Roku reaches profitability milestone with $1.22B platform revenue in Q4

Roku reported today its fourth quarter and full year 2025 financial results, marking a significant turning point for the streaming platform with positive net income for the full year, record free cash flow of $484 million, and platform revenue exceeding $1.2 billion in a single quarter for the first time. The results demonstrate sustained execution on advertising and subscription monetization initiatives that positioned the company for continued double-digit growth.

The San Jose-based company achieved platform revenue of $1.224 billion in Q4, representing 18% year-over-year growth, while total net revenue reached $1.395 billion, up 16% from the prior year period. Full-year platform revenue grew 18% to $4.145 billion, driven by strength in video advertising and streaming services distribution activities, according to the company's February 12 shareholder letter.

Profitability metrics demonstrated the company's operational discipline. Roku achieved adjusted EBITDA of $169.4 million in Q4, with full-year adjusted EBITDA reaching $420.5 million, representing margin expansion of 255 basis points. The company posted net income of $80.5 million in Q4 and $88.4 million for the full year, the first annual profit in the company's history. Free cash flow reached a record $483.6 million on a trailing twelve-month basis.

"We delivered excellent results in 2025, driven by consistent execution and the differentiation of our leading TV streaming platform," wrote Anthony Wood, founder and CEO, and Dan Jedda, CFO and COO, in the shareholder letter. "Looking ahead to 2026 and beyond, we are confident in our ability to sustain double-digit platform revenue growth while continuing to expand both operating and net income margins."

Advertising momentum drives platform growth

The advertising business accelerated throughout 2025, benefiting from deepened integrations with demand-side platforms and expanded measurement capabilities. Video advertising on the platform grew faster year-over-year than the U.S. over-the-top and broader digital ad markets in 2025, according to the company.

Roku's advertising advantage stems from significant scale and first-party data, with more than 90 million logged-in streaming households globally. The platform serves as the number one TV streaming platform by hours streamed in the United States, Canada, and Mexico, according to December 2025 data from Hypothesis Group. This viewer engagement generates substantial ad supply that has positioned The Roku Channel as the number two free, ad-supported streaming app in the United States, second only to YouTube, according to Nielsen's The Gauge report.

In December 2025, The Roku Channel hit an all-time high, representing 6.3% of all TV streaming, up from 4.6% a year ago, according to Nielsen. The share of Roku video impressions executed programmatically continues to increase, positioning the platform to drive higher fill rates and improved monetization as programmatic capabilities expand.

Strategic partnerships announced in 2025 expanded Roku's advertising reach. The company broadened its partnership with FreeWheel to activate Roku inventory via the FreeWheel Streaming Hub, improving demand signals and transparency. Nielsen integration expanded to incorporate Roku data into Nielsen's advanced measurement solutions. Internationally, Roku partnered with Warner Bros. Discovery to scale ad demand in Mexico and launched its ad platform in Brazil in partnership with Mercado Ads.

The company deepened integrations with leading demand-side platforms including Wurl, Yahoo, The Trade Desk, and Amazon DSP to further diversify demand sources. Measurement and performance capabilities scaled through partnerships with INCRMNTAL, iSpot, and AppsFlyer. Roku also launched the Roku Data Cloud, enabling partners to analyze and leverage proprietary TV data to drive measurable results.

Ads Manager scales self-serve advertising

Roku Ads Manager, the company's self-serve platform for small and medium-sized businesses and performance advertisers, continues scaling rapidly. With approved creative, an advertiser can move performance-driven campaigns from "create campaign" to "publish" in under five minutes, according to the shareholder letter.

The platform achieved notable success with early adopters. LolaVie, Jennifer Aniston's haircare brand, selected Roku as its connected TV partner for its first TV ad campaign to expand reach, drive web traffic, and increase retail sales at Ulta Beauty. By leveraging Roku Ads Manager, the brand executed its "Hair People" campaign, contributing to a 40% lift in sales and a 53% year-over-year increase in new customers as part of its overall marketing strategy, according to the company.

Small and medium-sized businesses are estimated to spend more than $600 billion on advertising annually, according to a 2025 Small Business Advertising Trends Report by Intuit SMB MediaLabs. Roku positions Ads Manager to capture significant share of this market as SMBs follow enterprise trends in shifting budgets to connected TV, combining the visual impact of television with the performance of digital advertising.

"Our objective is to minimize friction for SMBs while diversifying Roku demand," the shareholder letter stated. "Today, with approved creative, an advertiser can move their performance-driven campaigns from 'create campaign' to 'publish' in under five minutes."

The company enhanced advertising solutions throughout 2025 to provide partners with greater flexibility in purchasing Roku Media, whether via direct insertion order, a preferred DSP partner, or the self-serve platform. This versatility enables serving advertisers from global enterprises to digital growth marketers.

