Roku on Thursday reported strong fourth quarter results as it executed at the end of 2024 on key monetization areas outlined last April to accelerate platform revenue growth, which was up 25% yoy in Q4 to surpass $1 billion for the first time.
Roku surpassed the $1 billion threshold for total revenue in Q3, and momentum continued on the platform side during the final three months of 2024, primarily on the back of better-than-expected advertising, as well as its subscription business. Expanding third-party partnerships to increase ad demand, expanding the use of home screen real-estate to improve monetization and growing Roku subscriptions are three areas the streaming platform called out as priority focuses at the end of Q1 to boost platform revenue growth. It’s a strategy Roku CEO Anthony Wood said that Q4 results show “is working and working well.”
It also grew streaming households, adding 4.3 million in the period to reach 89.8 million at the end of 2024 and surpassed the 90 million mark in the first week of 2025. Roku’s Streaming hours increased to 34.1 billion in Q4, up 18% year-over-year. Platform revenue continued to handily surpass device revenue contributions for Roku, with the latter totaling around $166 million in Q4, up 7% yoy. Still, devices clocked a $47.7 million gross profit loss in Q4, down 130% compared to the same quarter a year ago. That said, Roku maintained its position as the top selling TV OS in the U.S., Canada and Mexico, and 2024 marked the first full year the company sold Roku-branded smart TVs, with 1 million units sold. Roku ended 2024 with just over $200 million in free cash flow.
Here’s a snapshot of Roku’s Q4 2024 earnings metrics released by the company:
The results surpassed Roku’s own expectations, buoyed primarily by advertising, including political during the 2024 November election cycle, with political advertising comprising about 6% of platform revenue in Q4. Even without political advertising, Roku’s platform revenue grew 19% yoy in Q4. The company projects 16% platform revenue growth in Q1, which executives said will be driven by streaming service distribution (its subscription business) and advertising activities.
Roku’s free ad-supported streaming TV (FAST) service, The Roku Channel, also continued to drive monetization and engagement, reaching 125 million households in Q4 and remaining as the No. 3 app on the streaming platform by reach and engagement. Streaming hours on the FAST were up 82% yoy in Q4 and a whopping 80% of hours in December originated from viewers entering through the Roku home screen (versus an app tile) – a 15-point increase from last year.
And Roku continues to look for ways to utilize its home screen for monetization, which serves as the entry point of TV for half of U.S. broadband households as users decide what to watch.
As part of that effort, it opened up key home screen real estate to enable marquee video ads for brands – inventory that was previously only available to Media & Entertainment brands. Now it’s diversified more and seeing healthy advertising in those newer Roku ad units, including home screen, from non-M&E advertising verticals as well, although continues to cater to the category.
“I will say we're not reliant on M&E for business results like we used to. We're not reliant on any one category, like we used to be,” Wood commented. “M&E is going well, and we see opportunity for strength in the category going into '25.”
It’s also injecting shoppable elements into units, and the shareholder letter called out integrations with Neutrogena as part of a brand showcase as one example of more types of advertisers utilizing not just home screen integrations but leveraging full capabilities Roku platform. Pepsi separately partnered to sponsor a micro series on The Roku Channel.
Coinciding with strong platform revenue growth Roku execs touted expanding ad capabilities and partners, as the company now counts integrations with all major demand and supply side platforms.
“We're growing the number of advertisers we serve and the types of advertisers we serve. And I think you're seeing signs that we're growing share of wallet,” said Roku President of Media Charlie Collier, noting yoy growth on The Roku Channel.
Subscriptions growing but could be bigger
The company’s growing Roku subscriptions but believes the business can get bigger.
Roku distributes streaming services for partners, through both premium and direct-to-consumer subscriptions, which saw a bump in Q4 as streaming service partners upped prices and Roku added additional subscription partners like Max, Crunchyroll and BET+. Roku uses the home screen there too as a way to drive sign-ups and said the increased focus is bolstering results.
“Q4 was the highest quarter of Premium Subscription net adds since its launch in 2019,” the company said in a letter to shareholders.
Still, Wood acknowledged that relative to other competitors – such as Amazon Channels – Roku is somewhat late to the subscriptions game, but views that as meaning plenty of room for further growth and cited subscriptions as “a big opportunity.”
The CEO somewhat skirted an equity analyst question on the call about churn from SVODs when users purchase subscriptions from Roku and what happens to those subscriptions if users switch devices, but did say premium and DTC subscriptions are generally positive in terms of retention for Roku as users are subscribed through the Roku billing system. The company aims to have a higher segment of subscribers buying subscriptions through Roku Pay and its billing system.
“I mean it's a big business for us, but it could be a lot bigger if you compare it to, say, where some of our competitors are,” Wood commented regarding subscriptions.
Doesn't expect negative impacts from tariffs, Walmart’s Vizio buy
Equity analysts also asked about potential impacts on business from trade tariffs in China. While noting there’s a lot of talk about tariffs, executives don’t expect any impact on Roku’s platform business nor anything material on the device side.
Wood said, “in general, from what we can tell, we don't believe the tariffs will have a material impact on our business.”
Mustafa Ozgen, leader of Roku’s device business, added that while tariffs could impact the industry more broadly it expects any impact to Roku would be minimal. He noted the Roku first-party device business is already diversified globally, so it’s not overly reliant on one country, like China.
On the other hand, he suggested tariffs might work in Roku’s favor.
“We believe that higher-end TV prices actually may need to be raised to compensate for tariffs impact. This actually could move some customers into the value segment where we are really strongly positioned,” Ozgen commented. “So we may see some benefit from the tariffs in general.”
Roku also doesn’t appear concerned with impacts on devices from Walmart’s recent $2.3 billion acquisition of smart TV competitor Vizio, where analysts questioned whether it could hamper Roku’s prioritization at the retail partner if Walmart instead emphasizes Vizio devices. Executives said the acquisition is accounted for in its outlook, with Wood adding Walmart is an important partner and expects that to continue.
Ozgen, meanwhile, cited Roku’s leading TV OS status in the U.S. over the past six years, noting it counts wide distribution across other partners as well such as Amazon, Best Buy, Sam’s Club, Target and others. He said consumers trust the brand and ask for it by name, so “retailers would love to carry our products.”
“As long as [there’s] demand, there will be basically a good shelf space allocated for our products” at retailers, Ozgen said.