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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to
Commission File Number: 001-38211

Roku, Inc.
(Exact name of registrant as specified in its charter)

Delaware 26-2087865
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)

1173 Coleman Avenue
San Jose , California 95110
(Address of principal executive offices including zip code)
Registrant’s telephone number, including area code: ( 408 ) 556-9040

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class: Trading Symbol(s): Name of Exchange on Which Registered:
Class A Common Stock, $0.0001 par value ROKU The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer ☒ Accelerated filer ☐
Non-accelerated filer ☐ Smaller reporting company ☐
Emerging growth company ☐    

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of September 30, 2025, the registrant had 130,797,707 shares of Class A common stock, $0.0001 par value per share, and 16,954,064 shares of Class B common stock, $0.0001 par value per share, outstanding.

Table of Contents

Table of Contents

    Page
PART I. FINANCIAL INFORMATION
1

Item 1. Financial Statements (Unaudited)
1

  Condensed Consolidated Balance Sheets
1

  Condensed Consolidated Statements of Operations
2

Condensed Consolidated Statements of Comprehensive Income (Loss)
3

  Condensed Consolidated Statements of Stockholders’ Equity
4

  Condensed Consolidated Statements of Cash Flows
5

  Notes to Condensed Consolidated Financial Statements
7

1. The Company
7

2. Summary of Significant Accounting Policies
7

3. Revenue
10

4. Business Combination
10

5. Goodwill and Intangible Assets
11

6. Balance Sheet Components
13

7. Content Assets
14

8. Strategic Investments
15

9. Fair Value Disclosure
16

10. Leases
18

11. Debt
19

12. Stockholders’ Equity
19

13. Commitments and Contingencies
22

14. Income Taxes
23

15. Net Income (Loss) Per Share
23

16. Segment Information
24

17. Restructuring Charges
25

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
27

Item 3. Quantitative and Qualitative Disclosures About Market Risk
35

Item 4. Controls and Procedures
36

PART II. OTHER INFORMATION
37

Item 1. Legal Proceedings
37

Item 1A. Risk Factors
37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
68

Item 3. Defaults Upon Senior Securities
69

Item 4. Mine Safety Disclosures
69

Item 5. Other Information
69

Item 6. Exhibits
70

Signatures
71

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GLOSSARY OF SELECTED TERMS
As used in this Quarterly Report on Form 10-Q (“Quarterly Report”), unless the context otherwise requires, references to the following terms have the respective meaning as defined below.
Ad-supported Video on Demand (AVOD) : Streaming content supported by advertising that does not charge a fee to the viewer.
Apps : Primarily refers to the direct-to-consumer streaming applications on the Roku platform (e.g., The Roku Channel or Netflix). We also use “apps” to refer to mobile applications (such as our Roku Smart Home app).
Average Revenue per User (ARPU): Platform revenue for the trailing four quarters divided by the average of the number of Streaming Households at the end of the current period and the end of the corresponding period in the prior year.
Demand-side platform (DSP): Programmatic advertising technology that allows advertisers and advertising agencies to buy advertising inventory across multiple platforms and publishers through one interface.
FAST: Free, ad-supported linear streaming TV, which does not include on-demand content.
Licensed Roku TV partners: TV original equipment manufacturers (“OEMs”) that license the Roku TV OS and leverage our smart TV reference designs to build TVs.
Linear TV: A TV format that provides programming at specifically scheduled times.
Premium Subscriptions: Subscription-based streaming services from content partners (e.g., Paramount) offered through The Roku Channel.
Roku-branded TVs: TVs powered by the Roku TV OS that are designed, made, and sold by Roku. Roku-branded TVs include the Roku Select, Roku Plus, and Roku Pro Series TVs.
Roku Experience : The user experience on the Roku platform, representing all the features that Roku builds and operates to engage, delight, and help our viewers easily find great entertainment.
Roku Home Screen: The first screen the viewer sees when they begin streaming with a Roku streaming device. The viewer is also returned to the Roku Home Screen by pressing the home button on the Roku remote or when exiting apps.
Roku Home Screen Menu: The left-hand navigation bar on the Roku Home Screen.
Roku Originals: Original content programming created by Roku.
Roku TV OS (or Roku platform): Roku operating system that is purpose built for TV and powers Roku streaming devices.
Roku TV models: TVs powered by the Roku TV OS that are made and sold by our licensed Roku TV partners.
Supply-side platform (SSP): Programmatic advertising technology that enables publishers to sell their advertising inventory to multiple demand sources.
Streaming: The distribution of video, music, or other media content via the internet.
Streaming device : Any device that enables streaming. Roku streaming devices include Roku streaming players, Roku TV models, and Roku-branded TVs.
Streaming Hours: The aggregate amount of time streaming devices stream content on Roku’s streaming platform in a given period. See Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Key Performance Metrics and Non-GAAP Measures, elsewhere in this Quarterly Report for additional detail.
Streaming Households : The number of distinct user accounts that have streamed on our platform within the last 30 days of the period.
Streaming platform: The technology that delivers the viewer experience and streaming apps (e.g., The Roku Channel and Netflix) over an internet connection to a user’s TV.
Streaming players : A device that connects to a TV via an HDMI connection to enable streaming to the TV (such as the Roku Express, Roku Express 4K, Roku Streaming Stick 4K, Roku Ultra, Roku Streambar, and Roku Streambar Pro).
Smart TV: A television that is connected to the internet through an operating system (e.g., the Roku TV OS).
Subscription Video on Demand (SVOD): Streaming content that is available on demand, requires a paid subscription, and can be ad-supported or ad-free.
TV streaming : The act of streaming content over the internet on a TV.
The Roku Channel: A Roku owned and operated streaming service. The Roku Channel aggregates three types of content—AVOD, FAST, and Premium Subscriptions—within The Roku Channel app and through viewing experiences integrated throughout the Roku platform (e.g., Live TV on the Roku Home Screen Menu).
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NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts in this Quarterly Report, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “design,” “developing,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “seek,” “should,” “will,” “would,” “target,” or the negative of these terms or other similar expressions. We caution you that the foregoing may not encompass all of the forward-looking statements made in this Quarterly Report.
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties, and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this Quarterly Report, regarding, among other things:
• our financial performance, including our revenue, cost of revenue, operating expenses, profitability, and key performance metrics;
• the impact of macroeconomic conditions and uncertainties, such as tariffs, inflation, and geopolitical conflicts, on our business, operations, and the markets and communities in which we and our advertisers, content partners, licensed Roku TV partners, other device licensees, manufacturers, suppliers, retailers, and viewers operate;
• our ability to attract and retain viewers and increase Streaming Hours;
• our ability to attract and retain advertisers to purchase advertising on our streaming platform;
• our ability to attract and retain TV brands and manufacturing partners to license and deploy our technology;
• our ability to produce or acquire rights to distribute popular content on our streaming platform on favorable terms, or at all, including the renewals of our existing agreements with content partners;
• changes in TV viewing habits and the growth of TV streaming;
• the growth of our relevant markets, including the growth in advertising spend on TV streaming platforms, and our ability to successfully grow our business in those markets;
• our ability to adapt to changing market conditions and technological developments;
• our ability to develop and launch new products and provide ancillary services and support;
• our ability to integrate and realize the anticipated benefits of acquired businesses, products, and technologies;
• our ability to expand our products and services into adjacent markets, scale our operations in these markets, and do so profitably over time;
• our ability to compete effectively with existing competitors and new market entrants;
• our ability to successfully manage domestic and international expansion;
• our ability to attract and retain qualified employees and key personnel;
• our ability to address potential and actual cybersecurity incidents and system failures involving our products, systems, and operations;
• our ability to maintain, protect, and enhance our intellectual property;
• our ability to obtain financing on favorable terms, or at all;
• our ability to repurchase shares of our common stock;
• our ability to manage the selling prices of our products to increase Streaming Households; and
• our ability to comply with laws and regulations that currently apply or may become applicable to our business both in the United States and internationally, including compliance with privacy and data protection regulations.
Other sections of this Quarterly Report may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report or to conform these statements to actual results or to changes in our expectations. You should read this Quarterly Report, and the documents referenced in and filed as exhibits to this Quarterly Report, with the understanding that our actual future results, levels of activity, performance, and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (roku.com/investor), our blog (roku.com/blog), U.S. Securities and Exchange Commission (“SEC”) filings, webcasts, press releases, and conference calls. We use these mediums to communicate with investors and the general public about our company, our products and services, and other issues. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors, the media, and others interested in our company to review the information that we post on our investor relations website. Roku, the Roku logo, and other trade names, trademarks, or service marks of Roku appearing in this report are the property of Roku. Trade names, trademarks, and service marks of other companies appearing in this report are the property of their respective holders. Information contained on or accessible through the websites listed above is not incorporated by reference nor otherwise included in this Quarterly Report, and any references to these websites are intended to be inactive textual references only.
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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

ROKU, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data)
(unaudited)

  As of
  September 30, 2025 December 31, 2024
Assets
Current assets:
Cash and cash equivalents $ 1,575,491   $ 2,160,236  
Short-term investments 726,875   —  
Accounts receivable, net of allowances of $ 60,345 and $ 72,657 as of September 30, 2025 and December 31, 2024, respectively
745,405   812,510  
Inventories 140,682   158,271  
Prepaid expenses and other current assets 140,239   103,146  
Total current assets 3,328,692   3,234,163  
Property and equipment, net 182,809   213,690  
Operating lease right-of-use assets 272,877   304,505  
Content assets, net 175,126   237,321  
Intangible assets, net 56,540   27,501  
Goodwill 309,406   161,519  
Other non-current assets 71,835   125,234  
Total Assets $ 4,397,285   $ 4,303,933  
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 159,455   $ 273,985  
Accrued liabilities 933,717   852,799  
Deferred revenue, current portion 122,309   105,718  
Total current liabilities 1,215,481   1,232,502  
Deferred revenue, non-current portion 28,046   25,050  
Operating lease liability, non-current portion 457,405   512,706  
Other long-term liabilities 71,267   40,938  
Total Liabilities 1,772,199   1,811,196  
Commitments and contingencies (Note 13)
Stockholders’ Equity:
Common stock, $ 0.0001 par value
15   15  
Additional paid-in capital 4,092,846   3,921,432  
Accumulated other comprehensive income (loss) 1,314   ( 1,737 )
Accumulated deficit ( 1,469,089 ) ( 1,426,973 )
Total stockholders’ equity 2,625,086   2,492,737  
Total Liabilities and Stockholders’ Equity $ 4,397,285   $ 4,303,933  