Subscription services expand globally

Streaming services distribution activities in Q4 were driven primarily by Premium Subscriptions and the acquisition of Frndly TV. Throughout 2025, Roku improved content discovery by upleveling subscriptions in features such as the Content Row, Live TV, and Sports. The Roku Experience now drives more than half of all subscription sign-ups.

Q4 marked the biggest quarter ever for Premium Subscriptions net adds, benefiting from holiday promotions and improvements to the Roku Experience. In October, Roku expanded Premium Subscriptions to Mexico, initially launching with nine leading SVOD partners and growing to 13 partners. Additional launches are planned for 2026.

Building on the successful addition of HBO Max to Premium Subscriptions, Roku expects to add more tier-one partners in 2026. The company plans to add more content to Howdy, the owned-and-operated SVOD service launched in 2025, and take it to more streaming platforms. Roku will roll out bundles in Premium Subscriptions during 2026.

The Sports Experience remains a top content discovery feature, driving viewer engagement and monetization across both ads and subscriptions. Building on enhancements made throughout 2025, such as live scores and game reminders, Roku integrated YouTube TV into the Sports Experience in Q4. This addition expanded the growing roster of partners, which includes DAZN Live Sports, FOX One, Paramount+, Peacock, Spectrum TV, and Xfinity Stream.

In Q4, subscription sign-ups driven by Roku's Sports discovery features increased nearly 75% year-over-year. The company launched the Sports Experience in Mexico in Q4 and followed with a launch in Brazil in January 2026. Roku is engaging sports fans around the Milan Cortina 2026 Olympic Winter Games and anticipates significant viewership for the FIFA World Cup 2026 this summer.

International expansion accelerates

International markets represent a significant growth opportunity for Roku. In Mexico, the company has achieved incredible scale that rivals the United States in terms of streaming households. Roku is focusing on monetization of subscriptions and advertising across international locations.

Premium Subscriptions launched in Mexico in October 2025, growing from nine to 13 partners. The FIFA World Cup 2026 is expected to drive Premium Subscriptions in Mexico. In Brazil, where the ad market has not shifted to digital like in the United States, Roku continues building scale while preparing for monetization.

In Canada, the ad market is very developed from a digital perspective. ARPU is quite strong, and Roku is growing streaming households and ARPU together. The company continues making progress in the UK and expects international to become a larger percent of overall platform revenue over time.

"In Mexico, we have incredible scale and we're really starting to focus on the monetization side of our strategy," stated CFO Dan Jedda during the February 12 earnings call. "In Brazil, where the ad market isn't quite there yet, we're still building scale. We're very focused not just on advertising, but on leveraging our amazing subscription business in our international countries."

Devices strategy diversifies distribution

Devices revenue was $171 million in Q4, up 3% year-over-year, and $592 million for the full year, flat year-over-year. Q4 devices revenue and gross profit slightly exceeded outlook, due to sales of both players and Roku-made TVs. Q4 devices gross margin was negative 23%, and full year devices gross margin was negative 14%.

During Q4, Roku launched Hiro, a new Roku-made TV designed, manufactured, and sold by Roku that enables offering consumers the Roku TV OS at a new, more accessible price. Hiro Roku TVs are available exclusively at Target, further diversifying retail distribution. Earlier in 2025, Roku introduced a refreshed lineup of Pro, Plus, and Select Series Roku-made TVs featuring enhanced picture and sound quality.

New form factors include the Aurzen Roku TV Smart Projector D1R Cube and the Vankyo Roku TV Smart Projector. Roku launched two new streaming players, the Roku Streaming Stick and Roku Streaming Stick Plus, designed for portability and power-efficiency. These players are 35% smaller than other brands and powered directly by the TV, requiring no separate power adaptor.

Outside the United States, Roku brought the Roku Streaming Stick and Roku Streaming Stick Plus to Canada, Mexico, Brazil, and other markets in Latin America. Roku introduced Roku-made TVs to Canada, available exclusively at Best Buy, including QLED 4K models ranging from 50 inches to 75 inches, as well as smaller 4K and HD sizes.

Throughout 2025, Roku deepened the availability of Roku TV models in key markets, announcing new partner Roku TV models with Hyundai in Mexico, Colombia, and Peru; Noblex in Argentina; Finlandek in Colombia; and Vitado in the UK. Globally, Roku works with 45 TV OEM brands across 17 countries.

"As Walmart focuses more on Vizio OS for their house brand, we're focused on broadening and diversifying our retail distribution and we remain extremely well positioned in the market," stated CEO Anthony Wood during the earnings call. "With hundreds of millions of dollars a year of investment in distribution we have flexibility in how we invest this budget."

Wood emphasized several strategic assets that create competitive advantage, including the Roku brand, purpose-built operating system designed specifically for TV, and the lowest BOM cost in the industry with the lowest memory footprint. As memory prices increase, this cost advantage continues to grow.

