Roku (ROKU) 13 Feb 252024 Q4 Earnings call transcript

Company Profile

Participants

Conrad Grodd	executive
Shyam Patil	analyst
Anthony Wood	executive
Dan Jedda	executive
Michael Morris	analyst
Mustafa Ozgen	executive
Laura Martin	analyst
Charlie Collier	executive
Jason Helfstein	analyst
Matthew Condon	analyst
Ralph Schackart	analyst
Steven Cahall	analyst
Cameron McVeigh	analyst
Richard Greenfield	analyst
Alan Gould	analyst
Barton Crockett	analyst

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the Roku Fourth Quarter 2024 Earnings Conference Call.

[Operator Instructions]

Please be advised that today's conference is being recorded. to Grodd, conference Relations. Vice like speaker to now Conrad today, President would hand over the your I of Investor go ahead. Please

Conrad Grodd

Call. Mustafa Dan Jedda, Welcome Ended CFO; Charlie Anthony Quarter Fourth Roku our Devices. Roku's On Media; President, Earnings and Wood, CEO; to are President today's and and Founder Collier, call Ozgen, Roku XXXX Year

which are at Our our materially from full differ make are IR share website these roku.com/investor. letter uncertainties. to this our to Please forward-looking results could filings to and and our subject statements, risk available additional and statements. risks shareholder cause forward-looking on in factors results that management periodic we'll On commentary for call, refer actual our SEC letter

measures. most our comparisons to period. non-GAAP We remarks into will Q&A. quarter, for Reconciliations stated, Operator, Unless our also of go results we'll comparable straight forego provided comparable in financial the first present the please. measures shareholder are question, letter. be against our all otherwise XXXX financial measures will GAAP and this GAAP non-GAAP Beginning prepared and

Operator

Instructions] [Operator

from comes the of with Susquehanna Shyam question International Group. first Our Patil line

Shyam Patil

in drove one, had strong Congrats the how we then And on free guess and flow of fourth on you cash XXXX first trend expect And beyond? outperformance? expect I conversion, questions. should continue the quarter. I couple a in XXXX? do strong results. that What guys the to very that second to question,

Anthony Wood

to like revenue. that platform a proof X points platform grow is to And very thought with was outstanding I everyone, key interesting an this the we're and remind of feel And is just for It the execute results. about it lot I Shyam, the quarter. how QX working We to well. the Thanks of provides question. strategy continuing pleased Anthony. grow one things the our just well. was working our points were like our quarter to revenue of strategy

screen is our better screen asset use of start with in viewing home screen. our first devices on screen. our home a of us. for lean is households key The broadband to Roku into home TV making their all is U.S. the experience Home our Half -- key a

So better a is grow strategy big the revenue. leaning of use of into making assets to part platform our

A more continue drive subscriptions partnerships. second ad third-party subscription well. and focus integration. by our That's focusing on And more growing our of part more then also continue it resources going is focus point third to to revenue more the just with subscriptions home generally, expanding screen to on on is demand

So I feel like working our out in the well, that and seeing play to quarter. strategy is we're start

up quarter. it in our generally, X create on political, advertising, well. at broad-reach quarter strategies see outstanding Even And high-demand, to also advertising quarter. ex you strong Advertising It It advertising an many did unique fronts. ad continue the a to of more is Looking doing as well. that are I picks mean, advertising our units great was is around platform. was advertising unique

the is time. reaching message ad our with person right marquee one in the video business, screen, popular. Just for right that's ad very the on at also good units and example, our of at very the those right home also ad We're

So executing was We're it outstanding an well. quarter.

of a me But transition. it business. that more growth is streaming the to let early your days It's in lot in about going work. Our fairly of strategy can continue expect strategy to still the to this to growth Dan, turn who and XXXX. over working still see talk is left I question. There's part continued in

Dan Jedda

Dan. it's Shyam, Anthony. Thanks,

color into on the strong. grew We of And a QX, me on XXXX. give platform very little let side. QX and So XX% the bit

for XX%. And to look grow year-over-year grew which political, for out what at expecting, growth, are QX and our added platform going to a actually in points XX%. if back in is the we're basis on XXXX. we're faster XX%, than in which grow going QX. you you political the full If we're to XX% X we we you year, And XXXX, of grow going back And out growth if

but by that we do XX.X% adjustments compares in in to platform XXX XXXX, answer we midpoint very basis your expect at that's just question, XXXX so to decline, not some XXX at it results do to down the explained into I for take guide XXX XXXX, a XXXX. our in XX.X%, of XXXX. So expect point continue strong If margin to which gross fully adjustments

margins So backing our XXX, platform out are flat.

