The company raised its full-year platform revenue outlook despite a projected decline in the devices segment.
Here’s our initial take on Roku’s financial report.
Key Metrics
| Metric | Q2 2024 | Q2 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Revenue | $968.2 million | $1.11 billion | +15% | Beat |
| Earnings per share (adjusted) | ($0.24) | $0.07 | N/A | Beat |
| Platform revenue | $824.3 million | $975.5 million | +18% | n/a |
| Free cash flow | $317.9 million | $392 million | +23% | n/a |
A Surprise Profit
Roku (ROKU -9.78%) reported earnings per share of $0.07 in the second quarter, far above analyst expectations and a positive $0.31 swing from the same period in 2024. Overall revenue grew by 15% to $1.11 billion, driven by 18% growth for the high-margin platform segment. Devices revenue was down, but Roku managed to cut its losses and nearly break even on device sales on a gross profit basis. That, along with keeping operating expense growth in check, helped push the bottom line into positive territory.
Users streamed for 35.4 billion hours on Roku’s platform during the second quarter, up 5.2 billion hours compared to the prior-year period. Strong performance from video ads helped Roku boost its platform revenue, as did the acquisition of subscription streaming service Frndly. In June, Roku announced a partnership with Amazon (AMZN 1.70%) that brings access to Roku’s user base to Amazon DSP.
For the third quarter, Roku expects revenue of $1.2 billion, which represents year-over-year growth of 13%. Platform revenue is expected to grow at a quicker 16% rate, and the devices segment should contract slightly and generate a larger gross profit loss compared to the second quarter.
Roku boosted its full-year outlook for platform revenue to $4.075 billion, which represents growth of 16% over 2024. The devices segment is expected to decline slightly, with Roku blaming tariffs.
Immediate Market Reaction
After initially surging in after-hours trading on Thursday, shares of Roku later dipped by around 3%. While the company beat analyst expectations across the board, the big earnings beat was partly a fluke of timing. Some inbound TV units shifted to later in the year from the second quarter, which improved the gross margin for the devices segment. While Roku’s results were solid and the company boosted its full-year outlook, that wasn’t enough to push up the stock.
What to Watch
The impact of the deal with Amazon DSP could be a long-term winner for Roku, eventually driving up platform revenue. The partnership is showing good results for advertisers, with a 40% boost to unique viewers on the same budget in early tests. While it will take time for this integration to ramp up, Roku could see its platform revenue accelerate in 2026.
Helpful Resources
Timothy Green has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Roku. The Motley Fool has a disclosure policy.
Great Job newsfeedback@fool.com (Timothy Green) & the Team @ The Motley Fool Source link for sharing this story.