Roku repurchased a total of $150 million of shares under its $400 million stock repurchase program during 2025, reinforcing commitment to growing free cash flow per share. The company purchased $50 million in Q3 and $100 million in Q4, leaving $250 million remaining on the buyback authorization.

"With our strong free cash flow, we purchased $150 million of Roku stock through our share buyback program and achieved near 0% dilution for Q4, the lowest dilution we have ever reported," stated CFO Jedda. "We see a clear path to fully offset dilution in 2026."

Stock-based compensation expense totaled $354.2 million for full year 2025, down from $384.7 million in 2024. The company continues reducing stock-based compensation as a percentage of revenue while maintaining engineering investments to support platform monetization initiatives.

"Our SBC continues to come down," Jedda explained during the earnings call. "We've done a lot of work in SBC and that is actually trending going backwards from 2025 into 2026. Our guide contemplates that and that's one of the things that's helping our OpEx stay in that mid-single-digit range."

2026 outlook projects sustained growth

For Q1 2026, Roku anticipates platform revenue growing more than 21% year-over-year and devices revenue down mid-single digits year-over-year. The company expects total net revenue of $1.200 billion, up roughly 18% year-over-year, with total gross profit of $530 million and adjusted EBITDA of $130 million.

For full year 2026, Roku anticipates platform revenue growth of 18% year-over-year to $4.890 billion, with gross margin between 51% and 52%. Devices revenue is expected to grow low-single digits year-over-year to $610 million, with gross margin in the negative mid-teens, roughly in line with 2025.

Total net revenue is projected at $5.500 billion, total gross profit of $2.435 billion, and adjusted EBITDA of $635 million, resulting in adjusted EBITDA margin improvement of 267 basis points. Operating expenses are expected to be more heavily weighted in the second half of the year due to shifting retail distribution spend, but the company anticipates mid-single-digit year-over-year growth for the full year.

"I expect that free cash flow will again be above adjusted EBITDA as we remain CapEx light," stated Jedda. "I see a path to over $1 billion in free cash flow by the end of 2028, if not sooner, which will be a significant milestone for us."

The company remains on track to achieve a significant milestone of 100 million streaming households globally in 2026. Streaming hours were 145.6 billion in 2025, up 15% year-over-year.

"We have incredibly strong momentum going into 2026, and our focus is on sustaining growth," Jedda emphasized. "We are executing against our strategy and enter 2026 well-positioned to drive sustained double-digit platform growth and improving profitability."

Timeline

2023: Roku prioritized rightsizing cost structure and reaching adjusted EBITDA breakeven by 2024
Q2 2024: Roku achieved adjusted EBITDA breakeven, one year ahead of schedule
September 2024: Roku launched Ads Manager, self-serve advertising platform for SMBs
October 2024: Premium Subscriptions expanded to Mexico with nine SVOD partners
Q4 2024: Platform revenue reached $1.035 billion, up 18% year-over-year
December 2024: The Roku Channel achieved 4.6% of all TV streaming according to Nielsen
January 2025: Roku launched Sports Experience in Brazil
Full Year 2025: Platform revenue grew 18% to $4.145 billion; achieved positive net income of $88.4 million
Q3 2025: Roku announced $400 million stock repurchase program and repurchased $50 million
Q4 2025: Launched Hiro Roku-made TVs at Target; repurchased $100 million; achieved record quarterly platform revenue of $1.224 billion
December 2025: The Roku Channel hit all-time high of 6.3% of all TV streaming
January 2026: Roku became first streaming platform to optimize ads using iSpot outcomes
February 12, 2026: Roku reported Q4 and full year 2025 results

Summary

Who: Roku, Inc., the number one TV streaming platform in the United States, Canada, and Mexico by hours streamed, serving more than 90 million logged-in streaming households globally.

What: Roku reported record fourth quarter 2025 financial results with platform revenue of $1.224 billion, up 18% year-over-year, and full-year platform revenue of $4.145 billion, also up 18%. The company achieved positive net income for the full year, record free cash flow of $484 million, and adjusted EBITDA margin expansion of 255 basis points.

When: Results were announced February 12, 2026, for the quarter and year ended December 31, 2025. The company projects continued momentum in 2026 with full-year platform revenue growth of 18% to $4.890 billion.

Where: Results span the company's global operations, with particular strength in the United States, Canada, and Mexico. International expansion continues in Brazil, UK, and other markets, with The Roku Channel representing 6.3% of all U.S. TV streaming in December 2025.

Why: The results demonstrate successful execution on platform monetization initiatives including advertising growth through expanded DSP partnerships and measurement capabilities, subscription services expansion through Premium Subscriptions and Howdy, and operational discipline that achieved profitability while maintaining double-digit revenue growth. The company's position as the leading TV streaming platform by hours streamed provides substantial scale for advertising and subscription monetization.