See accompanying Notes to Condensed Consolidated Financial Statements.
1

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ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)

  Three Months Ended Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Net revenue:
Platform $ 1,064,644   $ 908,175   $ 2,920,932   $ 2,487,443  
Devices 145,994   154,028   421,416   424,408  
Total net revenue 1,210,638   1,062,203   3,342,348   2,911,851  
Cost of revenue:
Platform 516,869   416,396   1,411,170   1,161,416  
Devices 168,870   165,732   463,576   457,369  
Total cost of revenue 685,739   582,128   1,874,746   1,618,785  
Gross profit (loss):
Platform 547,775   491,779   1,509,762   1,326,027  
Devices ( 22,876 ) ( 11,704 ) ( 42,160 ) ( 32,961 )
Total gross profit 524,899   480,075   1,467,602   1,293,066  
Operating expenses:
Research and development 182,235   178,798   544,831   534,738  
Sales and marketing 242,077   237,047   709,026   660,827  
General and administrative 91,121   99,993   285,342   276,543  
Total operating expenses 515,433   515,838   1,539,199   1,472,108  
Income (loss) from operations 9,466   ( 35,763 ) ( 71,597 ) ( 179,042 )
Other income, net:
Interest expense ( 455 ) —   ( 1,348 ) —  
Other income, net 29,019   30,880   75,134   84,955  
Total other income, net 28,564   30,880   73,786   84,955  
Income (loss) before income taxes 38,030   ( 4,883 ) 2,189   ( 94,087 )
Income tax expense (benefit) 13,218   4,147   ( 5,695 ) ( 249 )
Net income (loss) $ 24,812   $ ( 9,030 ) $ 7,884   $ ( 93,838 )

Net income (loss) per share — basic $ 0.17   $ ( 0.06 ) $ 0.05   $ ( 0.65 )
Net income (loss) per share — diluted $ 0.16   $ ( 0.06 ) $ 0.05   $ ( 0.65 )

Weighted-average common shares outstanding — basic 147,466 144,862 146,855   144,319  
Weighted-average common shares outstanding — diluted 151,580 144,862 150,449   144,319  

See accompanying Notes to Condensed Consolidated Financial Statements.
2

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ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Net income (loss) $ 24,812   $ ( 9,030 ) $ 7,884   $ ( 93,838 )
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment ( 120 ) 614   3,051   ( 206 )
Comprehensive income (loss) $ 24,692   $ ( 8,416 ) $ 10,935   $ ( 94,044 )

See accompanying Notes to Condensed Consolidated Financial Statements.
3

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ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)

  Common Stock Additional
Paid-in Capital Accumulated
Other Comprehensive
Income (Loss) Accumulated
Deficit Total
Stockholders’
Equity
Three Months Ended September 30, 2025 Shares Amount
Balance—June 30, 2025 147,331   $ 15   $ 4,033,004   $ 1,434   $ ( 1,443,901 ) $ 2,590,552  
Issuance of common stock pursuant to equity incentive plans 1,443   —  15,374   —  —  15,374  
Stock-based compensation expense —  —  88,031   —  —  88,031  
Shares withheld for taxes related to net share settlement of equity awards ( 455 ) —  ( 43,563 ) —  —  ( 43,563 )
Repurchases and retirement of common stock ( 568 ) —  —  —  ( 50,000 ) ( 50,000 )
Foreign currency translation adjustment —  —  —  ( 120 ) —  ( 120 )
Net income —  —  —  —  24,812   24,812  
Balance—September 30, 2025 147,751   $ 15   $ 4,092,846   $ 1,314   $ ( 1,469,089 ) $ 2,625,086  

Nine Months Ended September 30, 2025
Balance—December 31, 2024 145,910   $ 15   $ 3,921,432   $ ( 1,737 ) $ ( 1,426,973 ) $ 2,492,737  
Issuance of common stock pursuant to equity incentive plans 3,795   —  18,320   —  —  18,320  
Stock-based compensation expense —  —  268,165   —  —  268,165  
Shares withheld for taxes related to net share settlement of equity awards ( 1,386 ) —  ( 115,071 ) —  —  ( 115,071 )
Repurchases and retirement of common stock ( 568 ) —  —  —  ( 50,000 ) ( 50,000 )
Foreign currency translation adjustment —  —  —  3,051   —  3,051  
Net income —  —  —  —  7,884   7,884  
Balance—September 30, 2025 147,751   $ 15   $ 4,092,846   $ 1,314   $ ( 1,469,089 ) $ 2,625,086  

  Common Stock Additional
Paid-in Capital Accumulated
Other Comprehensive
Income (Loss) Accumulated
Deficit Total
Stockholders’
Equity
Three Months Ended September 30, 2024 Shares Amount
Balance—June 30, 2024 144,689   $ 14   $ 3,773,831   $ ( 661 ) $ ( 1,382,395 ) $ 2,390,789  
Issuance of common stock pursuant to equity incentive plans 852   1   301   —  —  302  
Stock-based compensation expense —  —  100,096   —  —  100,096  
Shares withheld for taxes related to net share settlement of equity awards ( 342 ) —  ( 22,261 ) —  —  ( 22,261 )
Foreign currency translation adjustment —  —  —  614   —  614  
Net loss —  —  —  —  ( 9,030 ) ( 9,030 )
Balance—September 30, 2024 145,199   $ 15   $ 3,851,967   $ ( 47 ) $ ( 1,391,425 ) $ 2,460,510  

Nine Months Ended September 30, 2024
Balance—December 31, 2023 143,502   $ 14   $ 3,623,747   $ 159   $ ( 1,297,587 ) $ 2,326,333  
Issuance of common stock pursuant to equity incentive plans 2,724   1   8,980   —  —  8,981  
Stock-based compensation expense —  —  283,124   —  —  283,124  
Shares withheld for taxes related to net share settlement of equity awards ( 1,027 ) —  ( 63,884 ) —  —  ( 63,884 )
Foreign currency translation adjustment —  —  —  ( 206 ) —  ( 206 )
Net loss —  —  —  —  ( 93,838 ) ( 93,838 )
Balance—September 30, 2024 145,199   $ 15   $ 3,851,967   $ ( 47 ) $ ( 1,391,425 ) $ 2,460,510  

See accompanying Notes to Condensed Consolidated Financial Statements.
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ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)

  Nine Months Ended
  September 30, 2025 September 30, 2024
Cash flows from operating activities:
Net income (loss) $ 7,884   $ ( 93,838 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 51,514   47,629  
Stock-based compensation expense 268,165   283,124  
Amortization of right-of-use assets 36,231   35,674  
Amortization and write-off of content assets 153,608   158,892  
Foreign currency remeasurement losses 196   674  
Change in fair value of strategic investment in convertible promissory notes 324   ( 6,978 )
Change in fair value of contingent consideration 1,394   —  
Impairment of assets 2,870   29,118  
Provision for doubtful accounts 2,252   2,081  
Other items, net ( 1,952 ) ( 2,224 )
Changes in operating assets and liabilities:
Accounts receivable 71,033   83,828  
Inventories 17,589   ( 99,084 )
Prepaid expenses and other current assets ( 1,041 ) ( 40,952 )
Content assets and liabilities, net ( 123,461 ) ( 141,345 )
Other non-current assets 6,859   ( 19,996 )
Accounts payable ( 120,826 ) ( 57,937 )
Accrued liabilities 75,615   14,044  
Operating lease liabilities ( 60,338 ) ( 45,766 )
Other long-term liabilities ( 7,456 ) 1,866  
Deferred revenue ( 4,392 ) ( 10,057 )
Net cash provided by operating activities 376,068   138,753  
Cash flows from investing activities:
Purchases of property and equipment ( 4,189 ) ( 2,603 )
Purchase of business, net of cash acquired ( 95,090 ) —  
Purchases of strategic investments ( 7,000 ) ( 20,000 )
Purchases of short-term investments ( 725,000 ) —  
Repayment of convertible promissory note 10,000   —  
Net cash used in investing activities ( 821,279 ) ( 22,603 )
Cash flows from financing activities:
Issuance costs related to credit agreement —   ( 1,829 )
Proceeds from equity issued under incentive plans 18,320   8,981  
Taxes paid related to net share settlement of equity awards ( 115,071 ) ( 63,884 )
Repurchases of common stock ( 50,000 ) —  
Net cash used in financing activities ( 146,751 ) ( 56,732 )
Net increase (decrease) in cash, cash equivalents and restricted cash ( 591,962 ) 59,418  
Effect of exchange rate changes on cash, cash equivalents and restricted cash 6,814   2,774  
Cash, cash equivalents and restricted cash—beginning of period 2,160,639   2,066,604  
Cash, cash equivalents and restricted cash—end of period $ 1,575,491   $ 2,128,796  

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Nine Months Ended
September 30, 2025 September 30, 2024
Cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents $ 1,575,491   $ 2,126,974  
Restricted cash, current —   1,822  

Cash, cash equivalents and restricted cash—end of period $ 1,575,491   $ 2,128,796  
Supplemental disclosures of cash flow information:
Cash paid for interest $ 693   $ 106  
Cash paid for income taxes $ 12,523   $ 13,235  
Supplemental disclosures of non-cash investing and financing activities:
Non-cash contingent consideration for business combination $ 65,815   $ —  
Unpaid portion of property and equipment purchases $ 71   $ 169  