grow So platform the then profit basis much imply EBITDA, improvement would in margins dropping we EBITDA $XXX year-over-year guide million to ex gross platform And adjusted a basis XXX as on revenue as to for a expect XXX. XXXX. point

platform our as again, revenue OpEx invest our grow we So good gaining very business. and manage to platform leverage in as still continue we our

all, So good. all very in

share think higher on capital North cash about good our million in We flow. our ended guide cash We working for XXXX, continue Free a on to over got conversion free will things $XXX that good be you we We've metric. CapEx free flow. in to about and just front, of working free last lot flow the expecting I'm very your how cash free Star cash cash adjusted To question XXXX. free per flow be XXXX. light actually is flow thank than flow XXXX question. of to EBITDA for trend at cash feel

And cash flow than for grow should faster grow continue so free and to XXXX. EBITDA should adjusted

Operator

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

Michael Morris

how share some currently. the questions of acquisition great that for drivers impact would that large secondly, VIZIO And of platform to that growth SSD Could about and you advertising about great question. be follow also are I me. DSP yours revenue how versus on about last on of this in they just think you're how partnerships of on then your expand it'd third-party you're maybe Walmart you throughout hear the Two quarter. year? first about looking XX% will how to up a pretty could It and the retail you hear thoughts updated thinking for business? these the contributing to One, think partner are any be

you that deemphasized combination? an expect there will products that do business be So that to on or a be going of your your impact are as result

Anthony Wood

this question Dan Mike, when I'll take then take let finish I'll about your first Anthony. is that, question and your second you Walmart.

Dan Jedda

question. both the our QX, to platform have Both our so We in it's start distribution With QX. the strong service take Yes, that advertising XXXX. Dan. increases both growth growing is activities. very average XX% half of price first and in to revenue streaming comp drivers Mike, the respect I'll are back very in -- that of

forward. for QX, But feel both give more are full QX very growth. about advertising the for We we'll SSD excellent guidance driving year. So both going and business good in on activities,

actually would services activities to grow in advertising which see. our faster to distribution, I we love expect streaming

back including and So of DSP all a the which in strong advertising subscriptions. lot turn talked the year to all, into what's shareholder again, And primarily we've the it Anthony. both activities, which very question second going this then, that's very SSD, from QX, the for for driving of to strong full course, answer partnerships, in on our about part I'll them, the letter

Anthony Wood

it Mustafa remarks, I'll your let runs -- And to and a about few then actually it. introductory our turn I'll regarding VIZIO me about to just the business over device then question acquisition, Walmart talk make who more and

last quarter, In First great million the alone. over quarter passed of streaming all, a streaming I globally. the XX streaming doing we're households. households X growing new over our we on job million mean in we households added

Our first-party also doing well. TVs party million XXXX. We've sold first in over TVs are X

pass streaming to in We're track households. I quarter we last million for happen. we And future, not-too-distant XXX expected think, announced, that to, on that the

aware is both our streaming U.S. outside growing. both expect all States households the that I provide VIZIO to our us. are households can to are continue detail. more and inside continue. future, business -- I turn an to United We that our who to talk United that expect that's view of and also So a streaming inside over for nicely, taken are forecast me growing both into partner do Walmart important in together. fully States. But bought U.S., the and and and of parts lot the account the our going We're Mustafa, the Walmart outside it grow, let

Mustafa Ozgen

Roku speaking. Mustafa in a is #X selling in the has this been OS TV X for OS Mike, the row. years U.S.

wide retail and as For mentioned in Roku And Anthony all than terms and X platform terms U.S. a full terms surpassed our of in And half we've TVs in year penetration. earlier, were very of streaming therefore, already Roku XXXX, systems the unit of we're distribution sales of have households a operating TVs combined. broadband the our in of players also installed household greater base. of And distribution. next large

They Best are Sam Target regional retailers, Clubs and also available and in in other Buy, stores. specialty Amazon, as popular such and

it's space So And by and our popular, for new very ask our upgrade products. brand. we our as continue the brand to wide also shelf customers at name quite And products in gain brand. is They stores. Roku distribution. a we our introduce retailers love They because trust

would love products. to retailers So our carry

to systems a the as So And retailers should customers carry good I quite demand, there are also there for X business. our to One highlight why long of with overall, space different that reasons allocated we is large all is in continue the basically as players, And our our operating our be products. ways. Roku these sort will distribute which shelf will is streaming products.

