acquisition think faster U.S. just part with we a subscription letter mentioned has in linear than very mature On television. down. mean can We're with reach in that of deliver ad-supported services, much still XX% time great

And more supported to ad so offered ultimately be consumers can sport they having are choice drawn when services.

So saturation just definitively appetite we're say near nowhere of for in consumer streaming. terms

Anthony Wood

Yeah, this is again. Anthony

Roku's the -- as with Roku's consolidating I continuing a it service, just are with TV And of course, Smart phones business to you to two platform around business The they before but the is like couple an think and you're three. think end grow. where a smart one as -- Roku happening the if content engagement we is TVs. it's streaming that individual or like to We're to thinking a also huge, about is platform, small same that saw Roku consolidating platforms, important couple platform number And seeing we way platforms. as, our platform across with continuing being the TV And a number consumers advertisers. grow. in are opportunity that not we connects just U.S. thing consolidated the remember I platforms, of entire platforms well of of reason TV the streaming are is because PC saw up is around we will start

through think one -- future, the that everyone of business. subscription is We're And platform dollars in different platform it's a TV hundreds two where you platforms, streaming number and millions service. number a platforms about the advertising or the everyone to in using the consolidated than it's now Canada. three single is is streaming TV, at great that's business TV flow revenue now in mean And of those Mexico. are We in of smart if TV a smart one world a a and

Victoria James

can color to Do the more Roku? one your both current as quick that. you question. live relates for news and sports you on have sneak Thank then thoughts if I of it the in color importance live on on And just any

Anthony Wood

let Scott, -- to I'll do that? want take you

Scott Rosenberg

streaming. is Yeah, services, platform Paramount, on that a of I'll for or essential traditional using Olympics. the viewers it's number in into services take that Football last It's key it. in And pillar sports a of the I are our the ways, to holding an key a these with together. content these Pay TV Peacock, some bundle certainly some whether draw way is instrument type mean, sports the, the driver services

as So feel more of that, through Pay available into we consumers TV we that become see acceleration on traditional services, out sports we'll of viewership see and linear streaming streaming. continued

has readily. Roku great more News news Channel. moved some We've in the offerings got

For example, have Reuters, very well. we offerings then a They services NBC, there. standalone ABC as ton of News, there well. And do are

streaming. and has and news think linear mixed more of obviously innovate behind started I still locked content some already is a Sports services. moved up bag to traditional with more

Anthony Wood

Anthony. is This

of the help I of sports in that app one into think how to like our platform a can every customers, as out services. And example is a to customers we incredibly different great and that be across sense the find rights platform spread Roku valuable at discover opposed are our looking as for what's sports app. in content actually and the is many to across play important roles them going

today Universal like have tools we Search. So

zones. things called We have

easier make the have as are available watch sports even of services streaming across it consumers find right Roku to out tools on playing And they expanding now for want to of game those is to that We thousands zone. we're platform. where the a kinds

Operator

with you. Crockett Securities. question Thank Rosenblatt your next from Barton And comes

please? question Your

Barton Crockett

the follow-up the And you. thanks Okay, I taking with having to for a a and about for discussion great. me then here on on environment question. Thanks ask related the question. call wanted the

subscribers. dive where hit In into They've They're to obviously terms dominant of Netflix is the losing in dominant. -- the a area just some this, wall. streamer you're

just AVOD into Where usage incremental helpful. that still could seeing talk the you going some subscription Netflix? You new or be the was Or there services. if and you're is going would I growing accounts, color about growing guys into is it's hours. not coming what are about, wondering from

Anthony Wood

never Anthony, options. you Scott more at tremendous stream that seeing probably a can consumers look Sure. This Roku And viewers number at of different -- is there's then have you from. add. been I'll a popular. start. select platform, look services to if what could The of lots just Streaming we're Generally, as has