See accompanying Notes to Condensed Consolidated Financial Statements.
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ROKU, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY
Organization and Description of Business
Roku, Inc. (the “Company” or “Roku”), was formed in October 2002 as Roku LLC under the laws of the State of Delaware. On February 1, 2008, Roku LLC was converted into Roku, Inc., a Delaware corporation. The Company operates in two reportable segments and generates platform revenue from the sale of digital advertising (including direct and programmatic video advertising, ads integrated into the Company’s user interface, and related services) and streaming services distribution (including subscription and transaction revenue shares, the sale of Premium Subscriptions, the sale of owned and operated subscription services, and the sale of branded app buttons on remote controls). The Company generates devices revenue from the sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The condensed consolidated financial statements, which include the accounts of Roku and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 14, 2025 (the “Annual Report”).
The condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report. The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the operating results to be expected for the full year or any future periods.
All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts reported in our condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period presentation.
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses. Significant items subject to such estimates and assumptions include:
• revenue recognition: determining the nature and timing of satisfaction of performance obligations, variable consideration, determining the stand-alone selling prices of performance obligations, gross versus net revenue recognition, and evaluation of customer versus vendor relationships;
• amortization and impairment of content assets;
• the impairment of long-lived assets;
• inventory reserves;
• valuation of consideration transferred, assets acquired, and liabilities assumed in connection with business combinations (see Note 4);
• valuation of strategic investments (see Note 9);
• useful lives of tangible and intangible assets;
• allowances for sales returns and sales incentives; and
• the valuation of deferred income tax assets.
The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ from the Company’s estimates and assumptions.
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Cash and Cash Equivalents and Restricted Cash
The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist primarily of bank deposit accounts and investments in money market funds.
The Company’s restricted cash balance is included in Prepaid expenses and other current assets in the condensed consolidated balance sheets and is used to secure outstanding letters of credit related to operating leases for office facilities.
The Company maintains its cash, cash equivalent, and restricted cash balances with financial institutions of high credit quality and continuously monitors the amount of exposure to any one institution and diversifies as necessary in order to minimize its concentration risk. Such balances often exceed regulated insured limits.
Short-term Investments
Short-term investments consist of time deposits that are carried at cost plus accrued interest, which approximates fair value, and have original maturities of greater than three months at the date of purchase. Interest is recorded as income when earned.
Accounts Receivable, Net
Accounts receivable are typically unsecured and are derived from revenue earned from customers. They are stated at invoice value less estimated allowances for sales returns, sales incentives, doubtful accounts, and other miscellaneous allowances. The Company performs ongoing credit evaluations of its customers to determine allowances for potential credit losses and doubtful accounts. The Company considers historical experience, ongoing promotional activities, historical claim rates, and other factors to determine the allowances for sales returns and sales incentives.
Allowance for Sales Returns : Allowance for sales returns consisted of the following activities (in thousands):

  Three Months Ended Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Beginning balance $ 5,617   $ 6,376   $ 6,427   $ 7,808  
Add: Charged to revenue 2,657   3,733   11,575   12,307  
Less: Utilization of sales return reserve ( 4,145 ) ( 4,039 ) ( 13,873 ) ( 14,045 )
Ending balance $ 4,129   $ 6,070   $ 4,129   $ 6,070  

Allowance for Sales Incentives : Allowance for sales incentives consisted of the following activities (in thousands):

  Three Months Ended   Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Beginning balance $ 42,514   $ 26,641   $ 63,367   $ 23,024  
Add: Charged to revenue 50,187   37,622   143,321   93,655  
Less: Utilization of sales incentive reserve ( 41,117 ) ( 36,292 ) ( 155,104 ) ( 88,708 )
Ending balance $ 51,584   $ 27,971   $ 51,584   $ 27,971  

Allowance for Doubtful Accounts : Allowance for doubtful accounts consisted of the following activities (in thousands):

Three Months Ended   Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Beginning balance $ 2,656   $ 5,869   $ 1,895   $ 2,213  
Provision for (recoveries of) doubtful accounts 838   ( 2,263 ) 2,252   2,081  
Adjustments for write-off ( 21 ) ( 323 ) ( 674 ) ( 1,011 )
Ending balance $ 3,473   $ 3,283   $ 3,473   $ 3,283  

Customers J and L accounted for 13 % and 10 %, respectively, of the Company’s accounts receivable, net balance as of September 30, 2025. Customers J and B accounted for 12 % and 10 %, respectively, of the Company’s accounts receivable, net balance as of December 31, 2024 .
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Inventories
The Company’s inventories consist primarily of finished goods and are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. Provisions are made if the cost of the inventories exceeds their net realizable value. The Company evaluates inventory levels for excess and obsolete products, based on its assessment of future demand and market conditions. During the three months ended September 30, 2025, the Company recognized an inventory provision of $ 17.0 million charged to Cost of revenue, devices. The inventory provision was not significant for the three months ended September 30, 2024. During the nine months ended September 30, 2025 and 2024, the Company recognized inventory provisions of $ 27.4 million and $ 1.2 million, respectively, charged to Cost of revenue, devices. As of September 30, 2025 and December 31, 2024, the ending inventory reserve was $ 19.3 million and $ 28.7 million, respectively.
In addition, the Company records a liability for expected losses on firm, noncancelable, and unconditional purchase commitments with contract manufacturers and suppliers. During the three months ended September 30, 2025 and 2024, the Company recorded losses on purchase commitments in Cost of revenue, devices of $ 0.4 million and $ 10.4 million, respectively . During the nine months ended September 30, 2025 and 2024, the Company recorded losses on purchase commitments in Cost of revenue, devices of $ 0.7 million and $ 31.7 million , respectively. The associated liabilities related to the anticipated losses on firm purchase commitments were immaterial as of September 30, 2025 and December 31, 2024.
Business Combinations
The Company determines whether a transaction meets the definition of a business combination before applying the acquisition method of accounting to that transaction. The Company recognizes and measures tangible and intangible assets acquired and liabilities assumed based on their acquisition date fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. The operating results of acquired businesses are included in the Company’s condensed consolidated statements of operations from their acquisition date. Acquisition-related expenses and certain acquisition restructuring and other related charges are recognized separately from the business combination and are expensed as incurred. Contingent consideration classified as a liability is recognized at fair value as of the acquisition date with subsequent fair value adjustments recorded in the condensed consolidated statements of operations.
While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, such estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may record adjustments to consideration transferred, and to the assets acquired and liabilities assumed with the corresponding offset to goodwill. In addition, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. The Company continues to collect information and reevaluates these estimates and assumptions throughout the measurement period, recording any adjustments to the Company’s preliminary estimates with a corresponding offset to goodwill as necessary. Upon the conclusion of the measurement period or the final determination of the values of consideration transferred, and assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the condensed consolidated statements of operations.
Recent Accounting Pronouncements
In September 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The guidance is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years on a retrospective, modified, or prospective basis. The Company is currently in the process of evaluating the effects of the new guidance.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. The guidance is effective for fiscal years beginning after December 15, 2025 and interim periods within those fiscal years on a prospective basis. The Company is currently in the process of evaluating the effects of the new guidance.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses , which requires additional disclosures of specific expense categories in the notes to the financial statements on an annual and interim basis. The guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027 on a retrospective or prospective basis. The Company is currently in the process of evaluating the effects of the new guidance.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) - Improvements to Income Tax Disclosures , which requires incremental disclosures within the income tax disclosures that increase the transparency and usefulness of income tax disclosures. The updated disclosures primarily require specific categories and greater
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disaggregation within the rate reconciliation, disaggregation of income taxes paid, and modifications of other income tax-related disclosures. The guidance is effective for annual periods beginning after December 15, 2024. Retrospective application is also permitted. The Company is currently in the process of evaluating the effects of the new guidance.

3. REVENUE
The Company’s disaggregated revenue is represented by the two reportable segments discussed in Note 16.
The contract balances include the following (in thousands):

  As of
  September 30, 2025 December 31, 2024
Accounts receivable, net $ 745,405   $ 812,510  
Contract assets (included in Prepaid expenses and other current assets) 1,593   1,687  
Deferred revenue:
Deferred revenue, current portion 122,309   105,718  
Deferred revenue, non-current portion 28,046   25,050  
Total deferred revenue $ 150,355   $ 130,768  

Accounts receivable are recorded at the amount invoiced, net of an allowance for sales returns, sales incentives, and doubtful accounts. Payment terms can vary by customer and contract.
The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets are created when invoicing occurs subsequent to revenue recognition. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. The Company’s contract assets are current in nature and are included in Prepaid expenses and other current assets.
Deferred revenue reflects consideration invoiced prior to the completion of performance obligations and revenue recognition. Deferred revenue increased by $ 19.6 million during the nine months ended September 30, 2025 primarily due to the timing of fulfillment of performance obligations related to advertising arrangements, growth in Premium Subscriptions, and a business combination. See Note 4 for additional details.
Revenue recognized during the three and nine months ended September 30, 2025, from amounts included in total deferred revenue as of December 31, 2024, was $ 13.9 million and $ 74.1 million, respectively. Revenue recognized during the three and nine months ended September 30, 2024, from amounts included in total deferred revenue as of December 31, 2023, was $ 10.5 million and $ 92.8 million, respectively.
Revenue allocated to remaining performance obligations represents estimated contracted revenue that has not yet been recognized, which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Remaining performance obligations exclude contracts with original expected terms of one year or less. Estimated contracted revenue for these remaining performance obligations was $ 1.1 billion as of September 30, 2025, of which the Company expects to recognize approximately 54 % over the next 12 months and the remainder thereafter.
Revenue recognized from performance obligations that were satisfied in previous periods due to changes in the estimated transaction price of the Company’s revenue contracts was not significant during the three and nine months ended September 30, 2025. The Company recognized $ 12.0 million and $ 15.8 million of revenue during the three and nine months ended September 30, 2024, respectively, from performance obligations that were satisfied in previous periods due to changes in the estimated transaction price of the Company’s revenue contracts.
Customer J accounted for 11 % of the Company’s total net revenue during the three and nine months ended September 30, 2025, and 11 % of the Company’s total net revenue during the three months ended September 30, 2024 . The Company did not have any customer that individually accounted for 10% or more of its total net revenue during the nine months ended September 30, 2024.

4. BUSINESS COMBINATION
On May 9, 2025 (the “Acquisition Date”), the Company acquired all of the outstanding shares of Frndly TV, Inc. (“Frndly”), a subscription streaming service that offers live TV, on-demand video, and cloud-based DVR for an affordable price. The total purchase consideration (the “Purchase Consideration”) was $ 169.8 million, consisting primarily of cash of $ 103.6 million and the fair value of contingent consideration of $ 65.8 million. The acquisition supports the Company’s focus on growing Platform revenue and Roku-billed subscriptions.
The Company will pay contingent consideration of up to $ 75.0 million in cash upon the achievement of certain performance metrics and milestones over the two years following the Acquisition Date. See Note 9 to the condensed consolidated financial statements for details on the fair value of the contingent consideration.
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The Company incurred $ 3.5 million in acquisition-related expenses and has recorded them in General and administrative expenses in the condensed consolidated statements of operations.
The purchase price allocation below is preliminary in nature. The estimates and assumptions regarding the fair value of contingent consideration, certain tangible assets acquired and liabilities assumed, the valuation of intangible assets acquired, income taxes, and goodwill are subject to change as the Company obtains additional information on the facts and circumstances that existed as of the Acquisition Date during the measurement period.
The preliminary allocation of the Purchase Consideration to tangible and intangible assets acquired and liabilities assumed is based on estimated fair values at the Acquisition Date and is as follows (in thousands):

Fair Values
Assets Acquired
Cash and cash equivalents $ 8,481  
Accounts receivable 5,610  
Prepaid expenses and other assets 432  
Operating lease right-of-use asset 640  
Intangible assets 46,000  
Goodwill 147,887  
Total assets acquired 209,050  
Liabilities Assumed
Accounts payable 5,986  
Accrued liabilities 9,918  
Deferred revenue 16,956  
Operating lease liability 358  
Deferred tax liability 6,031  
Total liabilities assumed 39,249  
Total Purchase Consideration $ 169,801  

The excess of the total Purchase Consideration over the tangible assets, intangible assets, and liabilities assumed is recorded as goodwill. Goodwill is primarily attributable to expected synergies and economies of scale expected from combining the operations of Roku and Frndly. The goodwill recorded is not deductible for tax purposes.
The valuation of the intangible assets acquired from Frndly along with their estimated useful lives at the Acquisition Date, is as follows (in thousands, except years):

Estimated Fair Value Estimated Weighted-Average Useful Lives
(in years)
Customer relationships $ 32,000   7.3
Tradename 14,000   5.0
Estimated fair value of acquired intangible assets $ 46,000   6.6

The operations of Frndly are included in the Company’s operating results beginning on the Acquisition Date. Historical and pro forma disclosures are not required given the size of Frndly relative to the Company.

