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Roku Q3 revenue beats estimates on advertising, subscription growth

By Reuters News


Overview

  • U.S. streaming platform's Q3 revenue rose 24% yr/yr to $1.50 bln, beating analyst expectations

  • Q3 EPS rose to $1.20 from $0.16 a year earlier

  • Company will not provide outlook or hold earnings call due to pending Fox acquisition


Outlook

  • Roku will not provide a financial outlook while its acquisition by FOX remains pending

  • TCL and Hisense partnerships are expected to lift Roku TV model unit volume in Q4 2026

  • Roku plans to expand third-party advertising integrations, including Google's DV360, in the coming months


Result Drivers

  • ADVERTISING MIX – Advertising gross margin expanded about 470 bps to 63.2%, driven primarily by a shift toward higher-margin ad products

  • SUBSCRIPTION MIX – A strategic shift toward Premium Subscriptions was the largest factor in a roughly 180-bps decline in subscription gross margin

  • MEMORY COSTS – Elevated memory costs drove Devices gross margin to negative 25.1%, despite 33% yr/yr revenue growth


Company press release:


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q3 Revenue

Beat

$1.50 bln

$1.41 bln (26 Analysts)

Q3 EPS

$1.20


Analyst Coverage

  • The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 9 "strong buy" or "buy", 21 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the entertainment production peer group is "buy."

  • Wall Street's median 12-month price target for Roku, Inc. is $160.00, about 3.1% above its October 30 closing price of $155.12

  • The stock recently traded at 43 times the next 12-month earnings vs. a P/E of 47 three months ago


Reuters Recommended Reads

  • Nov 2 - Versant's MS NOW brings streaming membership to Roku, Apple TV and Fire TV

  • Nov 2 - Fox Q1 revenue rises 22%, beats estimates


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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