And and going causing so our some to grow. Any at typical dynamics, up We've has streaming about that platform be -- that's but a you about number eight, the or which down hours, and hours about or particular talked in the specific stat in grow. across if seeing engagement we're might aggregate, viewed of household compare whatever overall Roku's that. we're of you that the look to U.S., by is half service

consumers and there's -- grow. other streaming. stream, of to more streaming are watching But because besides so that's using and just more TV more hours overall of So causing they're to ways and that's switching time their

on from As is well, fast-growing with signed it's output our a content. is Channel Roku A&E extremely doing the recently to Everything of far up is content for category We Lionsgate getting movies. AVOD, to deal of The we between, as originals their quality content did and And a everything free. the and I Roku recently deal access because different better. of kinds an catalog better way platform. ad-supported mean, categories, with the all in content, some that

-- supported services. strong there's just lot a content to is well. ad So as is There's growing, but content of

So you you I want add? have Scott, don't do to know, anything

Scott Rosenberg

continues what And just mean substantial that's you ultimately, streaming advertising, just offer for keeps it better. such more in points better investment appeal content services them, consumers. that price the thing more into and just streaming better the opens the the more consumers, Barton, incremental to and that's get driving with I on to consumption. that's No. see the going We simply up a and of yeah, get getting can accessibility just

Anthony Wood

didn't there's the just I before, much that many viewers. options, between mean just just competition, so so golden I happen providers our for Yeah. viewers different age of TV. content mean, for

and lots for just kinds then competition allow as build you and of for across the so And on. interfaces for services -- to user but talking a of I impressions provide content provide that about options to viewers audience audience. good money ways tools because us opportunities those business, then is And for them. to searching build the to find getting we have which from a better was of is make lot to have billing all for platform, time content. that or tools our we just for -- like promotional platform, to other lots And ads, everything put allow providers we of to promotion, and them Roku

business, for good for happening is the that's well. competition just So is good in as streaming viewers our and

Barton Crockett

Okay. quickly, wanted I The if just other address of of services. that to could. And one kind topic I consolidation then

discuss. more consolidation a So where the wondering top if there that of protects of can could you the see I'm service something the you the Discovery. is And or that just TV revenue the about favorable happens you in to networks if we mind your Warner just circumstances obviously, buying from networks one with contractual economics. combined, extent Brothers in is are smaller services, what two loss big gets what curious the one is was different I of smaller that If of somewhat? is bigger model -- on talk like service about service -- it

Anthony Wood

question. can that take Scott

Scott Rosenberg

point, is to services is a these of Yeah. say get I'd platform Barton, as help to to role that, Anthony's back consumers our in consumption. earlier drive what front

our to Discovery, enduring specifically favor continue relationship of and so ensures deals And relationships we're any merger new business our both of companies of merger with comment before parties. general, development, with services companies in we on that or bigger to the better the say that whether Warner models ad deep have or these launch it's to I in or won't consumers. can supported bring the except

consumers, robust for We Channel. excited expect it to potential just our Discovery our inside can experience continue We've through and audience that of to very We've Brothers house there marketing the reach the about sides the channel. services content discovery+ the users. relationship deliver I'm their Warner a launched a both Roku with extend discovery+ the of with terms great to afterwards. Roku in and got

robust us So in for as platform. a good is a competitive general, ecosystem

Anthony Wood

Yeah. And of streaming the available I happening didn’t of number just streaming I is around -- media services. growing. content exist What build generally But actually streaming and that’s content think would add is I’d those the before. that through I services new that say -- companies services to consolidation mean, existing the better amount consolidating are

Operator

Shweta Thank your And next Khajuria comes from with question ISI. you. Evercore

Shweta Khajuria

very you Thank Okay. much.

what Perhaps That's try can comment are and in a dissipate? Let see me think headwinds few, one. now you to the are you you you'll One, year? currently supply earlier sort please. chain when seeing of question versus that headwinds saw you please on the the start already? Where you right

on guidance The spend, weakness but perhaps top-line other -- reiterating brand there from the already trends that now, of seeing are brand there full to has spend been companies Second have your right is, overall for have and some in comment environment. you're conflicting the demand conflicting year possible ad potential that on growth. you reported commentary been

that to trends of margins platform -- you're seeing gross your about for be spend, finally, rest Platform would could the that just for just think a year, then So brand demand if lot. talk great. we especially. segment as revenue the talk Thanks And for you about the

Anthony Wood

the first environment. overall So second Steve then gross ad take the guess take on will supply question can on also the take can And I Steve margin chain. Scott the question question.