5. GOODWILL AND INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of purchase consideration in a business combination over the fair value of tangible and intangible assets acquired net of the liabilities assumed. All goodwill relates to the platform segment.
The following table reflects the changes in the carrying value of goodwill (in thousands):

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Carrying Value
Balance as of December 31, 2024 $ 161,519  
Frndly acquisition (see Note 4) 147,887  
Balance as of September 30, 2025 $ 309,406  

Intangible Assets
The following tables summarize the Company’s intangible assets for the periods presented (in thousands, except years):

As of September 30, 2025
Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Useful Lives
(in years)
Developed technology $ 73,367   $ ( 69,753 ) $ 3,614   5.9
Customer relationships 46,100   ( 19,320 ) 26,780   6.3
Tradename 34,400   ( 10,632 ) 23,768   7.9
Patents 4,076   ( 1,698 ) 2,378   14.0
Total Intangible assets $ 157,943   $ ( 101,403 ) $ 56,540   6.7

As of December 31, 2024
Gross Carrying Amount Accumulated
Amortization Net Carrying Amount Weighted-Average Useful Lives
(in years)
Developed technology $ 73,367   $ ( 60,896 ) $ 12,471   5.9
Customer relationships 14,100   ( 14,100 ) —   4.0
Tradename 20,400   ( 7,966 ) 12,434   9.8
Patents 4,076   ( 1,480 ) 2,596   14.0
Total Intangible assets $ 111,943   $ ( 84,442 ) $ 27,501   6.7

The Company amortizes the fair value of intangible assets over their estimated useful lives in proportion to the economic benefits received. Amortization expense related to intangible assets was approximately $ 8.0 million and $ 3.5 million for the three months ended September 30, 2025 and 2024, respectively, and $ 17.0 million and $ 10.7 million for the nine months ended September 30, 2025 and 2024, respectively. The Company recorded amortization of developed technology in Cost of revenue, platform, amortization of customer relationships and tradename in Sales and marketing expenses, and amortization of patents in General and administrative expenses in the condensed consolidated statements of operations for all periods presented.
As of September 30, 2025, the estimated future amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands):

Year Ending December 31,  
2025 (remaining 3 months) $ 6,333  
2026 14,698  
2027 10,507  
2028 8,419  
2029 7,257  
Thereafter 9,326  
Total $ 56,540  

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6. BALANCE SHEET COMPONENTS
Accounts Receivable, net : Accounts receivable, net consisted of the following (in thousands):

  As of
  September 30, 2025 December 31, 2024
Accounts receivable, gross $ 805,750   $ 885,167  
Less: Allowances
Allowance for sales returns 4,129   6,427  
Allowance for sales incentives 51,584   63,367  
Allowance for doubtful accounts 3,473   1,895  
Other allowances 1,159   968  
Total allowances 60,345   72,657  
Accounts receivable, net $ 745,405   $ 812,510  

Property and Equipment, net : Property and equipment, net consisted of the following (in thousands):

  As of
  September 30, 2025 December 31, 2024
Computers and equipment $ 51,996   $ 51,741  
Leasehold improvements 287,245   286,585  
Internal-use software 5,916   5,916  
Office equipment and furniture 36,414   35,691  
Property and equipment, gross 381,571   379,933  
Less: Accumulated depreciation and amortization ( 198,762 ) ( 166,243 )
Property and equipment, net $ 182,809   $ 213,690  

Depreciation and amortization expense for property and equipment assets was approximately $ 11.5 million and $ 11.8 million for the three months ended September 30, 2025 and 2024, respectively, and $ 34.6 million and $ 36.9 million for the nine months ended September 30, 2025 and 2024, respectively.
During the three and nine months ended September 30, 2024, the Company recorded impairment charges of $ 6.5 million and $ 7.0 million, respectively, related to property and equipment associated with the leased office facilities that are part of its restructuring efforts. See Note 17 to the condensed consolidated financial statements for additional details. There were no impairment charges related to property and equipment during the three and nine months ended September 30, 2025.
Accrued Liabilities : Accrued liabilities consisted of the following (in thousands):

As of
September 30, 2025 December 31, 2024
Revenue share payable $ 280,845   $ 267,163  
Accrued cost of revenue 156,999   149,135  
Marketing, retail, and merchandising expenses 104,992   112,001  

Operating lease liability, current 86,379   79,221  
Content liability, current 45,778   69,710  
Other accrued expenses 258,724   175,569  
Total Accrued liabilities $ 933,717   $ 852,799  

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Deferred Revenue : Deferred revenue consisted of the following (in thousands):

  As of
  September 30, 2025 December 31, 2024
Platform, current $ 91,890   $ 75,026  
Devices, current 30,419   30,692  
Total deferred revenue, current 122,309   105,718  
Platform, non-current 2,560   —  
Devices, non-current 25,486   25,050  
Total deferred revenue, non-current 28,046   25,050  
Total Deferred revenue $ 150,355   $ 130,768  

Other Long-term Liabilities : Other Long-term liabilities consisted of the following (in thousands):

As of
September 30, 2025 December 31, 2024
Content liability, non-current $ 4,202   $ 18,453  
Other long-term liabilities 15,392   22,485  
Contingent consideration, non-current 51,673   —  
Total Other long-term liabilities $ 71,267   $ 40,938  

7. CONTENT ASSETS
Content assets, net consisted of the following (in thousands):

  As of
  September 30, 2025 December 31, 2024
Licensed content, net and advances $ 100,905   $ 152,851  
Produced content:
Released, less amortization 66,830   65,990
Completed, not released 7,924   23,267
In production 5,684   7,565
Total produced content, net 80,438   96,822
Total Content assets, net and advances $ 181,343   $ 249,673  

Current portion (included in Prepaid expenses and other current assets) $ 6,217   $ 12,352  
Non-current portion $ 175,126   $ 237,321  

Amortization of content assets is included in Cost of revenue, platform in the condensed consolidated statements of operations and is as follows (in thousands):

Three Months Ended Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Licensed content $ 39,590   $ 40,744   $ 119,768   $ 114,979  
Produced content 10,240   10,126   31,065   32,106  
Total amortization costs $ 49,830   $ 50,870   $ 150,833   $ 147,085  

During the three and nine months ended September 30, 2025, the Company wrote off $ 2.8 million of unamortized costs related to produced content assets that were removed from the content library of the Roku Channel. There were no write-offs during the three months ended September 30, 2024. During the nine months ended September 30, 2024, the Company wrote-off $ 11.8 million of unamortized costs related to produced content assets that were removed from the content library of The Roku Channel.
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8. STRATEGIC INVESTMENTS
Investment in Convertible Promissory Notes
In June 2022, the Company agreed to provide financing of up to $ 60.0 million in the aggregate in the form of an investment in the convertible promissory notes of a counterparty with whom the Company has a commercial relationship. The convertible promissory notes accrue interest at 5 % per annum. The Company’s investment consisted of four tranches: (i) Tranche 1 and Tranche 2, maturing on June 15, 2025, with a principal amount of $ 35.0 million and $ 5.0 million, respectively; (ii) Tranche 3, maturing on March 23, 2026, with a principal amount of $ 5.0 million; and (iii) Tranche 4, maturing on May 23, 2026, with a principal amount of $ 5.0 million.
In June 2025, the Company amended the investment agreement, modifying the maturity schedule for Tranche 1. As amended, Tranche 1 is repayable as follows: $ 5.0 million on June 15, 2025, and three equal installments of $ 10.0 million each, repayable on December 31, 2025, March 23, 2026, and May 23, 2026, respectively. The maturity terms for Tranches 2, 3, and 4 were not modified by the amendment. Each tranche remains subject to acceleration of repayment upon the occurrence of an event of default. The Company received repayments from the counterparty totaling $ 10.0 million plus interest, in accordance with the amended repayment schedule for Tranche 1 and for the maturity of Tranche 2.
The convertible promissory notes contain certain redemption features that meet the definition of embedded derivatives and require bifurcation. The Company elected to apply the fair value option and account for the hybrid instrument containing the host contract and the embedded derivatives at fair value as a single instrument, with any subsequent changes in fair value included in Other income, net in the condensed consolidated statements of operations. The convertible promissory notes are included in Prepaid expenses and other current assets on the condensed consolidated balance sheets. See Note 9 to the condensed consolidated financial statements for additional details on the fair value of the convertible promissory notes.
Investment in Preferred Stock
In September 2024, the Company invested $ 20.0 million in cash in exchange for preferred stock in a privately-held company. The Company elected to apply the measurement alternative for equity securities without readily determinable fair values as there are no quoted market prices for the preferred stock. The investment is measured at cost and adjusted to fair value when there is an observable price change from orderly transactions of identical or similar investments, and assessed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. There were no adjustments recognized in the three and nine months ended September 30, 2025. As of September 30, 2025, the carrying value of the Company’s investment was $ 20.0 million, and is included within Other non-current assets on the condensed consolidated balance sheet.
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9. FAIR VALUE DISCLOSURE
The Company’s financial assets and liabilities measured at fair value on a recurring basis are as follows (in thousands):

As of September 30, 2025
Fair Value Level 1 Level 2 Level 3
Assets:
Cash and cash equivalents:
Cash $ 870,491   $ 870,491   $ —   $ —  
Money market funds 705,000   705,000   —   —  