part The our channels of other first have systems. with of to a our with we third-party sort recently our operating TVs, and TVs large distribute different

to do continue we'll So that.

other confident XXX grow So to U.S. in positioned the streaming to are that households countries million target the track continue we and very we in achieve also remain to well coming in feel years. on

Operator

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

Laura Martin

results. fantastic on Congratulations

the can and think the is a you. everybody us consensus. network in fired in about just road big have to And how out most that in was platform about ad did by in million are how the all forward? subscription So they XXX get And Charlie -- and done you over-delivered break a much map, going year in business report as And media contributor in finished quarter, think subscription you Could for the you for when versus business? retail about you be or then you what business. subscription I recent us it what the year bigger over doing self-service managing as much of you better

Dan Jedda

Laura, it's wasn't nice connection hear you. to The from great.

me So I answer, let know. question, the got don't but if think I I

or retail you been then and map this the I business. think our we've a subscription about -- we asked media doing year, quite the break wasn't is out as what last there what road about in little as big business, I the and bit sure

to our So if it's home back more but platform bunch one of growing screen we're that, the and integration ad third-party leveraging revenue, is for we a go growing our biggest of working platforms doing with ways There's strategy deeper there. demand.

subscription the our is And business. third growing

millions on And our is We build premium continues have also has that subscribers platform, a we for and It by very through it's and very billing subscription we subscriptions, Pay. what subscriptions enabled tens good of call grow. business large all Roku to us. -- through that a business both business that direct-to-consumer our of platform, it's

that on the business. road a don't we continue that map talk And to items drive about of there's that lot will

We partners. continue to more add

but we changes internally We're the made recently subscription to we've very operations around But the OpEx. MAX and it to to, to OpEx disciplined grow handle we premium are continue some more our subscriptions give that to we'll added focus. changes in used we up allocating example, lineup. For way of of our organized the also about the just to speed And map, road more we're business. than

And got grow. If let part question know. room think And last so -- not, it. very I lot I'm I bullish that a answers of of the me So the on question. to your then

Laura Martin

local X% and you that expect grow X% of interesting it revenue would That you Are that's fourth say of Desk was was local political theirs. converted political And that Trade a of every in broadcast was quarter great. was of my secular I now? thought local. TV shift just place you ads? Would that business, or second and using out to the your on was CTV X-year to one cycle it in

Anthony Wood

at last is for cycle. than effort into one I'll for we I'm was spent we we'll mean to Well, a definitely us big we've it's identified it the just but of Charlie, that it -- better the next want better vertical strategically over more and get I get sure us the at. turn that area we we drivers put did did better to we better it. cycle. an And

that's are secular about Charlie shifts. of it. definitely So let the drivers. I'll But there talk one

Charlie Collier

I because learn bound. performance. a election you targets. would is job delivering does results We very advertising we very, driving obviously, They're -- to really a this, microcosm Roku good well. an about political I specific it with would of respect much so say And very do for And cycle what from good is their time marketers. talk really

not like what growth, So terms thesis platform we've portends I seen just the that level. a at we our but in be of the can it highest performance

I continued deliver to we improve for advertisers how well shift Roku CTV yes, there'll specifically a think because be So ROI. and of

Operator

Helfstein next with Oppenheimer. of Our question line from comes Jason the

Jason Helfstein

ad available success do incremental quarter, inventory political When Channel the units did this giving just that usage sales. think is you you out think you fourth about other the and sell. ad your about demand? crowd all to of lot Roku in delivering Or was tremendous with Clearly, think when growth a

Anthony Wood

Jason, take that let this I'll is question. Anthony. Charlie

Charlie Collier

Sure. to Jason. of advertising. get Look, in out place I who market, the political to think there cycle some the waited were probably people

have making think that us, year-over-year. the for Channel grew Roku you advertisers were said, I like XX% -- -- So choice we

that a all part to serve on inventory, have demand allows of position pricing. to of every We of and service the -- from and curve lot a demand to and strength come the really types market of us

is as us into our to I so improved do one the and target I the cycle, incrementality, evident during I So of and was I'm performance we'll the say, thing really served to throughout 'XX. for sure think it's us, ability think the political before, it continue said question but to tough quarter, well

Operator

question line the of comes with next Our Citizens Matt Condon from JMP.

Matthew Condon

was about there. home monetization. beta. talked mention that placed There's My I I in ads being have shareholder on you letter. it of screen it just first is guys understood the the no video know in

then on that that's device profit wanted progressing? and maybe to just And And have I base second is guys what question my to there levers revenue on So understood. are the margins touch and just monetization. see gross you increase

it it like was during it does increased holiday, seem think carried period but into the an I over discounting XQ.

to trying competitive sort and make there that increased So wasn't I'm just sure into quarter in intensity any the of XQ.