Steven Louden

in -- mainly the supply Yeah. couple the quarters. talk about about on can chain talk Hey, impact Scott Shweta. side, the Yeah, Yeah, on in account monetization of -- side. is situation the commentary similar some to last we with and I'll acquisition can terms of chime

similar now costs QX, and QX components with the shipping kind and dealing So if pricing some elevated and situations and logistics terms then delays as we've starting in we've availability where there. you challenges got continued QX, in of into remember, had of as well

that that being in we've that the sourcing great highs sales. the those costs of But remain seen, Player is alternate of general, their then have is doing side. the sure of of doing industry job a the portions make team all-time of Some and but The to TV our impacts in of terms have elevated. Roku some fairly unit reworking impacts nimble come availability general, in we off situation in on terms kind how similar and

causing So the And we market can terms the the to level. in last couple sold down. side, that TVs XXXX the to size the be units of pre-COVID of pricing they're down of elevated TV new on similar see is quarters, these still below overall of

as a industry definitely has is for TV up our partners. gone our that's good news market that share So well The as sequentially. headwind the actually

availability And have on as our the despite that That with one there well OS still headwinds number So good has in We're TV on well. North the TV out the we to we America. partners. side. inventory gone that's compete continue

the relationships to the similar scale, side, price using well. go couple the and flexibility absorb On last as ahead Player to of we've doing increases. our quarters the been our and is What

job supply gives us team more chain And a and Our done good I operations increase like flexibility. keeping that. in of ARPU said, has the

seeing year-over-year, Player comp XXXX in you're unit pre-COVID down while based they payments last year. So a tough to sales, What that above the part on the they're levels. stimulus due is remain

impact. that's of the So kind

be for QX, effects the that supply of chain, in how conditions situation our a pandemic uncertainty In certainly, war we Ukraine. those not in what as will similar. from only And in as continued the persist. impacts, well talked outlook there, about but especially China out will there's will lot knock-on short the at that that of in term, least continue, we terms That's long think around

So Scott, side? to it maybe on you ad turn the over

Scott Rosenberg

Yeah, Shweta.

XX% There stream, ad budgets still cited early ad the time -- the that the letter, because On business. spent. But ad absolutely. more in of chain There's are largely that's shareholder than yes, there. In uncertainty And out verticals budgets some into growth affected by for streaming. of movement but being only still of up putting side in we we're spent we're XX% are supply still robust very the certain others.

to able or year-over-year. going this be into to translates account XX% that grow year-over-year us, we For XXX% are or hey, XX%

significant is customer per our XX% performance one segment, see M&E up and segments, our our segment. across every growth spending large year-over-year, our commitments of we Our increased account segment,

the excited commitments great business. still new We're growth offerings, ad our up going ad upfront rolling a very We're So further shift And us. drive upfront. very yet week. next does figures. It's still But affect magnitude ability about substantial content it, the And live we're bunch product, bullish great the is substantial. into about of we're the putting for substantial innovations. new first uncertainty to of our the out

Steven Louden

Yeah. then margin gross the per platform. And on

it margin in The is, advertising. the the So gross X there was video year-over-year XX%. down shift about platform to difference primary relative reflects QX, XXXX. the quarter, That -- was roughly points advertising towards

XXXX, recently in had you new the we from QX services. or distribution streaming performance of If content extremely remember, strong M&E of side new business to and related

that parts was mix, are monetization. and So a very of higher high-margin those

then reflects And of continued outlook, move kind mix the that toward a our that overall mentioned of this And to video we similar part we had gross reflects of advertising. kind advertising. of company So as video what margin quarter. overall that change

Shweta Khajuria

Thanks, Okay. Thanks, Steve. Scott.