Short-term investments:
Time deposits 726,875   —   726,875   —  
Prepaid expenses and other current assets:
Strategic investment - convertible promissory notes 43,400   —   —   43,400  
Total assets measured and recorded at fair value $ 2,345,766   $ 1,575,491   $ 726,875   $ 43,400  
Liabilities:
Accrued liabilities:
Contingent consideration $ 15,536   $ —   $ —   $ 15,536  
Other long-term liabilities:
Contingent consideration 51,673   —   —   51,673  
Total liabilities measured and recorded at fair value $ 67,209   $ —   $ —   $ 67,209  

As of December 31, 2024
Fair Value Level 1 Level 2 Level 3
Assets:
Cash and cash equivalents:
Cash $ 794,213   $ 794,213   $ —   $ —  
Money market funds 1,366,023   1,366,023   —   —  
Restricted cash, current 403   403   —   —  
Other non-current assets:
Strategic investment - convertible promissory notes 55,225   —   —   55,225  
Total assets measured and recorded at fair value $ 2,215,864   $ 2,160,639   $ —   $ 55,225  

The following table reflects the changes in the fair value of the Company’s convertible promissory notes measured using Level 3 inputs (in thousands):

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Beginning balance $ 40,624   $ 57,450   $ 55,225   $ 53,816  
Change in estimated fair value 2,776   3,344   ( 324 ) 6,978  
Repayment of principal and interest —   —   ( 11,501 ) —  
Ending balance $ 43,400   $ 60,794   $ 43,400   $ 60,794  

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Further, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs in measuring fair value and utilizes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value.
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The three levels of inputs used to measure fair value are as follows:
Level 1 —Quoted prices in active markets for identical assets or liabilities. Financial assets and liabilities measured using Level 1 inputs include cash, cash equivalents, restricted cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities.
Level 2 —Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means. Financial assets measured using Level 2 inputs include time deposits as of September 30, 2025. The Company did not have any Level 2 instruments as of December 31, 2024.
Level 3 —Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.
As of September 30, 2025, the Company measured its strategic investment in convertible promissory notes using Level 3 inputs. The fair value of the strategic investment in convertible promissory notes on the date of purchase was determined to be equal to its principal amount. The Company recorded an unrealized gain of $ 2.8 million and $ 3.3 million in Other income, net related to the change in the fair value of the strategic investment in convertible promissory notes during the three months ended September 30, 2025 and 2024, respectively. The Company recorded an unrealized loss of $ 0.3 million and an unrealized gain of $ 7.0 million in Other income, net related to the change in the fair value of the strategic investment in convertible promissory notes during the nine months ended September 30, 2025 and 2024, respectively.
The Company classified the strategic investment in convertible promissory notes as Level 3 due to the lack of relevant observable market data over fair value inputs. The fair value of the strategic investment in convertible promissory notes was estimated using a scenario-based probability weighted discounted cash flow model. Significant assumptions include the discount rate, and the timing and probability weighting of the various redemption scenarios that impact the settlement of the strategic investment in convertible promissory notes.
The contingent consideration is related to the Company’s acquisition of Frndly in May 2025 (refer to Note 4). As of the Acquisition Date, the Company measured its contingent consideration using Level 3 inputs. The fair value of the contingent consideration on the Acquisition Date was determined to be $ 65.8 million. The contingent consideration is subsequently remeasured to fair value at each reporting date until the contingency is resolved, with any changes in fair value included in General and administrative expenses in the condensed consolidated statements of operations. The Company recorded an expense of $ 0.9 million and $ 1.4 million in General and administrative expenses related to the change in the fair value of the contingent consideration during the three and nine months ended September 30, 2025, respectively.
The Company classified the contingent consideration as Level 3 due to the lack of relevant observable market data over fair value inputs. The fair value of the contingent consideration was estimated using a probability weighted discounted cash flow model. Significant assumptions include the probability of achieving certain performance metrics and milestones and the discount rate. The estimated fair value is based upon assumptions believed to be reasonable but which are uncertain and involve significant judgment by management. Favorable or unfavorable changes in expectations of achieving the performance metrics and milestones would result in corresponding increases or decreases in the fair value measurement, while increases or decreases in discount rates would have inverse impacts on the fair value measurement.
Assets and liabilities that are measured at fair value on a non-recurring basis
Non-financial assets such as goodwill, intangible assets, property and equipment, operating lease right-of-use assets, and content assets are evaluated for impairment and adjusted to fair value using Level 3 inputs, only when impairment is recognized.
The Company measured the intangible assets acquired from the Frndly acquisition at fair value using Level 3 inputs. The fair value of the customer relationships has been estimated using the multi-period-excess-earnings method. The key valuation assumptions include the Company’s estimates of customer attrition rates, expected future revenue, profit margins, and discount rate. The fair value of the tradename has been estimated using the relief-from-royalty method. The key valuation assumptions include the Company’s estimates of expected future revenue, royalty rate, and discount rate.
There were no impairment charges related to operating lease right-of-use assets and property and equipment during the three months ended September 30, 2025. During the three months ended September 30, 2024, the Company recorded impairment charges of $ 11.4  million related to operating lease right-of-use assets, and $ 6.5 million related to property and equipment, both associated with the leased office facilities that are part of its restructuring efforts.
During the nine months ended September 30, 2025, the Company recorded impairment charges of $ 2.9  million related to operating lease right-of-use assets associated with the leased office facilities that are part of its restructuring efforts, and during the nine months ended September 30, 2024, the Company recorded impairment charges of
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$ 22.6  million related to operating lease right-of-use assets, and $ 7.0  million related to property and equipment, both associated with the leased office facilities that are part of its restructuring efforts. See Note 17 to the condensed consolidated financial statements for additional details.

10. LEASES
The Company has entered into operating leases primarily for office real estate. The leases have remaining terms ranging from less than one year to eight years and may include options to extend or terminate the lease. The depreciable life of operating lease right-of-use assets is limited by the expected lease term.
The components of lease expense are as follows (in thousands):

  Three Months Ended Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Operating lease expense
$ 18,364   $ 16,046   $ 54,584   $ 52,426  
Variable lease expense 6,944   5,765   19,026   16,518  
Sublease income ( 6,200 ) ( 4,871 ) ( 17,302 ) ( 7,756 )
Total operating lease expense $ 19,108   $ 16,940   $ 56,308   $ 61,188  

Supplemental cash flow information related to leases is as follows (in thousands):

  Three Months Ended Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases $ 27,462   $ 24,192   $ 77,749   $ 67,914  
Right-of-use assets obtained in exchange for lease obligations:
Operating leases $ 53   $ 5,616   $ 7,927   $ 8,501  
Decrease in operating lease right-of-use assets due to impairment (See Note 17 for details) $ —   $ 11,386   $ 2,870   $ 22,618  

Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate):

  As of
  September 30, 2025 December 31, 2024
Operating lease right-of-use assets $ 272,877   $ 304,505

Operating lease liability, current (included in Accrued liabilities) 86,379   79,221
Operating lease liability, non-current 457,405   512,706
Total operating lease liability $ 543,784   $ 591,927

Weighted-average remaining term for operating leases (in years) 6.3 7.0
Weighted-average discount rate for operating leases 3.99   % 3.98   %

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Future lease payments under operating leases as of September 30, 2025 are as follows (in thousands):

Year Ending December 31, Operating Leases (2)

2025 (remaining 3 months) $ 25,828  
2026 106,592  
2027 103,539  
2028 100,469  
2029 96,850  
Thereafter 186,467  
Total future lease payments 619,745  
Less: imputed interest ( 72,702 )
Less: expected tenant improvement allowance ( 3,259 )
Total (1)
$ 543,784  

(1 ) Total lease liabilities include liabilities related to operating lease right-of-use assets which were included in the impairment charges as part of the Company’s restructuring efforts. See Note 17 for additional details.
(2) Non-cancelable sublease proceeds for the fiscal years ending December 31, 2025 (remaining three months), 2026, 2027, 2028, and 2029 of $ 4.5  million, $ 18.6  million, $ 18.8  million, $ 18.8  million, and $ 12.0  million, respectively, are not included in the table above.
As of September 30, 2025, the Company had approximately $ 1.0  million in commitments relating to operating leases that have not yet commenced.

11. DEBT
On September 16, 2024, the Company entered into a Credit Agreement, by and among the Company, as borrower, certain of the Company’s subsidiaries, as guarantors, the lenders and issuing banks party thereto, and with Citibank N.A., as administrative agent (the “Credit Agreement”), which provides for (i) a five-year revolving credit facility in an aggregate principal amount of up to $ 300.0 million, and (ii) an uncommitted increase option of up to an additional $ 300.0 million exercisable upon the satisfaction of certain customary conditions. The Credit Agreement provides for a $ 100.0 million sub-facility for the issuance of letters of credit, and certain existing letters of credit were deemed outstanding under this facility. The Credit Agreement will mature on September 16, 2029. Proceeds from the Credit Agreement may be used for general corporate purposes, including to finance working capital requirements.
The Company’s obligations under the Credit Agreement are secured by substantially all the assets of the Company and its subsidiaries that are guarantors under the Credit Agreement. The Company may prepay, and in certain circumstances would be required to prepay, loans under the Credit Agreement without payment of a premium. The Credit Agreement also contains customary representations and warranties, customary affirmative and negative covenants, financial covenants requiring the maintenance of a minimum interest coverage ratio and a maximum total net leverage ratio, as well as customary events of default, the occurrence of which could result in amounts borrowed under the Credit Agreement becoming due and payable and remaining commitments terminated prior to its scheduled September 16, 2029 termination date.
Debt issuance costs incurred in connection with the Company’s Credit Agreement, which are recorded in Prepaid expenses and other current assets and Other non-current assets, are amortized over the five-year term and recognized as a component of interest expense in the condensed consolidated statements of operations.
The Company had outstanding letters of credit secured by the Credit Agreement of $ 39.5  million as of September 30, 2025. As of September 30, 2025, the Company had not borrowed against the Credit Agreement, and the Company was in compliance with all of the covenants of the Credit Agreement.