Anthony Wood

follow-on of that device say I'll putting driving our we're then plays about our Matt, strategy video marquee our ads this of monetization -- -- the home just also like very before satisfaction. is example, we are both mean, not about question strategy. Charlie careful are making let overall it the about and screen on will margins. I screen. just Anthony. ad about talk is I'll ads just into home And how more very better video on but over I take I our for use screen, putting on driving increased we your customer ad focused turn a home to Charlie,

consumers screen, home it. iconic very love a have We

We have no intention of breaking it.

of -- recommendations strategically locations But home screen. we driving alone home row different also example, one driving lot we more on the on video and part significant Roku also, ads added screen So a of Channel for is our well. it. of our engagement as is subscriptions content putting added in in That

it talk the device another to can turn and So fit overall about to use talk you our me margins. marquee -- we'll of can things -- strategy me monetization. screen can over and how Charlie we more But strategy. our example home ads like let back And about drive do that's into Charlie ad how then like our video

Charlie Collier

screen believe screen in the talking that. of right, the terms part guys of advertisers. it UI we've the last over part for And demand is it call Thanks, an about And considered Anthony. Experience, to demand. we've been that big doing Look, asset We home the Roku well a Experience. in proprietary quarters, I really is of is a diversification. everything you can home diversified lot demand very are and advertiser And the few placements a our is Roku the Anthony participate inside

were that I shopability. you the that we sorts video mentioned Experience but the but were home include took in advertisers, the just advertising marquee not video and Anthony mentioned, which do So NEUTROGENA, all advantage Roku of unit puts on now there of letter the screen, integrations Pepsi

where performance. integrations built in have color driving impact people we We showcases and can where go and of that and the the really at car look advertising it's we're

two from just units then and Experience well. of fastest-growing at Roku the again, move segments solutions, living the I Roku really say, our CTV advertising, of in linear And intersection the performed would is commerce-driven streaming. the which in to macro

all in marketers integrations Roku the business do of prove allow Experience products anymore, category. M&A every but our of results for marketers, unique and so the just we to And the not us

really So two? want it's part you Anthony, working if well. really, to take

Anthony Wood

Yes.

So device revenue and gross margin.

In and million repeat So just of added XX to which households all let I both very U.S. over in streaming households. streaming households with internationally. ongoing that broadband globally. the passed we're continue. we growth passed We what the I that I'll making progress. streaming We're million said we're me expect households. great We in -- half before, the X quarter. progress happy making is growing the U.S., We're

terms to outside of We in Dan. households, to over it grow turn the U.S. streaming let both U.S. me question in revenue, continue gross your devices and to But expect and about in margins

Dan Jedda

here. Yes. for Matt, Thank It's you, the Dan question.

an including down, not the lot an drive mentioned, perspective, inventory unit did market think excess across had high did from market -- did impact Roku. the I It sales. QX, This the holidays, this that a QX. market at excess this as pricing of expectations basically, and So for overall profit just TV over like And you materialize. during revenue And is inventory excess the our our which and will gross QX. position device It first-party in will business. for carry in to our primarily led impact inventory will

full margins for But more to the that's to normal a year so guide. in margin level, do device -- expect we come to and rationalize our

guide year, the to And for roughly going revenue, gross for this are in into XXXX. the what we're expect guiding full on so So would factor device That's flat from dollars our pricing to margins improving. higher market device relative we profit year. does

Operator

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

Ralph Schackart

a talked grew that your the and things On things of if really business. lot could faster the performance, just the QX. business? have advertising and or And top that I ad that then a I'm please. really the outlook stronger what's sort there's Maybe strength the in and in are you overall about the ad sense coming the quarter sure revenue you than call, bunch performance segment X of performance strong sort going platform of strong of in together, right a maybe but a in driving the get follow-up, driving X

Anthony Wood

our really -- is well. X grow think I working all platform to I Anthony. mean, revenue this Yes, parts are strategies of

of going subscriptions. for ad are -- us. drive both more that. better grow good and home business that's work drive to integrations but demand, are There's We're revenue. engagement going to the We're DSPs drive more use the with lot drive The continuing to and making those more to subscriptions And premium And it's well. of I growing to to it's on We room is to then more deepen third-party a our subscription those. subscription, still direct-to-consumer continuing think there's end well. subscriptions and screen more -- a there,

a business. well improvements lot partnership additional good all and things are just lot as driving to of -- are there's that And that improvements, of product as changes, partners product a