Steven Louden

Thank you.

Operator

you. Thank

question comes next Schackart with William Your Blair. from Ralph

Your question please.

Ralph Schackart

of about predictable this are would time that Anthony, another shift? macro we're is streaming question. of today, Yeah, streaming on in larger budgets allocating the is a question be have Is just of think the this the what this that consumers do of for we macro call, referenced TV I helpful. that accelerate holdup? not sort established to you. if more about And the and has sort through need couple to taking let's is, tough. capabilities? ad and budgets provide it you to just maybe you But streaming and some know call conditions ask occurring question sort would the the environment. of streaming what measurement in the finally color XX% times tunnel others Scott and talking along that XX% of thanks say, you're that is you've get But Thank of shipped

Anthony Wood

understand take point TV take sure behaviors. of Steve But big buyers I'll people the it ad is This better view, to issue then not And I been ads time. a spent of for gap have mean a bigger. TV it. change the is a Ralph. lot a They from budgets buying while a The I smaller. on that long long even ago, were was streaming, the just just buyer, Hey, certain and way probably percent Anthony. my think it answer. ad was I'm has

close. gap to the is starting So

to kind the accelerate businesses, there's is things took I anything will spending But just their took I to they to they something But serious should just example before I longer dollars a to you this for than -- mean, is more mobile, has how time any of Scott, I else for have think shift in about thing really macroeconomic transition accelerate did eventually, it it don't start The other think viewers then is mobile. the past, up. stresses seen efficiently to we've on of ad is, add? time. money. what industries. it lot catches know, get be in to other

Scott Rosenberg

happening, it's just inertia. I it's mean,

a a of segment said, of fastest-growing and segment big lot ad happening all Anthony a strategies. it's industry As segments. it's advertising all is But with lot the media, CTV the among players,

still continue of think acceleration money of locked because I So we'll amount year to up just linear this is television. in see

Anthony Wood

think also cycle rest world, And Roku's if In markets or the ad yet And accounts. a point ad I of tapped States. this is look but -- Nielsen ad the ad traditional other at building advertising the there's have I the your stack case monetization focused no it point a and world. of case almost advertising. a how specifically, we've dollars that be about quality, advertising, shift dollars into of the of TV at directly Roku fully kinds streaming. is the mean, pool you life TV, our you of in is. the -- whole targeted That's It dollars around barely high in in in if big advertising TV active way is is invested sales, there to from going mean demographics. generally of switch think that performance-based was ad launched on And world of not in effective lot tech, started business more was rest was based view, ad we are traditional no the spent streaming of on all much just the the the to very data, over United performance the big measurement streaming to in Roku the Mexico, to In going TV ad connected to We monetization. I advertising we years. switch recently, And ad high to measure growth stack. digital

that room and to there's starting are advertisers starting performance-based of a platform, we so to move grow digital well. and see And our to to advertisers lot as

Ralph Schackart

Okay. Thanks, Thanks, Scott. Anthony.

Operator

Thank you.

next Steven Cahall with Fargo. from Wells comes Your question

Your question please.