12. STOCKHOLDERS’ EQUITY
Preferred Stock
The Company has 10 million shares of undesignated preferred stock authorized but not issued with rights and preferences determined by the Company’s Board of Directors (the “Board”) at the time of issuance of such shares. As of September 30, 2025 and December 31, 2024, there were no shares of preferred stock issued and outstanding.
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Common Stock
The Company has two classes of authorized common stock, Class A common stock and Class B common stock. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders and holders of Class B common stock are entitled to ten votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A and Class B common stock are identical. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and are generally automatically converted into shares of the Company’s Class A common stock upon sale or transfer. Shares issued in connection with exercises of stock options or vesting of restricted stock units are generally automatically converted into shares of the Company’s Class A common stock.
Stock Repurchase Program

In August 2025, the Company began repurchasing shares of the Company’s common stock under a stock repurchase program approved by the Board pursuant to which the Company is authorized to repurchase up to $ 400  million of the Company’s Class A common stock through December 31, 2026. The program does not obligate the Company to acquire any amount of Class A common stock, and the timing and total amount of share repurchases will depend on general market conditions, the trading price of the Company’s Class A common stock, corporate and regulatory requirements, the availability of funds, other investment opportunities, and other considerations. Repurchases may be executed through open market transactions at prevailing market prices, including pursuant to trading plans that comply with the requirements of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or through other means.

During the three months ended September 30, 2025, the Company paid an aggregate of $ 50.0 million to repurchase approximately 0.6 million shares of its Class A common stock, which were immediately retired. As a result, $ 50.0 million was recorded to Accumulated deficit to reflect the difference between the market price of the Class A common stock repurchased and its par value.

The following table summarizes the share repurchase activity under the Company's stock repurchase program (in thousands, except share and per share data):

  Three Months Ended
  September 30, 2025
Total number of shares repurchased 567,582
Average price paid per share $ 88.10  
Amount repurchased $ 50,000  

As of September 30, 2025, $ 350.0 million remained available and authorized for repurchases under the stock repurchase program.
Common Stock Reserved for Issuance
As of September 30, 2025, the Company’s common stock reserved for issuance in the future is as follows (in thousands):

As of
  September 30, 2025
Common stock awards granted under equity incentive plans 13,133  
Common stock awards available for issuance under the 2017 Employee Stock Purchase Plan *
5,089  
Common stock awards available for issuance under the 2017 Amended and Restated Equity Incentive Plan 38,402  
Total reserved shares of common stock 56,624  

* The Company has not issued any common stock pursuant to the 2017 Employee Stock Purchase Plan.
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Equity Incentive Plans
The Company currently grants equity awards under the Amended and Restated 2017 Equity Incentive Plan (the “2017 Plan”). The 2017 Plan became effective September 2017 in connection with the Company’s initial public offering (“IPO”). The 2017 Plan provides for the grant of incentive stock options to the Company’s employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of equity compensation to the Company’s employees, directors and consultants. The outstanding equity relates to the 2017 Plan and the 2008 Equity Incentive Plan (“2008 Plan”), a pre-IPO plan. No additional equity grants have been made pursuant to the 2008 Plan subsequent to the IPO.
The equity awards granted under the 2017 Plan vest subject to continuous service. Stock options granted under the 2017 Plan generally are granted at a price per share equivalent to the fair market value on the date of grant. Recipients of incentive stock option grants who possess more than 10 % of the combined voting power of the Company are subject to certain limitations, and incentive stock options granted to such recipients are at a price no less than 110 % of the fair market value at the date of grant.
Restricted Stock Units
Restricted stock unit activity for the nine months ended September 30, 2025 is as follows (in thousands, except per share data):

  Number of
Shares
  Weighted-Average
Grant Date Fair
Value per Share

Balance as of December 31, 2024
8,657   $ 74.80  
Awarded 3,138   88.21  
Released ( 3,225 ) 87.27  
Forfeited ( 894 ) 73.17  
Balance as of September 30, 2025
7,676   $ 75.23  

As of September 30, 2025, the Company had $ 495.8 million of unrecognized stock-based compensation expense related to unvested restricted stock units that is expected to be recognized over a weighted-average period of approximately 1.9 years.
Stock Options
Stock option activity for the nine months ended September 30, 2025 is as follows (in thousands, except per share data and years):

  Number of
Shares
Weighted-
Average
Exercise
Price
Weighted-
Average
Remaining
Contractual
Life (Years)
Aggregate
Intrinsic
Value

Balance as of December 31, 2024
5,759   $ 75.24   6.6
Granted 325   88.47   — 
Exercised ( 570 ) 32.12   — 
Forfeited and expired ( 57 ) 75.18   — 
Balance as of September 30, 2025
5,457   $ 80.40   6.3 $ 183,817  
 
Options exercisable as of September 30, 2025
4,182   $ 84.79   5.6 $ 140,309  

As of September 30, 2025, the Company had $ 45.1 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of approximately 1.7 years.
Stock-based Compensation
The Company measures the cost of employee services received in exchange for an equity award based on the grant date fair value of the award. Stock options granted to employees generally vest over one to four years and have a term of ten years . Restricted stock units generally vest over one to four years .
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The following table presents the total stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024 (in thousands):

  Three Months Ended Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Cost of revenue, platform $ 247   $ 366   $ 972   $ 1,062  
Cost of revenue, devices 75   163   183   1,201  
Research and development 34,496   38,502   103,315   109,457  
Sales and marketing 31,921   36,401   97,193   100,353  
General and administrative 21,292   24,664   66,502   71,051  
Total stock-based compensation $ 88,031   $ 100,096   $ 268,165   $ 283,124  

13. COMMITMENTS AND CONTINGENCIES
Purchase Commitments
The Company has purchase commitments with various parties to purchase products and services such as licensed intellectual property and content, manufacturing supplier agreements, and data center capacity and other goods and services.
The following table presents details of the aggregate future purchase commitments as of September 30, 2025 (in thousands):

Years Ended December 31,
Total Remaining 2025 2026 2027 2028 2029 Thereafter
Content $ 197,930   $ 56,653   $ 89,303   $ 30,099   $ 16,078   $ 3,636   $ 2,161  
Manufacturing 180,616   180,616   —   —   —   —   —  
Other obligations 124,278   24,629   81,530   10,680   3,644   3,720   75  
Total commitments $ 502,824   $ 261,898   $ 170,833   $ 40,779   $ 19,722   $ 7,356   $ 2,236  

Contingencies
The Company accounts for loss contingencies, including liabilities for intellectual property licensing and other claims, when it believes such losses are probable and reasonably estimable. These contingencies are reviewed at least quarterly and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events. The resolution of these contingencies and of other legal proceedings can be, however, inherently unpredictable and subject to significant uncertainties.
The Company is, and may become, subject to various lawsuits, stockholder derivative actions, class action lawsuits, individual or mass arbitration proceedings, and other types of legal proceedings, as well as other disputes, claims, and regulatory or governmental inquiries and investigations in the ordinary course of business, relating to commercial, contract, consumer protection, privacy, data protection, intellectual property, tax, employment, corporate governance, and other matters. Although the results of these legal proceedings, disputes, claims, and inquiries and investigations cannot be predicted with certainty, the Company does not believe that the final outcome of any matters that it is currently involved in is reasonably likely to have a material adverse effect on its business, financial condition, or results of operations. Regardless of the outcome, such legal proceedings, disputes, claims, and inquiries and investigations can have an adverse impact on the Company because of legal fees, other litigation costs, and settlement costs, diversion of management resources, reputational harm, and other factors. During the three and nine months ended September 30, 2025 and 2024, the Company did not have any loss contingencies that were material.
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Indemnification
In the ordinary course of business, the Company has entered into contractual arrangements which provide indemnification provisions of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement claims made by third parties. The Company’s obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers.
It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements.

14. INCOME TAXES
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. Key changes include the immediate expensing of domestic research and development costs and the reinstatement of 100% bonus depreciation. The Company expects domestic cash tax savings and a decrease in its effective tax rate in fiscal year 2025 due to the research and development provisions. The Company has recognized the effects of OBBBA starting in the three months ended September 30, 2025.
Income tax expense was $ 13.2 million and $ 4.1 million for the three months ended September 30, 2025 and 2024, respectively. Income tax benefit was $ 5.7 million and $ 0.2 million for the nine months ended September 30, 2025 and 2024, respectively.
The increase in income tax expense for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024 is primarily due to higher pre-tax book income, partially offset by the impact from the enactment of the OBBBA.
The increase in income tax benefit for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024 is primarily due to the impact from the enactment of OBBBA.
A valuation allowance must be established for deferred tax assets when it is more likely than not that they will not be realized. As of September 30, 2025, the Company analyzed all available objective evidence, both positive and negative, and believes it is more likely than not that some deferred tax assets will not be realizable. Accordingly, the Company continues to provide a valuation allowance against its U.S. deferred tax assets.

15. NET INCOME (LOSS) PER SHARE
The Company’s basic net income (loss) per share is calculated by dividing the net income (loss) by the weighted-average number of shares of common stock outstanding for the period. The Company uses the two-class method to calculate net income (loss) per share. Except with respect to certain voting, conversion, and transfer rights and as otherwise expressly provided in the Company’s amended and restated certificate of incorporation or required by applicable law, shares of the Company’s Class A common stock and Class B common stock have the same rights and privileges and rank equally, share ratably, and are identical in all respects as to all matters. Accordingly, basic and diluted net income (loss) per share are the same for both classes.
For purposes of the calculation of diluted net income (loss) per share, options to purchase common stock and restricted stock units are considered common stock equivalents. Dilutive shares of common stock are determined by applying the treasury stock method. The dilutive shares are excluded from the calculation of diluted net loss per share in the period of net loss, as their effect is antidilutive.
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The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Numerator:
Net income (loss) $ 24,812   $ ( 9,030 ) $ 7,884   $ ( 93,838 )
Denominator:

Weighted-average common shares outstanding — basic 147,466 144,862 146,855 144,319
Dilutive effect of common stock equivalents 4,114   —   3,594   —  
Weighted-average common shares outstanding — diluted 151,580 144,862 150,449 144,319

Net income (loss) per share — basic $ 0.17   $ ( 0.06 ) $ 0.05   $ ( 0.65 )
Net income (loss) per share — diluted $ 0.16   $ ( 0.06 ) $ 0.05   $ ( 0.65 )

Common stock equivalents (comprised of stock options and restricted stock units) excluded from the calculation of diluted net income (loss) per share because of their anti-dilutive effect were 1.6 million shares and 2.9 million shares for the three and nine months ended September 30, 2025, respectively, and 15.9 million shares for each of the three and nine months ended September 30, 2024 .

