Form type: 10-Q
Period end: 2026-03-31
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Revenue | 1,248,879,000 | 1,020,672,000 |
| Total Revenue | ||
| Cost of revenue | 683,943,000 | 575,627,000 |
| Total COGS | ||
| Gross Profit | ||
| General and administrative | 102,451,000 | 94,503,000 |
| Income tax expense (benefit) | 2,945,000 | -13,083,000 |
| Other income (expense), net | -36,873,000 | -17,216,000 |
| Research and development | 189,492,000 | 184,579,000 |
| Selling and marketing | 221,221,000 | 223,693,000 |
| Total Expenses | ||
| Net Income | - | |
| Basic earnings per share |
| March 31, 2026 | December 31, 2025 | |
|---|---|---|
| Assets | ||
| Accounts receivable | 752,586,000 | 879,871,000 |
| Cash and cash equivalents | 1,649,877,000 | 1,587,068,000 |
| Goodwill and intangibles | 355,608,000 | 359,613,000 |
| Inventory | 101,289,000 | 114,642,000 |
| Operating lease right-of-use assets | 243,701,000 | 260,341,000 |
| Other assets (derived) | 161,904,000 | 167,908,000 |
| Other noncurrent assets | 58,538,000 | 70,534,000 |
| Prepaid expenses and other current assets | 136,532,000 | 89,716,000 |
| Property, plant and equipment | 162,257,000 | 173,577,000 |
| Short-term investments | 730,342,000 | 730,213,000 |
| Total Assets | ||
| Liabilities | ||
| Accounts payable | 123,093,000 | 158,640,000 |
| Accrued liabilities | 911,199,000 | 957,983,000 |
| Deferred revenue | 123,938,000 | 120,912,000 |
| Deferred revenue, noncurrent | 27,057,000 | 28,848,000 |
| Operating lease liabilities, current | 88,412,000 | 87,425,000 |
| Other accrued liabilities | 159,039,000 | 130,368,000 |
| Other liabilities (derived) | 165,254,000 | 218,106,000 |
| Other noncurrent liabilities | 83,578,000 | 73,256,000 |
| Total Liabilities | ||
| Equity | ||
| Stockholders equity | 2,671,064,000 | 2,657,945,000 |
| Total Equity | ||
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |
|---|---|---|
| Operating activities | ||
| Net income | 85,700,000 | -27,431,000 |
| Depreciation and amortization | 13,900,000 | 11,700,000 |
| Stock-based compensation | 78,682,000 | 95,494,000 |
| Changes in operating assets and liabilities, net | 20,858,000 | 58,969,000 |
| Net cash from operating activities | ||
| Investing activities | ||
| Investing activities, net | 15,265,000 | -8,931,000 |
| Net cash from investing activities | - | |
| Financing activities | ||
| Financing activities, net | -149,731,000 | -36,072,000 |
| Net cash from financing activities | - | - |
| Effect of exchange rate changes on cash | - | |
| Net change in cash | ||
| Cash at beginning of period | 2,160,639,000 | |
| Cash at end of period | 2,256,556,000 | |
| Amount | |
|---|---|
| Balance at beginning of period | 2,657,945,000 |
| Net income | 85,700,000 |
| Other equity movements | -72,581,000 |
| Balance at end of period | 2,671,064,000 |
Roku, Inc. is a public reporting company classified under Cable & Other Pay Television Services. The accompanying unaudited condensed financial statements have been prepared from the Company's books and records for the interim period, and the results of operations for the period ended March 31, 2026 are not necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements included in its Annual Report for the year ended December 31, 2025, filed on February 13, 2026 with the SEC. Effective in the first quarter of 2026, the Company's reportable segments changed; the Company now manages and reports its operating results through three reportable segments: Advertising, Subscriptions, and Devices, whereas previously it reviewed and managed the new Advertising and Subscriptions segments as a combined Platform segment. Segment financial information for the first quarter of 2025 has been retrospectively adjusted to reflect these changes.