Steven Cahall

if us Thanks. could up help a account platform was little quarter nonetheless, I hours bit. comp in Maybe year. on ARPU deconstruct a still you know wondering it's bit. ARPU just I going first, that the lockdowns as I around last But really maybe a XX%. think was per were tough was down The that little there some

other really like maybe or had in might you or you bounties the it some quarter. had So sales content that seems got good have you pricing either

Anthony, get then, I'd on So you. And to a for follow-up a color I more little got just ARPU. quick love

Anthony Wood

want any more in that? year-over-year. Okay. color to I up $XX Steve, actually, But don't know quarter, add was ARPU Well, XX% the to if you

Steven Louden

Yeah, you're right. Yeah.

spend. months, parts the business, to media progress XX distribution, shares we $XX, the great as obviously content that up three as roughly So big well advertising Yes, on are for the revenue entertainment of monetization. the see and continue XX% trailing year-over-year. That's

our we've And more video to to innovate continue And while have to partnering progress the business, that side on And coming been we'll with so shift ago, week, all we obviously entertainment. seen on have progress. aspects even of more. revenues year up then we the good content from announce a ad and a Upfront but publishers the media distribution content continue ad next and see three making and good

not that the is So correlated ARPU hours. those necessarily streaming -- with directly

just day terms ago. but a an difficult comp given As of we little that's pretty household in feel some of the viewing. just a hours still that's been year is total is their the streaming the of blips how you per COVID half We about roughly down day cycle hours over phases. that's a -- of on account average in lockdown time, active U.S. were reminder, a good time demand bit in But growing minus lockdown still TV mentioned, and year-over-year, where the bit streaming a per

on lot as more potential. the side opportunity a both the there's with as streaming well So on ARPU engagement hours

Steven Cahall

more mean, they going that past. of just by consolidating to Comcast color. been in you I seem this Anthony, the players. operating a announcement notion way on there Thanks systems, convicted this that for then, market was a down than couple Yesterday, had really And of and into the little they're aggressive Charter in

the rationalization that, the quite a It's your So baked year. I time. kind for investment long takes about do guidance into guess, obviously of of think lot how that risk a you market

that So when you do enjoy stronger Thanks. where you kind might to rationalization of through think coming might we economics? be

Anthony Wood

second, fast. mean, I just States. active the over in United exist. TV got system so -- about accounts competition you even think selling think Roku I We're TVs we've million XX a if operating growing number ago, Well, years one few the didn't for a and

Now we're sequentially country. number our market TV gained in TV share the growth the quarter. we And the program one -- in selling latest in quarter-over-quarter OS gained

players, way -- TVs both of streaming are accounts. which license. and of for terms active it's those So TVs effectively. both sell compete Amazon, in TVs we streaming Google, growing every region we when in the we've strong been compete and against build are The but we work we for with Roku effectively strategic we win business. best in compete them, compete sell growing, years. we don't Roku every with accounts, sell competing we the we our day products or And reason streaming big, in, assets companies accounts active market, and and We're team. licensed players we We where the And active the comes all we've because the us are critical And team sell to focused -- built grow got on we to purpose-built incredibly A great a only And for our we is streaming, -- TV. operating markets do. system are these in

both look doing the well but things and our players only competitors, success then strong one other, and they're TVs, key is about competitors are streaming there's assets do do that one strong in the and of of we're players Both very TVs. smart whereas If there's really competitors at us. TVs only those you for Roku's that and or both

continue to well. to for chunk that Like to going imagine So platform also just successful building goes and all funneling certainly years player. and new that going But is and the why number a they're growing. as -- competitive. platform -- just our base our installed is big cost invested super is to it's a in Scale I our you of mean we're a for our profit of to competitors it long the have be terms important. I have the that of be large competitive how strength hard back given consolidate, larger a gross across in for into larger you into we've hard to amortize amount think if streaming money very very TV because you of It's it's building platform. of

or usual So the phones phenomenon. lots lots mean PCs, software used there in different exact to phones In PC of I it's same be stacks. systems. different of operating

is a in thing TVs. happening Now there's same couple. only The

Steven Cahall

Thank you.

