Roku Net Income Jumps To $183 Million As Ad Sales Climb 23% And Marketing Costs Fall 21%
Roku's quarterly revenue rose 24% to $1.5 billion, while its devices unit lost money on memory costs ahead of the pending Fox deal.
Roku, the TV streaming platform company, earned $183 million in the third quarter, or $1.20 per diluted share, up from $24.8 million a year earlier, according to its shareholder letter furnished with an 8-K on Monday. Revenue rose 24% to $1.5 billion, and the company said it will hold no earnings call and give no outlook because Fox has agreed to acquire it.
Ads and lower marketing spend lift profit
Income from operations reached $164.1 million, against $9.5 million a year earlier. Sales and marketing spending fell 21% to $190.9 million, while total operating expenses fell 6% to $484.4 million.
Advertising revenue rose 23% to $727.4 million, and its gross margin climbed to 63.2%, which the company tied mainly to a mix shift toward higher-margin ad products. Subscriptions revenue also grew 23%, to $580.9 million, but its gross margin slipped to 40.9% as the company leaned into Premium Subscriptions.
Adjusted EBITDA, the company's adjusted earnings measure, was $249 million. Free cash flow over the trailing twelve months reached $796 million.
Memory costs deepen the devices loss
Devices revenue climbed 33% to $193.7 million, yet the unit posted a gross loss of $48.6 million, a gross margin of negative 25.1%. The company attributed that mainly to elevated memory costs.
Roku makes streaming players and its own TVs, and licenses its Roku TV operating system to other TV makers. It said Roku-made TVs approached 8% of U.S. TV unit sales in the quarter. Streaming hours reached 39.9 billion, up 9% from a year earlier.
A company with a buyer
Fox Corporation and Roku announced a definitive acquisition agreement on June 15, 2026. Variety reported the deal is valued at $22 billion and expected to close in the first half of 2027, with founder Anthony Wood joining the Fox board.
Roku said it remains on track for the second-half 2026 forecast it gave in the proxy statement. It expects new TCL and Hisense partnerships to add to Roku TV model unit volume in the fourth quarter, and distribution costs for those sales to be weighted toward that quarter.
Roku ended September with $2.5 billion in cash and equivalents, up from $1.6 billion at the end of 2025.
Sources
- 8-K Filing — ROKU, INC (ROKU) — SEC EDGAR
- Exhibit a04fy2026q3exhibit991.htm — ROKU, INC 8-K exhibit — SEC EDGAR
- Roku Q3 2026 Earnings: Sales Soar 24%, Net Profit Booms 7-Fold — variety.com