The Company recognized revenue of $1,248,879,000 for the three months ended March 31, 2026, compared with $1,020,672,000 in the prior-year period, an increase of 22.4%. Advertising revenue is generated from the sale of digital advertising, including direct and programmatic video advertising, ads integrated into our user interface, and related services. Subscriptions revenue is generated from the sale of subscriptions to end users, including subscription revenue shares from content partners, the sale of Premium Subscriptions, and the sale of owned and operated subscription services, and also includes the sale of branded app buttons on remote controls. Devices revenue is generated from the sale of streaming players, Roku-made TVs, smart home products and services, audio products, and related accessories. Cost of revenue for the period was $683,943,000, compared with $575,627,000 in the prior-year period. Deferred revenue was $123,938,000 and noncurrent deferred revenue was $27,057,000 as of March 31, 2026, compared with $115,839,000 and $25,122,000, respectively, in the prior period.
Net income for the three months ended March 31, 2026 was $85,700,000, and weighted-average basic shares outstanding were 147,510,000, resulting in basic earnings per share of $0.58.
Total liabilities were $1,681,570,000 as of March 31, 2026, including current operating lease liabilities of $88,412,000, which increased 9.1% from $81,034,000 in the prior period. Operating lease right-of-use assets were $243,701,000 as of March 31, 2026, a decrease of 16.6% from $292,146,000. Total stockholders' equity was $2,671,064,000 as of March 31, 2026, an increase of 5.8% from $2,525,709,000 in the prior period.
| Current | Prior | |
|---|---|---|
| Operating lease liabilities, current | 88,412,000 | 87,425,000 |
| Total debt | 88,412,000 | 87,425,000 |
| Current | Prior | |
|---|---|---|
| Property, plant and equipment | 162,257,000 | 173,577,000 |
| Total property and equipment | 162,257,000 | 173,577,000 |
| Current | Prior | |
|---|---|---|
| Stockholders equity | 2,671,064,000 | 2,657,945,000 |
| Total stockholders' equity | 2,671,064,000 | 2,657,945,000 |
The following discussion should be read together with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report. We are ROKU, INC, and the discussion below addresses our results of operations for the period ended March 31, 2026 compared with the comparable prior-year period. We are a public reporting company classified under Cable & Other Pay Television Services. Revenue for the period was $1,248,879,000, an increase of 22.4% from $1,020,672,000 in the prior-year period. The growth in revenue was accompanied by an increase in accounts receivable to $752,586,000 from $650,187,000, or 15.7%, and increases in deferred revenue to $123,938,000 from $115,839,000 and in noncurrent deferred revenue to $27,057,000 from $25,122,000. [COMPLETE: description of specific revenue drivers by product or service line]
Cost of revenue increased 18.8% to $683,943,000 from $575,627,000 in the prior-year period, and continued increases in our costs, if not matched by revenue growth, could harm our operating results. Because revenue grew 22.4% while cost of revenue grew 18.8%, our revenue growth outpaced the growth in our cost of revenue for the period. Operating expenses reflected an increase in research and development of 2.7% to $189,492,000 from $184,579,000, a decrease in selling and marketing of 1.1% to $221,221,000 from $223,693,000, and an increase in general and administrative of 8.4% to $102,451,000 from $94,503,000. Other income, net increased to $36,873,000 from $17,216,000 in the prior-year period, and we recorded income tax expense of $2,945,000 compared with an income tax benefit of $13,083,000 in the prior-year period. Net income for the period was $85,700,000, or $0.58 per basic share based on weighted-average basic shares outstanding of 147,510,000. [COMPLETE: discussion of specific drivers underlying changes in other income, net and income tax expense]
Our principal sources of liquidity are our cash and cash equivalents of $1,649,877,000, which decreased 26.9% from $2,256,153,000, and short-term investments of $730,342,000, which we held at the end of the current period and did not hold in the prior period. During the period, our debt securities available for sale declined to zero from $48,941,000 and our restricted cash and equivalents declined to zero from $403,000, while goodwill and intangibles increased 91.7% to $355,608,000 from $185,495,000. Total liabilities were $1,681,570,000 and total stockholders' equity increased 5.8% to $2,671,064,000 from $2,525,709,000. Our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments, and we do not have material foreign currency or commodity price exposure. Changes in interest rates or other adverse developments in financial markets could reduce the value of, or the income generated by, our investment portfolio. Management believes that our existing cash, cash equivalents, and short-term investments will be sufficient to fund our operations and meet our anticipated cash requirements for at least the next twelve months. [COMPLETE: summary of cash flows from operating, investing, and financing activities]
Our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments. We do not have material foreign currency or commodity price exposure, and accordingly, changes in interest rates represent the principal market risk that could affect our financial position and results of operations. As of March 31, 2026, we held cash and cash equivalents of $1,649,877,000, compared with $2,256,153,000 in the prior period, a decrease of 26.9%, and short-term investments of $730,342,000, compared with none in the prior period. During the period, our holdings of debt securities available for sale decreased to zero from $48,941,000 in the prior period, and restricted cash and equivalents decreased to zero from $403,000. Because our interest-bearing assets consist of cash, cash equivalents, and short-term investments, a change in market interest rates would primarily affect the amount of interest income we earn on these balances and the fair value of our investment portfolio.