Operator

Thank you.

comes Our ahead. Vasily Please go Cannonball. Karasyov with from last question

Vasily Karasyov

XXXX. and by relationships grew the they spending about a if with at have in how ad that then second overtime? I tell it after were look I more your one. that year growth thank question launched customer how quick with letter. my XX% So recent your I'm show years you. in in a they I us disclosures, sorry one a biggest then the quarter? evolve Can during please apps substantial quick and fast Well, is one. platform The they missed monetized major significant impressions And the if you last

grow So launches. obviously, an app relationships in years after

retention? revenue change give on time between revenue an initial Thank M&E mix acquisition revenue dynamic over much. color speaking changes and the see M&E? you subscriber then you the M&E, of as how and So subscriber you to distribution can how very do us from phase And some the goes control app

Anthony Wood

muted. Steve? You are

Steven Louden

we just Yeah, as impression, in denote video Roku Obviously, more we're number ad continues into And the the a video Vasily. mixing on of that. said, specific we monetized grow. Hey, ad didn't to business. terms business

last more of In But the talked content between from mix the then year I'll dynamics there. we give Scott give into certainly, shift on kind rev about terms and can of some color we distribution, the and video overtime M&E, thoughts what advertising. see

of So in the is early you those legacy services, that's launch about becoming think But specific we had especially the see late you really revenues terms a of when term a most lot engaged to XXXX, were kind the media helpful a short XXXX, That had revenue overall. very to the what bigger mix streaming. platform was the situation companies of related who of obviously a that where new audience. services. content of their of towards But focus you publishers. We lot have pivoting

that reach will we significant industry-leading retention And bases. engagement have those their to is And with our to tools and have they help of business. then active XX important increasingly, what's grow drive plus We need them million accounts. account

And so that's terms the of shift M&E on that spending side. you're in specifically seeing the

and start where focused way, of They're for just have sort subscriber been that's like building players that they they've a as as the historically to the scale -- much engagement my business terms on that moving before new going. -- to of many that time need is we've analogy retention even have basis. long carriers them So wireless of thinking the some bases, of in on large going reoriented all need focusing

Vasily Karasyov

when to in the than second would it be spend they an launch that So fair with app after can more year you say year in the launch?

Scott Rosenberg

generally, Hey, our live they There'll partners not I it's us, ratio multifaceted. performance their of -- lane AMC it's what with mean strategically. and improving us, in is overtime. ad can linear but is lean It's our engagement with there's that they Crown. after partners getting trades say see get It's with We collaboration be not new another the function these subscribers marketing, toolset When keep collaborate with as partners engage other to more work us, the we're on. we to their example look Scott platforms, we deepens relative Discovery subscription app just our M&E announced of marketing a to we to shares doing the is buttons. of they And platform, Vasily. just more spend yet and here. big advertising. It's just relationship come their that drive It's I'd the of This keep where on services. from companies. especially with to monetarily, bigger platform and tend in a of revenue between that beta these our an terms deeply just dynamic and the Paramount,

think also spend the increase do you're I yes, not generally, user partners category probing overtime. M&E their itself. for And And acquisition. it's just

is to hit retention. and used the keep There's clear from and where have, not of all air driving precedent TV partners saturation linear partners our advertising engagement to they about cross-promote quarter very growing. traditional to as all world time, a actually is time, And up of Even shows. obviously, few need driving TV

traditional in for They've competing their consumer retention, in help drives loyalty as us doesn't form and it cross-promoting which in look in, across overtime. They And engagement. tune different of so the tune services experience even to more keep continue our was investing And streaming the of the to a marketing, driving organically collaborating this in. harder tactics content feature is platform traditionally. with a importance and the world, than is in content us to properties paid diminish got important to where driving

hope I that Vasily, So your question. answers

Vasily Karasyov

Yes. much. very Thank you

Operator

will And Q&A his Anthony for today. session that closing our you. for turn Wood it ends remarks. to back I Thank

Anthony Wood

to Thanks. a for I want solid quarter. partners customers thank and our employees,

the continuing platform focused audiences, publishers platforms. for We content on and to have be advertisers best streaming alike. streaming among we're leader built the TV And innovation

Operator

Thank you you. program, Thank may This you. disconnect. today's concludes and now

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