I'm at it? have Charlie to did high don't level, you add got I you or or know seeing. So that's anything what a Dan,

Charlie Collier

You got it.

able market those strength we're You're our absolutely say of right, with position of inventory. all the areas. the one growth because to is really a obviously, do I'll we other come thing of to can from

curve. competitive products the the and pricing volume, the the have point demand price at We every on

the sports, premium start to and to positioned the Roku our is Roku way City well moving, So you optimize inventory, our market the our demand side down different the take and really sponsorships, of our who all inventory, look is and can a inventory we all way folks mix. the premium are signals of willing service chain to to those don't the need

that have every point. and competitive So are much the and in at we I fact and very of environment the flexibility growing pricing this products like kind volume

Ralph Schackart

just letter. Great. accurate Dan. that quick provide curious, for I talked within based for wanting add letter, And call? guidance Just just your approach last anything to the latest curious, follow-up rather and info a on changed since X In conservatism. about then you of guess I'm to kind the clear on than could has a you outlook

Anthony Wood

but to it's using to can quarter-to-quarter. Ralph. points year all year, we're out, Yes, we we the -- for data not from for just Obviously, have. the industry give we're that But -- providing our be all the the What QX good and very QX all trying full and call outside choppy of just do ad see provide is XXXX. obviously, and all for volatile best this view

that think is just view see overly internally hey, again, what go I we for out year. we it. of full and everybody expect this we're conservative. we on It's each XXXX. would QX a it's is we there not update for through would quarter the we'll guide Obviously, for view say our as our But what So saying,

Operator

question next Wells from comes the line Steve Cahall with Fargo. of Our

Steven Cahall

on subscription. it's First,

but So guiding also some the flattish took go up recently, we've for up prices Netflix streamers. they're seen ARPU of price some the a at year.

the folks down and ad their the of expectation of some with is big streamers. think be flattish we've will kind I ARPU seen tier other that to tier

folks I'm bit. do of pricing? subscription into flatten revenue. pricing goes up still little you it a get these how just acceleration So Does out end the do tiers, the but lower plays wondering of some it your on SSD If that up,

that how we're So think help about towards seeing some maybe just roll SSD. ad-supported you us of these can tiers industry through shifts

follow-ups of And political. on then a couple

are seems cycles Are and how political this into a size. could from to similar a the cycle, younger and audiences. cycle just 'XX force the record build be big the you getting, sales help campaigns like try in it 'XX specifically reach to packs the adding So given to first, was more

lastly, then reported it good idea you this I the on probably had conservative. Dan, guidance have seems political one, and of help myself And you then QX, you've like when pretty said sorry, but would can't a that isn't

So maybe how understand kind as help in came QX. just a you can the us of political in surprise

Anthony Wood

okay. On when Steve, thanks three deals general the to vary But partners for win subscriptions, going over deals I'll turn allow win. deals. our not it structured we're Dan. matter, as to -- our questions. into that's to deal I'll just because us that say our specific a distribution any are our

subscriptions, up sign we grow we if their engagement. So if

that based also means monetization but advertising. Roku subscription on on often has some based So builds

turn that's kind let a general statement. but Dan. just it over -- me So of to But

Dan Jedda

are and Steve. win one the And different like way Thanks, to think different our think across Anthony it. Dan. right, -- ultimately, I is Yes. content It's partners. subscriptions is deals going is win, ways all of they it about to when to the of we're different the like about on exactly the economics But like the way

best us, the the they as depending and them, to and for better to pricing through their reflect flow to going it's So economics. adjust go through what's on deal

know in obviously that what our on We surpass Charlie giving was were the third and very cycle. able but take it into going I'm it did team really the month with really sales the Anthony targeting, expectations, political, do end our Charlie to And political then is did did the focus of to political we due lot send going that very But and just can there amazing I'll not the then targeted. or last on strong QX. of surpass it to political all for what uncertainty question, QX political, they is back and expectations with do was demand and to but a of political. on a side the And

we Anthony Charlie just on as driven, focused performance are very as and very said, It's this. said,

political that QX about that will a going So or particular for about thinking certainly strength I I'll this Charlie -- the believe forward. how and about vertical talk they're showcased us it. talk let Anthony be cycle