Given the composition and relatively short duration of our cash and investment portfolio, we do not believe that a hypothetical change in interest rates would have a material effect on our financial condition or results of operations. We do not have material foreign currency or commodity price exposure, and we do not currently use derivative financial instruments to hedge market risk. We will continue to monitor our exposure to interest rate movements and the composition of our cash and investment portfolio, and we may adjust our investment strategy in future periods in response to changes in market conditions.
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2026, the end of the period covered by this Quarterly Report. Based on that evaluation, management concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of the end of the period. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
There were no changes in our internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
The conclusion language set forth above must be reviewed and adopted by management before this report is filed.
From time to time, we are involved in legal proceedings arising in the ordinary course of business. These matters may include claims and disputes incidental to the conduct of our operations. Management does not currently believe that any pending matter is material to our financial statements.
While the outcome of litigation is inherently uncertain and the results of any pending or future proceedings cannot be predicted with certainty, we do not believe that the ultimate resolution of any matters currently pending will have a material effect on our financial statements.
Our business involves significant risks, some of which are described below, and you should carefully consider the risks and uncertainties described below, together with all the other information in this Quarterly Report, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the condensed consolidated financial statements and the related notes. If any of the following risks actually occur, our business, reputation, financial condition, results of operations, revenue, key performance metrics, and future prospects could be seriously harmed. In addition, you should consider the interrelationship and compounding effects of two or more risks occurring simultaneously, and unless otherwise indicated, references to our business being harmed in these risk factors will include harm to our business, reputation, financial condition, results of operations, revenue, key performance metrics, and future prospects. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment.
Our operating results may fluctuate from period to period, and past performance may not be indicative of future results. For the period ended March 31, 2026, we generated revenue of $1,248,879,000 and net income of $85,700,000, and there can be no assurance that we will sustain revenue growth or profitability in future periods. Our cost of revenue increased 18.8% period over period to $683,943,000, and our accounts receivable increased 15.7% to $752,586,000, and continued increases in our costs or in amounts owed to us that we are unable to collect could adversely affect our results of operations and cash flows. In addition, our cash and cash equivalents declined 26.9% to $1,649,877,000, and if our liquidity position deteriorates, we may be required to seek additional financing on terms that may not be favorable to us.
Our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments, and changes in interest rates could adversely affect the value of our investment portfolio and the interest income we earn. From time to time, we are involved in legal proceedings arising in the ordinary course of business, and the outcomes of such matters are inherently uncertain. Although management does not currently believe that any pending matter is material to our financial statements, litigation is unpredictable, and an adverse outcome in one or more matters could harm our business. [COMPLETE: full discussion of company-specific risk factors, including risks related to competition, the streaming platform and advertising business, supply chain and hardware, key personnel, intellectual property, regulatory matters, and ownership of Class A common stock, or a statement that there have been no material changes from the risk factors disclosed in the most recent Annual Report on Form 10-K]
During the quarter ended March 31, 2026, the following disclosure is provided pursuant to Item 408(a) of Regulation S-K regarding the adoption or termination of Rule 10b5-1 trading arrangements by the Company's directors and officers. [COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]