16. SEGMENT INFORMATION
An operating segment is defined as a component of an entity for which discrete financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”) for purposes of allocating resources and evaluating financial performance. The CODM evaluates performance and makes decisions about allocating resources to its operating segments based on financial information presented on a consolidated basis and on gross profit for each operating segment. For both the Platform and Devices reportable segments, Cost of revenue is the significant segment expense that is regularly provided to the CODM.
While not considered significant segment expenses, the Company has separately disclosed content amortization (refer to Note 7) and stock-based compensation expense (refer to Note 12) charged to Cost of revenue, platform. The Company disclosed charges related to the inventory provision and inventory losses on purchase commitments (refer to Note 2) and stock-based compensation expense (refer to Note 12) included within Cost of revenue, devices.
The Company reports its financial results consistent with the manner in which financial information is viewed by management for decision-making purposes. The Company does not manage operating expenses such as research and development, sales and marketing, and general and administrative expenses at the segment level. The Company does not allocate property and equipment or any other assets or capital expenditures to reportable segments.
Descriptions of the Company’s two reportable segments are as follows:
Platform
Platform revenue is generated from the sale of digital advertising (including direct and programmatic video advertising, ads integrated into the Company’s user interface, and related services), as well as streaming services distribution (including subscription and transaction revenue shares, the sale of Premium Subscriptions, the sale of owned and operated subscription services, and the sale of branded app buttons on remote controls).
Devices
Devices revenue is generated from the sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories.
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Customers accounting for 10% or more of segment revenue, net, were as follows:

  Three Months Ended Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Platform segment revenue:

Customer J 13   % 13   % 13   % 11   %

Devices segment revenue:
Customer A 10   % 23   % 15   % 22   %
Customer B 17   % 15   % 25   % 20   %
Customer C 17   % 25   % 23   % 27   %
Customer K 29   % 16   % 18   % *

* Less than 10%
Revenue by geography is determined based on the location where the Company’s products and services are delivered. Revenue in international markets was less than 10% in each of the periods presented.
Long-lived assets, net
The following table presents long-lived assets, net, which consist primarily of property and equipment and operating lease right-of-use assets, by geographic area (in thousands):

As of
September 30, 2025 December 31, 2024
United States $ 354,940 $ 401,464
United Kingdom 79,578 92,110
Other countries 21,168 24,621
Total $ 455,686 $ 518,195

17. RESTRUCTURING CHARGES
Starting in the fourth quarter of fiscal 2022, the Company implemented measures to reduce its operating expense growth rate due to economic conditions, including consolidating its office space utilization, performing a strategic review of its content portfolio, reducing outside services expenses, and slowing its year-over-year headcount expense growth rate through a workforce reduction and limiting new hires, among other measures.
During the nine months ended September 30, 2025, the Company recorded restructuring charges associated with decisions to sub-lease and cease the use of certain office facilities, and there were no restructuring charges recorded during the three months ended September 30, 2025. During the three and nine months ended September 30, 2024, the Company recorded restructuring charges associated with employee termination expenses consisting primarily of severance payments, employee benefits contributions, payroll taxes and related costs, and impairment charges related to decisions to sub-lease and cease the use of certain office facilities and related property and equipment.
Restructuring charges are recorded as follows (in thousands):

Three Months Ended September 30, 2024
Employee Terminations Facilities Exit Costs Asset Impairment Charges Total
Cost of revenue, platform $ —   $ —   $ —   $ —  
Cost of revenue, devices —   —   —   —  
Research and development —   52   ( 1,418 ) ( 1,366 )
Sales and marketing —   717   16,271   16,988  
General and administrative —   140   2,759   2,899  
Total restructuring charges $ —   $ 909   $ 17,612   $ 18,521  

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Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
Facilities Exit Costs Asset Impairment Charges Total Employee Terminations Facilities Exit Costs Asset Impairment Charges Total
Cost of revenue, platform $ —   $ —   $ —   $ ( 3 ) $ —   $ —   $ ( 3 )
Cost of revenue, devices —   —   —   1   —   5   6  
Research and development 194   2,133   2,327   368   98   ( 603 ) ( 137 )
Sales and marketing —   175   175   697   719   24,641   26,057  
General and administrative —   562   562   ( 116 ) 117   5,075   5,076  
Total restructuring charges $ 194   $ 2,870   $ 3,064   $ 947   $ 934   $ 29,118   $ 30,999  

The asset impairment charges for the nine months ended September 30, 2025 are primarily comprised of $ 2.9 million of operating lease right-of-use assets impairment. The asset impairment charges for the three months ended September 30, 2024 are primarily comprised of $ 11.4 million of operating lease right-of-use assets impairment and $ 6.5 million of property and equipment impairment. The asset impairment charges for the nine months ended September 30, 2024 include $ 22.6 million of operating lease right-of-use assets impairment and $ 7.0 million of property and equipment impairment, partially offset by $ 0.5 million of adjustments to other long-term liabilities and assets.
A reconciliation of the beginning and ending balance of employee termination restructuring charges and facilities exit costs, which are included in Accrued liabilities in the condensed consolidated balance sheets, is as follows (in thousands):

Three Months Ended September 30, 2025 Three Months Ended September 30, 2024
Employee Terminations Facilities Exit Costs Total Employee Terminations Facilities Exit Costs Total
Beginning balance $ —   $ 1,226   $ 1,226   $ 181   $ 839   $ 1,020  
Restructuring charges incurred —   —   —   —   909   909  
Payments made —   —   —   ( 181 ) ( 326 ) ( 507 )
Ending balance $ —   $ 1,226   $ 1,226   $ —   $ 1,422   $ 1,422  

Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024
Employee Terminations Facilities Exit Costs Total Employee Terminations Facilities Exit Costs Total
Beginning balance $ —   $ 1,381   $ 1,381   $ 12,661   $ 1,198   $ 13,859  
Restructuring charges incurred —   194   194   947   934   1,881  
Payments made —   ( 349 ) ( 349 ) ( 13,608 ) ( 710 ) ( 14,318 )
Ending balance $ —   $ 1,226   $ 1,226   $ —   $ 1,422   $ 1,422  

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and with our audited consolidated financial statements included in our Annual Report for the year ended December 31, 2024, filed on February 14, 2025 with the SEC.

Overview
Our two reportable segments are the platform segment and the devices segment. Platform revenue is generated from the sale of digital advertising (including direct and programmatic video advertising, ads integrated into our user interface (“UI”), and related services) and streaming services distribution (including subscription and transaction revenue shares, the sale of Premium Subscriptions, the sale of owned and operated subscription services, and the sale of branded app buttons on remote controls).
Devices revenue is generated from the sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories. We expect to continue to manage the average selling prices of Roku streaming devices in an effort to sell more devices, which we believe will increase our Streaming Households. We expect that this trade off from devices gross profit or loss to grow Streaming Households should result in increased platform revenue and platform gross profit over time.
Business Conditions and Macroeconomic Factors
Our business is subject to risks related to the evolving macroeconomic environment, including the effects of increased volatility in financial markets, higher inflation and interest rates, potential economic slowdown or recession, geopolitical developments, changes in economic or government policies, including the unknown impact of tariffs, changing global regulations, and the overall uncertainty surrounding international trade relations. While we intend to remain vigilant in monitoring the impacts of these circumstances on our business and adapt accordingly, the effects of these macroeconomic factors on our business, results of operations, and financial condition remain largely uncertain. See Item 1A, Risk Factors, and the Note Regarding Forward Looking Statements elsewhere in this Quarterly Report for additional details.

Key Performance Metrics and Non-GAAP Measures
Since our IPO in 2017, the streaming TV industry has evolved meaningfully, with Americans now spending significantly more TV time streaming than watching cable. Our business has also grown and evolved, and we are now primarily focused on growing Platform revenue and profitability. As a result, and as previously disclosed, starting in the first quarter of 2025, we have updated our Key Performance Metrics (“KPMs”) to better align with these priorities.
The key performance metrics we use to evaluate our business, measure our performance, develop financial forecasts and make strategic decisions are Streaming Hours, Platform Revenue, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), and Free Cash Flow.
Streaming Hours
We believe the number of Streaming Hours on our platform is an effective measure of user engagement and that the growth in the number of hours of content streamed across our platform reflects our success in addressing the growing user demand for TV streaming. We define Streaming Hours as the aggregate amount of time Roku streaming devices stream content on our platform in a given period. Hours streamed from The Roku Channel on non-Roku platforms are not included in this metric. Additionally, smart home products do not contribute to our Streaming Hours.
Additionally, we believe that over time, increasing user engagement on our streaming platform increases our platform monetization because we earn platform revenue from various forms of user engagement, including advertising, as well as revenue shares from subscriptions and transactional video on-demand. However, our revenue from content partners is not tied to the hours streamed on their streaming apps, and the number of Streaming Hours does not correlate to revenue earned from such content partners or ARPU on a period-by-period basis. Moreover, Streaming Hours on our platform are measured whenever a Roku streaming device is streaming content, whether a viewer is actively watching or not. For example, if a Roku player is connected to a TV, and the viewer turns off the TV, steps away, or falls asleep and does not stop or pause the player, then the particular streaming app may continue to play content for a period of time determined by the streaming app. We believe that this also occurs across a wide variety of non-Roku streaming devices and other set-top boxes.
Since 2020, all of our Roku streaming devices include a Roku TV OS feature that is designed to identify when content has been continuously streaming on an app for an extended period of time without user interaction. This feature, which we refer to as “Are you still watching,” periodically prompts the user to confirm that they are still watching the selected app and closes the app if the user does not respond affirmatively. We believe that the implementation of this feature across the Roku platform benefits us, our customers, content partners, and advertisers. Some of our leading content partners, including Netflix, also have implemented similar features within their apps. This Roku TV OS feature supplements these app features. This feature has not had and is not expected to have a material impact on our financial performance.
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We streamed 36.5 billion and 32.0 billion hours during the three months ended September 30, 2025 and 2024, respectively, reflecting an increase of 14%.
Platform Revenue
We use Platform revenue as a primary metric to measure the performance of our business because it represents our ability to successfully monetize our platform. Platform revenue growth is one of our strategic priorities. Platform revenue was $1,064.6 million and $908.2 million for the three months ended September 30, 2025 and 2024, respectively.
Adjusted EBITDA (Non-GAAP Measure)
We use Adjusted EBITDA as a primary metric to measure the performance of our business because it represents our ability to successfully manage profitability. Our goal is to grow Adjusted EBITDA over time, driving continued growth in stockholder value.
Adjusted EBITDA is a non-GAAP financial measure. The Adjusted EBITDA reconciliation excludes total other income, net, stock-based compensation expense, depreciation and amortization, restructuring charges, and income tax (benefit) from the net income (loss) of the period. We believe Adjusted EBITDA is useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, this non-GAAP financial measure has limitations, and should not be considered in isolation or as a substitute for our GAAP financial information, such as GAAP net income (loss). In addition, Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.
The following table presents a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure for each of the periods indicated (in thousands):