Anthony Wood

let Charlie. on Political yes, -- I'll to it we say Well, a and Anthony. It's knew haven't there something opportunity a for It's we -- at. lot day. -- there. don't our were is we the we lot it's we forecast a then good political it, because difficult improving not thing, at vertical other This history, us very that to have as of want me just it's over we very to something and every turn become we're was X of because ability something focused do

So area it's uncertain. going are to where be forecasts an

So want was ... also that to I do Charlie, think But a factor. you

Charlie Collier

ad as sales up. time our team and changed which cadence proud because the it's a There I'm good of then But of in money lot cycle team are it's is a was clients, moment change, candidate more staff did of think a coming a job. think I it political the the whole also case, the serving And in the because our middle tremendous the has skills. cycle. And election we done really I in built that tests we political really clients, successful as in and Roku this to performance. general,

shows lot right It we're to have about all, XXXX that things, a even room we where the to to of talking it what and but grow. we're us how still technology all XXXX side, the at already And signs and yes, we're and we've better. we for and doing be prepare and on need staffing started good going

Operator

Our next question comes from the line of Morgan Cameron McVeigh Stanley. with

Cameron McVeigh

at opportunity this growth you to OpEx levels, see rate your recently. job And your most have efficient. slowing particularly a OpEx become think done more when curious You about guys good where you year, the

Anthony Wood

Anthony. is this Cameron,

Let our I'll that in very me very disciplined I levels. think focused continuing OpEx platform our we being investment just about to say, business grow are also our while -- on

Silicon to them Valley. And lower-cost some this offices a of so the mean be areas say, more efficient. regions of employees. do lot around hire we in Part we versus, I is world, have of where

regions. curve bent So strategy more to software. more really putting at more on software and also employees looking writing into one resources lower-cost costs, hire automation. that's by using We've hard efficient we're our cloud the in is the We're example, for

Obviously, of the operations AI. we're -- efficiency, looking at and AI. on There's in customer and our ways improve lots using both experience to

a of more more to So we how just become -- spend talking how efficient, lot be time about to and effective.

just want don't Dan? I is us. something a you on. Execution in know, to so for just in really big general, do And OpEx, it's we're talk focus general focused about

Dan Jedda

thing is that, only platform side on any our on that of to losing device is, of side. reallocate course, scale doing focus the has business, would the Anthony, all us to of the on I said allowed what add growing not capital the while he Well, critical right,

very lot revenue. we making So grow side it that feel continue Anthony external our just platform the adding about platform of because of the do to everything to able And on we're investments good a said, without we're to OpEx.

all So balanced good business, side about. a we the which it's discipline, very platform the invest really again, approach continuing feel in but to operational of between

Cameron McVeigh

of about how it. And magnitude manager. your self-serve going ads you forward? been response secondly, are timing thinking Got both curious of this to has opportunity, SMB then in the terms just the How and release

Anthony Wood

tap a This is that advertising traditionally great, mean, think the a into. been TV response market we it's I buy It's large and very opportunity. very I a don't mean can I market. that advertisers has I'll-- Anthony. of it's huge large

it's we're But to don't I'll invest something to I comment. know, you let going So charlie, -- in. continue

Charlie Collier

strategy, and it really we've trajectory we is it lot right. well to these fits that's demand diversification diversify the like and the XXX advertisers, a medium-sized is Yes, but and about which small our it's top are -- the businesses, early going talked demand days, and and beyond incremental, absolutely with And our terrific.

Operator

question line with Partners. comes Our next Rich of from the Greenfield LightShed

Richard Greenfield

like anything feels -- earlier. of to was the lifetime but in parts, who of how of account a think active active of lot sort of humor to in curious has lock-in at people when in you're you've a and to real It's devices you're it's an that about Roku X it question, subscribe least subscribed call once premium future wondering I'm your as a subscription about think subscribe a you what offerings account that and Roku letter talking effect. getting for X on happens value X of if these at changes both few. they being using sort I have impact me subscriber or X terms But seen how you It subscription the how tied the it? sort We different you've not there's Roku. least

that of Amazon. it of lower happens of what subscription curious with seen to sort just provider, subscriptions you what higher lastly, your your tied changing they then of sort all side these? how see packages of know into these own churn see I'm partners, bundle time? of they some I premium do just or it's has what multiple sort the work and over whether when create churn Max And do have you other this is much And experience with do -- Roku. been with over is Or any time of have the of the they Roku?

