ROKU's Q4 Earnings Surpass Estimates, Revenues Increase Y/Y

Roku ROKU reported fourth-quarter 2025 earnings of 53 cents per share, which beat the Zacks Consensus Estimate of 28 cents. The company had incurred a loss of 24 cents per share in the year-ago quarter.

Revenues increased 16.1% from the year-ago quarter’s level to $1.39 billion and beat the consensus mark by 3.12%.

Roku’s Platform Strength Powers Q4 Momentum

The company posted excellent fourth-quarter 2025 results, supported by consistent execution and the differentiated strength of its leading TV streaming platform.

Advertising performance benefited from Roku’s scale of more than 90 million logged-in streaming households, expanding programmatic activity and deeper integrations with major demand platforms and measurement partners. Engagement milestones reinforced monetization gains — The Roku Channel ranked as the #2 app by engagement in the United States and captured a record 6.3% share of total TV streaming in December.

Roku, Inc. Price, Consensus and EPS Surprise

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

Streaming services distribution activity in the fourth quarter was driven primarily by Premium Subscriptions and the acquisition of Frndly TV. The quarter marked a record period for Premium Subscriptions net adds, supported by holiday promotions and enhancements to the Roku Experience. In October, the company expanded Premium Subscriptions into Mexico with nine SVOD partners, later growing the lineup to 13, with additional launches planned in 2026.

Devices' performance in the fourth quarter was highlighted by the launch of Hiro™, a new Roku-made TV aimed at expanding affordability and market reach, alongside refreshed premium Roku TV models with upgraded picture and sound quality. Roku also broadened its hardware portfolio with smart projectors and next-generation streaming sticks built for portability and energy efficiency. Internationally, expanded retail and OEM partnerships strengthened distribution, reinforcing Roku’s ecosystem strategy while positioning the company for long-term household growth despite near-term margin pressure.

Q4 Segment Details of ROKU

Platform revenues (87.7% of revenues) increased 18.2% year over year to $1.22 billion, driven by continued strength in streaming services distribution and video advertising activities. Gross margin for the segment compressed 120 basis points (bps) year over year to 52.8%.

Devices revenues (12.3% of revenues) grew 3.2% from the year-ago quarter’s level to $170.9 million. The segment’s gross margin improved by 530 basis points year over year to negative 23.3%.

ROKU’s Operating Details

Gross margin, as a percentage of total revenues, expanded 80 basis points from the year-ago quarter’s level to 43.5%.

Operating expenses decreased 2% year over year to $540.8 million. As a percentage of total revenues, the metric contracted to 38.8% from 45.9% reported in the year-ago quarter.

Research and development expenses remain flat year over year at $184.6 million, while sales and marketing expenses decreased 6% to $255.3 million. In contrast, general and administrative expenses grew 7% to $100.9 million.

In the fourth quarter, adjusted EBITDA was $169.4 million, up 119% year over year. The adjusted EBITDA margin improved 570 bps on a year-over-year basis to 12.1%.

Operating income rose to $66 million in the reported quarter compared with an operating loss of $39.1 million in the year-ago quarter.

Balance Sheet of Roku

As of Dec. 31, 2025, cash and cash equivalents were $2.32 billion compared with $2.3 billion as of Sept. 30, 2025. As of Dec. 31, 2025, Roku had no long-term debt.

Roku Provides Q1 & 2026 Guidance

For the first quarter, Roku estimates total net revenues of approximately $1.2 billion, up 18% year over year. Platform revenues are expected to grow 21% year over year. Device revenues are anticipated to be down mid-single digits from the prior year. Roku expects total gross profit of approximately $530 million and adjusted EBITDA of about $130 million for the quarter.

For 2026, Roku projects platform revenues of $4.89 billion, representing 18% year-over-year growth, with gross margin expected to be between 51% and 52%. Device revenues are expected to grow at a low-single-digit rate year over year to $610 million, with gross margins projected in the negative mid-teens.

The company projects total net revenues of $5.50 billion, gross profit of $2.44 billion and adjusted EBITDA of $635 million, translating to a 267-basis-point improvement in adjusted EBITDA margin.

ROKU’s Zacks Rank & Other Stocks to Consider

Roku currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader Zacks Consumer Discretionary sector are American Public Edu APEI, Carnival CCL and Gray Media Inc. GTN, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Public shares have surged 98% over the past year. The Zacks Consensus Estimate for APEI’s full-year 2025 earnings is pegged at $1.08 per share, suggesting growth of 96.36% from the year-ago quarter’s reported figure.

Carnival shares have gained 24.4% over the past year. The Zacks Consensus Estimate for CCL’s full-year 2026 earnings is pegged at $2.54 per share, suggesting growth of 12.89% from the year-ago quarter’s reported figure.

Gray Media shares have climbed 17.7% over the past year. The Zacks Consensus Estimate for GTN’s full-year 2026 earnings is pegged at $2.90 per share, suggesting a year-over-year improvement from a loss of $1.45 per share.

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