Roku’s Q3 Earnings: Revenue Soars 14%, Operating Income Positive Since 2021
Roku recently announced its third-quarter financial results for 2025, highlighting significant growth in both revenue and net income. This marks the company’s first occurrence of positive operating income since 2021, signaling a strong upward trend in its performance.
Roku’s Strong Q3 Performance
For Q3, Roku reported a revenue of $1.21 billion, reflecting a 14% increase year-over-year. The net income reached $24.8 million, a substantial turnaround from the net loss of $35.8 million during the same period last year. The earnings per diluted share stood at 16 cents.
- Revenue: $1.21 billion (up 14%)
- Net Income: $24.8 million (compared to a net loss of $35.8 million)
- Earnings per Share: 16 cents
Expectation vs. Reality
Analysts had anticipated a revenue of approximately $1.1 billion and adjusted earnings of 9 cents per share. Despite exceeding these expectations, Roku’s shares declined over 6% in after-hours trading as investors hoped for even stronger results.
Streaming Growth and Future Projections
Total streaming hours on Roku reached 36.5 billion, marking a 12% year-over-year increase. The company has also updated its full-year outlook for Platform revenue, now expecting it to be $4.11 billion, up from the previous forecast of $4.075 billion.
- Platform Revenue: $1.065 billion (up 17%)
- Devices Revenue: $146 million (down 5%)
The Platform segment’s operating margin was reported at 51.7%, while Devices margin fell to -15.7%. Total operating expenses remained stable at $515.4 million, resulting in an operating profit of $9.5 million.
Outlook for Q4 and Future Growth
Looking ahead, Roku projects total net revenue of around $1.35 billion for Q4, representing a 12% growth. The Platform revenue is expected to increase by 15% year-over-year, with a projected gross margin of approximately 52%.
Excluding political advertising and the acquisition of Frndly TV, the growth rate for Platform revenue is anticipated to increase slightly from Q3. The company estimates a gross profit of about $575 million and adjusted EBITDA of roughly $145 million for the fourth quarter.
New Offerings and Strategic Moves
Recently, Roku launched Howdy, a new subscription-based video service priced at $2.99 per month. This ad-free service offers nearly 10,000 hours of content from various partners, targeting a budget-conscious audience. Roku aims to broaden its offerings with this lower-cost alternative to major VOD services.
Meanwhile, The Roku Channel continues to thrive, remaining the No. 2 app in the U.S. by engagement. Recent content additions include new channels for popular shows like “Shark Tank” and “NYPD Blue.”
Among original programming, “Solo Traveling With Tracee Ellis Ross” has become Roku’s most-watched unscripted original and is set for a second season following a Critic’s Choice nomination. Additionally, Lisa Holme has been appointed as Roku Media’s head of content, focusing on enhancing the company’s content portfolio globally.