Anthony Wood

This your is Rich, Anthony. thanks for question.

see. Let's

trying both our premium but better, subscription first really very team think would growing our business. get point, -- all, quite business, area think can't direct-to-consumer well. good a just different Obviously, on on and customer We're our say analytics. and science big churn lifetime app I on of always focused at we're to -- for And I our that on our we we're comment focused subscriptions aspects rates we're I value, data churn, So and on it's it, of experience. it subscriptions of I would we're I understand of partners. focused

get both Pay subscriber terms new teams a we or it's whether of have use when our subscription happy positive system. matter both a premium direct-to-consumer we working they a on would billing generally they no both we're because are in I retention So subscription. Roku say

yes, in the subscriptions I a using so think and Pay general, we through And paying method aspire segment gets get file. it a habit billing Roku of consumer billing of But our into higher through payment for system. our customers they'll of our system, have on to

we you behind compare an we're some some area business that compared competitors, us to X our it of will should premium I sort would on an well could I -- below us, it where we're if big area for But where and bigger of say be competitors. there's we're we business, for if ahead of subscriptions. are be think competitors is lot you our but I mean this where areas of where opportunity because to, It's other say, I where bit we're a of big mean, versus our little areas of business of most opportunity can be. well is ahead our a a actually a area I think it's

Operator

Our next line question with Gould comes Alan Loop from the of Capital.

Alan Gould

adjustment us is expansion? Was happening secondly, two. past third are there update tough the any there? got still headwind? international comps XXX Maybe Dan. M&E we on in the what's you an in, quarter? One, give Or one throw And can a on I've your a

Anthony Wood

Yes, single that for Alan, question. thanks X-part

is Let's we're I progress. actually America, making doing on fast North Latin the progress primary internationally. is Americas, the streaming now focused see and generally, -- right the in and We're Mexico we're in mean everyone, great we're this the the just obviously, mean in platform and with Anthony. international I is expansion, U.S., America, We're Central our America -- markets to our #X pleased to U.K. very Latin growing the We're where #X. Canada starting growth accelerate America U.K. remind

markets do lots focused progress progress. new I in we're we the the great normal we're good making we're focused on TV that would ways on, say, And partners. So of Roku

households I of monetization, primarily and internationally, is example. except months. we're next XXX Peru, we last expect partners. Brazil, on said of a and for that. as track streaming I partners Roku quarter, We're think reach still XX retail in We partners households as Canada, but that come. In a Chile that. on the International to new focused do distribution TV we million U.K., for so say XX number markets, most in would to in less And maybe expanded we streaming have Colombia, to on will well TV Roku of big part scale

want going add to well. you Dan, I international? know, on So it's anything do don't

Dan Jedda

Yes.

-- to Let me that. I'll just little bit a just add

Mexico, monetization. we in we're on the actually like said, front. are stages of on in that In turn starting He We're now and different our have scale we're our to on even penetration scale. And Anthony actually It's broadband mentioned hiring in double reached to We've down we very international of well. think we're Canada and really area. focused As I monetization. focus very more Mexico, growing over XX% Canada actually where monetization locally in scale.

going in We scale, of got that the going meaningful forward. focus a the for us a point now because way that haven't monetized to we've there be is market. And

we'd countries our rest other then we Latin in and scale in Brazil And America, are what of like the call phase. growing

not will both we're in of those of America. big would our position as monetizing markets way we continues actively like digital time, expect and a in we're advantage as that South take Mexico great #X especially importantly, this in going Latin so advertising move And given to other all be areas to areas our and yet. these America that, to to any as come scale over and But and grow position

that side it of we question? part you will and it to On take Do would the M&A want get back build time. our take more the continue the the I M&A, a net to business. become I'll to over as ultimately So of meaningful revenue does turn international time some Anthony. scale to expect revenue monetization

Anthony Wood

really Yes, at. we're good M&A something is

supporting where We I not reliant Roku mentioned to category we And video before. in we've mean mentioned used those units X Experience M&E diversified like platform I we units was healthy, will results a from improve is M&E on experiences category, Roku of on say is on opportunity we're into all just the I brands well, for going non-M&E see the M&E We're not advertisers reliant ton it revenue continue earlier. used those to. strength business we actually, ad. the beyond to that M&A be. and the for see going Anthony in for and Roku, from 'XX. marquee any we the coming like

Alan Gould

was There on XXX the small To in question last the take last XXX. very I'll a QX. question, adjustment

expect I think forward. I do like XXX mentioned adjustments going earlier not we

Our does guide not XXX there. for adjustments have XXXX in any

the way them. our accounting be apply our believe on given we've we Just agreements XXX policy will the numbers a against basis. in We don't and structured go-forward

Operator

line the question comes with Crockett Our from Barton of last Rosenblatt.

