Should Roku Stock Be in Your Portfolio Before the Q3 Earnings Release?

Roku ROKU is slated to report third-quarter 2025 results on Oct. 30.

For the third quarter of 2025, Roku expects total net revenues of approximately $1.2 billion, indicating an increase of 13% year over year. The company anticipates Platform revenues to grow 16% year over year, and Devices revenues are expected to decline 3%. It expects third-quarter total gross profit of approximately $520 million and adjusted EBITDA of approximately $110 million.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $1.21 billion, suggesting year-over-year growth of 13.46%. The consensus mark for earnings is pegged at 7 cents per share, unchanged over the past 30 days. The estimate reflects a notable improvement from the year-ago loss of 6 cents per share.

In the last reported quarter, the company delivered an earnings surprise of 143.75%. Roku’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 75.42%.

Roku, Inc. Price and EPS Surprise

Roku, Inc. price-eps-surprise | Roku, Inc. Quote

Let us see how things are shaping up for the upcoming announcement.

Key Factors to Note Ahead of ROKU’s Q3 Results

Roku’s third-quarter 2025 performance is expected to have benefited from the platform's sustained momentum, driven by strong year-over-year growth in video advertising and increasing demand diversification. In the previous quarter, the platform's revenues grew 18% year over year, with video ad sales outpacing both the broader OTT and US digital ad markets. This strength, supported by deeper integrations with major demand partners and the successful rollout of the Roku Ads Manager, is likely to have strengthened ad performance and monetization efficiency through the third quarter.

Roku is anticipated to have derived meaningful benefits from progress in its integration with Amazon’s demand-side platform (DSP), which remained on track for completion toward the end of the third quarter. This deep integration, similar to the company's partnership with The Trade Desk, is designed to expand programmatic access, increase bid density across its demand curve, and optimize ad pricing and fill rates. As integration progresses throughout the quarter, Roku is likely to have experienced improved monetization efficiency and stronger advertiser demand within its platform ecosystem.

The Roku Channel (TRC) remained a major growth catalyst in the second quarter, ranking #2 by engagement in the United States and #3 globally by reach. Consistent audience engagement, coupled with expanded content variety and ad opportunities, reinforced its role as a key growth driver within Roku’s ecosystem. In the third quarter, TRC growth in hours is expected to come down from around 80% reported in the second quarter, but it will still be in double digits, with no slowdown expected in terms of engagement.

Roku is expected to have been pressured by continued weakness in its Devices segment, which management expects to decline by about 3% year over year and have negative gross margins in the mid-teens. Increased material costs and the impact of ongoing tariffs likely impacted profitability, which eroded some of the gains from platform growth. Despite a favorable mix shift toward higher-margin platform revenues, the Devices segment’s softness is expected to have remained a drag on Roku’s overall gross margin performance during the quarter.

What Our Model Says About Roku Stock

Our proven model does not conclusively predict an earnings beat for Roku this time. According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Roku currently has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat earnings in their upcoming releases:

Wynn Resorts WYNN currently has an Earnings ESP of +9.24% and a Zacks Rank #2. WYNN shares have gained 45.6% in the year-to-date period. It is set to report its third-quarter 2025 results on Nov. 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

Ralph Lauren RL has an Earnings ESP of +1.01% and a Zacks Rank #2 at present. RL shares have rallied 46.1% year to date. RL is set to report its second-quarter fiscal 2026 results on Nov. 6.

Roblox RBLX presently has an Earnings ESP of +21.30% and a Zacks Rank #3. RBLX shares have jumped 122.7% year to date. RBLX is set to report its third-quarter 2025 results on Oct. 30.

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This article originally published on Zacks Investment Research (zacks.com).

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