Barton Crockett

flow news curious I guess about overnight. Great. Okay. I was of some the

guys Trade a raises And trends. as I'm business about source the last your called in Desk talking out that the of on of kind with strength. you could with some of have was you, you channel their this you question quarter it generally DSP comment partners, and of which generally DSPs just relationship their and if relationship guys. of about one So disappointment And competitive just the the some gyrations where wondering health there's health

Anthony Wood

Anthony. Charlie, over this just and it I'll a is I Barton, to turn think. I'll make comment,

We're business. also obviously Connected we general, think their inventory mean a demand. relationship That's Trade additional They're business the great very TV. productive bring in I for the just important us have helping of a a relationship. Desk. So very to with it's ad I large supplier

Desk So I stocks. read don't it's don't a know I relationship. -- don't earnings. beneficial their Trade I mutually and really the follow

on on Desk what's all is an there. relationship generally I sure our possible. I'm working I'll just going a I we of partner, platform them. but want out not demand that there. of as we're think -- say -- and be Trade good. side mean to as but all focused other important diversified big with there's But lot is DSPs is we're

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

Charlie Collier

That's right.

we're every to side optimize diligently we've relationships with really drive now marketer done And results. working integrations just because to have demand and major and that, but not beyond those We them supply platform.

them. building we this serve we types drive So we advertisers And we're partnerships Anthony's expanding the more right, of Trade with only partner. deeper are demand. of and number But Desk the serve. a We're of not is will great all advertisers growing integrations

that we're I of the you're growing think mentioned signs share Earlier, Channel year-over-year. And XX% up seeing Roku wallet. being we

for agencies not have and a the signals have which we partner, marketers, a more important. inevitably a we lot for just make DSPs, that inventory great but is for us and So most lot of the of -- high-fidelity importantly,

multiple the So as price points. I our to ability DSPs and do expand the demand at with to curve, and continue the we'll serve earlier, entire said more integrations SSPs

data So see so, really, And and to we as And makes do partnerships what's to clients. more them our and partnerships. optimized, you'll in for is more ensure these more inventory activate. us efficient and happening all and programmatically. accountable our Roku our we're our are visible incremental partnerships available advertisers ensure macro, inventory driving us that easiest see you'll are becoming Barton, inventory which the are to most and is platforms And that revenue whichever

sorts we're driving So platform investment the of level, relationships, should deeper Roku. advertisers meaningful all for lead across better highest really, this and for performance at more and to partnerships

Barton Crockett

autos, steel de what if news, Okay. advertising flows? affect Ford to ask know risk I I for anything? the The Are from trade on this mean wars, in And devices Is could the China, then minimis any in tariffs, on thing. tariffs you -- just do seeing anything impact does there could other cautionary one guys? any was about you the could e-commerce.

Anthony Wood

that. comment on I'll Anthony, is This Yes.

going on wrap to Let partner. Desk. just Trade enjoy just a that's with them, it's good think change. say I'll that in summary, also working and I We me relationship. mutually just a they're up just beneficial don't

discussions we In well, a level, explain can -- believe And at I'll Mustafa of different that's turn terms tariffs detail mean material the little impact tell, about tariffs it don't our a in tariffs. I rumors business. case. we of don't more maybe I I'll why in we a general, will lot the believe what over or to about mean, a high say just tariffs, But there's from tariffs. have to on

Mustafa Ozgen

the Look, already the impact world. is the on industry while our on could Mustafa first-party in Roku believe minimal. products Manufacturing impact diversified We around broad tariffs a Barton, this speaking. be will general. is have of

we are And really single really to example, So actually we are customers to tariffs raised impact. by segment concentration, need TV some the strongly higher-end impacted not for concentration. could move prices China may where we be for into that a also, overly actually compensate This country value believe positioned.

benefit we see in some from general. the tariffs So may

Dan Jedda

certain Mustafa impact a a impact this of From like Dan, tariffs, any said. expect I the on immaterial and your business. impacted revenue to there's possibility again, margin on on add to our always Yes, believe earlier. perspective, any is the just lot device gross verticals in point we would diversified. be related certain that Charlie we are we're that talked To side don't to what about general. But well that verticals, platform very Barton. want

we So now issue don't platform see any as to tariffs. on relates right the side it

Operator

the would over remarks. now call Thank back hand to like to Wood I you. Anthony for closing

Anthony Wood

content advertisers like I'd employees, for our thank partners, customers just thank and listening. and to you

Operator

conference This concludes for call. participation. today's Thank your you

now disconnect. may You

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