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Net income (loss) $ 24,812  $ (9,030) $ 7,884  $ (93,838)
Total other income, net (28,564) (30,880) (73,786) (84,955)
Stock-based compensation 88,031  100,096  268,165  283,124 
Depreciation and amortization 19,441  15,349  51,514  47,629 
Restructuring charges (1)
—  18,521  3,064  30,999 
Income tax expense (benefit) 13,218  4,147  (5,695) (249)
Adjusted EBITDA $ 116,938  $ 98,203  $ 251,146  $ 182,710 
(1) The restructuring charges for the nine months ended September 30, 2025 primarily include asset impairment charges of $2.9 million. Restructuring charges for the three and nine months ended September 30, 2024 primarily include asset impairment charges of $17.6 million and $29.1 million, respectively.
Free Cash Flow (Non-GAAP Measure)
We use Free Cash Flow as a primary metric to measure the performance of our business because we believe maximizing Free Cash Flow helps indicate the financial strength of our business, as well as provide an indication of cash generated or (used) by the business. Our goal is to continuously increase Free Cash Flow over time. We define Free Cash Flow as our trailing 12-month (“TTM”) cash flows from operating activities excluding purchases of property and equipment and the effects of exchange rates on cash.
Our Free Cash Flow was $443.0 million and $157.3 million for the TTM periods ended September 30, 2025 and 2024, respectively.
Free Cash Flow is a non-GAAP financial measure. The Free Cash Flow reconciliation excludes purchases of property and equipment and effects of exchange rates on cash from the cash flows from operating activities, in each case where applicable. We believe Free Cash Flow is useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, this non-GAAP financial measure has limitations, and should not be considered in isolation or as a substitute for our GAAP financial information, such as GAAP cash flows from operating activities. For additional information about cash flows from operating activities, see “Liquidity and Capital Resources” below. In addition, Free Cash Flow may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.
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The following table presents a reconciliation of Free Cash Flow to the most directly comparable GAAP financial measure for each of the periods indicated (in thousands):

Trailing Twelve Months Ended
September 30, 2025 September 30, 2024
Net cash provided by operating activities $ 455,360  $ 155,080 
Less: Purchases of property and equipment (6,647) (6,123)
Add/(Less): Effect of exchange rate changes on cash, cash equivalents and restricted cash (5,706) 8,392 
Free cash flow (TTM) $ 443,007  $ 157,349 

Components of Results of Operations
Revenue
Platform Revenue
We generate platform revenue from the sale of digital advertising (including direct and programmatic video advertising, ads integrated into our UI, and related services), as well as streaming services distribution (including subscription and transaction revenue shares, the sale of Premium Subscriptions, the sale of owned and operated subscription services, and the sale of branded app buttons on remote controls). Our ad inventory primarily includes video ad inventory from AVOD content in The Roku Channel, native display ads throughout the Roku Experience, as well as ad inventory we obtain through our streaming services distribution agreements with our content partners. To supplement supply, we purchase advertising inventory from our content partners, on an as needed basis. To date, we have generated most of our platform revenue in the United States.
Devices Revenue
We generate devices revenue from the sale of streaming players, Roku-branded TVs, smart home products and services, audio products, and related accessories. We generate most of our devices revenue in the United States. In our international markets, we primarily sell our devices through wholesale distributors which, in turn, sell to retailers.
Cost of Revenue
Cost of Revenue, Platform
Cost of revenue, platform primarily consists of costs associated with acquiring advertising inventory, content amortization costs for both licensed and produced content, costs for licensed premium subscriptions, and revenue share payments on licensed content. Cost of revenue, platform also includes other costs such as payment processing fees, allocated expenses associated with the delivery of our services that primarily include costs of third-party cloud services and salaries, benefits, and stock-based compensation for our platform operations personnel, and amortization of acquired developed technology.
Cost of Revenue, Devices
Cost of revenue, devices is comprised mostly of manufacturing costs payable to third-party manufacturers for devices we sell which include streaming players, Roku-branded TVs, audio products and smart home products. Cost of revenue, devices also includes technology licenses or royalty fees on devices we sell, inbound and outbound freight, duty and logistics costs, third-party packaging, inventory provisions, and allocated overhead costs related to facilities, third-party cloud services, and salaries, benefits, and stock-based compensation for operations personnel.
Operating and Other Expenses
Research and Development
Research and development expenses consist primarily of salaries, benefits, and stock-based compensation for our development teams as well as outsourced development expenses. In addition, research and development expenses include allocated facilities and overhead expenses.
Sales and Marketing
Sales and marketing expenses consist primarily of salaries, benefits, commissions, and stock-based compensation for our employees engaged in sales and sales support, marketing, communications, data science and analytics, business development, product management, and partner support functions. Sales and marketing expenses also include marketing, retail and merchandising expenses, consulting and outside services, and allocated facilities and overhead expenses.
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General and Administrative
General and administrative expenses consist primarily of salaries, benefits, and stock-based compensation for our finance, legal, information technology, human resources, and other administrative personnel. General and administrative expenses also include outside legal, accounting, and other professional service fees as well as allocated facilities and overhead expenses.
Other Income, Net
Other income, net primarily consists of interest income on cash and cash equivalents, short-term investments, foreign currency remeasurement, transaction gains and losses, and net change in the fair value of our strategic investments.
Income Tax Expense (Benefit)
Our income tax expense (benefit) consists primarily of income tax expense in certain foreign jurisdictions where we conduct business and income tax expense (benefit) in the United States. We have a full valuation allowance against net deferred tax assets in the United States. We expect to maintain this valuation allowance for the foreseeable future.

Results of Operations
The following table sets forth selected condensed consolidated statements of operations data as a percentage of total revenue for each of the periods indicated.

  Three Months Ended Nine Months Ended
  September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024
Net revenue:
Platform 88  % 85  % 87  % 85  %
Devices 12  % 15  % 13  % 15  %
Total net revenue 100  % 100  % 100  % 100  %
Cost of revenue:
Platform 43  % 39  % 42  % 40  %
Devices 14  % 16  % 14  % 16  %
Total cost of revenue 57  % 55  % 56  % 56  %
Gross profit (loss):
Platform 45  % 46  % 45  % 45  %
Devices (2) % (1) % (1) % (1) %
Total gross profit 43  % 45  % 44  % 44  %
Operating expenses:
Research and development 15  % 17  % 16  % 18  %
Sales and marketing 20  % 22  % 21  % 23  %
General and administrative 8  % 9  % 9  % 9  %
Total operating expenses 43  % 48  % 46  % 50  %
Income (loss) from operations —  % (3) % (2) % (6) %
Other income, net:
Interest expense —  % —  % —  % —  %
Other income, net 2  % 3  % 2  % 3  %
Total other income, net 2  % 3  % 2  % 3  %
Income (loss) before income taxes 2  % —  % —  % (3) %
Income tax expense (benefit) 1  % —  % —  % —  %
Net income (loss) 1  % —  % —  % (3) %

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Comparison of the Three and Nine Months Ended September 30, 2025 and September 30, 2024
Net Revenue

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 Change $ Change % September 30, 2025 September 30, 2024 Change $ Change %
(in thousands, except percentages)
Platform $ 1,064,644  $ 908,175  $ 156,469  17  % $ 2,920,932  $ 2,487,443  $ 433,489  17  %
Devices 145,994  154,028  (8,034) (5) % 421,416  424,408  (2,992) (1) %
Total net revenue $ 1,210,638  $ 1,062,203  $ 148,435  14  % $ 3,342,348  $ 2,911,851  $ 430,497  15  %

Platform
Platform revenue increased by $156.5 million, or 17%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily due to higher revenue from streaming services distribution, specifically higher Premium Subscriptions revenue and higher subscription revenue from both third-party and our owned and operated subscription services, and higher advertising revenue, which grew despite continued weakness in the media and entertainment vertical.
Platform revenue increased by $433.5 million, or 17%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was primarily due to higher revenue from streaming services distribution, specifically higher Premium Subscription revenue and higher subscription revenue from both third-party and our owned and operated subscription services. In addition, advertising revenue increased despite continued weakness in the media and entertainment vertical.
Devices
Devices revenue decreased by $8.0 million, or 5%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The decrease was primarily due to lower revenue from streaming players. During the three months ended September 30, 2025, the average selling price of all devices shipped decreased by 6% and the volume of all devices shipped increased by 1% as compared to the three months ended September 30, 2024. The decrease in average selling price is primarily due to the mix of products sold.
Devices revenue decreased by $3.0 million, or 1%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The decrease was primarily due to lower revenue from streaming players. During the nine months ended September 30, 2025, the average selling price of all devices shipped increased by less than 1% and the volume of all devices shipped increased by 1% as compared to the nine months ended September 30, 2024.
Cost of Revenue and Gross Profit (Loss)

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 Change $ Change % September 30, 2025 September 30, 2024 Change $ Change %
(in thousands, except percentages)
Cost of revenue:
Platform $ 516,869  $ 416,396  $ 100,473  24  % $ 1,411,170  $ 1,161,416  $ 249,754  22  %
Devices 168,870  165,732  3,138  2  % 463,576  457,369  6,207  1  %
Total cost of revenue $ 685,739  $ 582,128  $ 103,611  18  % $ 1,874,746  $ 1,618,785  $ 255,961  16  %
Gross profit (loss):
Platform $ 547,775  $ 491,779  $ 55,996  11  % $ 1,509,762  $ 1,326,027  $ 183,735  14  %
Devices (22,876) (11,704) (11,172) 95  % (42,160) (32,961) (9,199) 28  %
Total gross profit $ 524,899  $ 480,075  $ 44,824  9  % $ 1,467,602  $ 1,293,066  $ 174,536  13  %

Platform
The Cost of revenue, platform increased by $100.5 million, or 24%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily driven by higher costs of Premium Subscriptions, acquiring content, and acquiring advertising inventory.
The Cost of revenue, platform increased by $249.8 million, or 22%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was primarily driven by higher costs of Premium Subscriptions, acquiring content, and acquiring advertising inventory.
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Gross profit for the platform segment increased by $56.0 million, or 11%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily driven by the overall growth in our platform revenue.
Gross profit for the platform segment increased by $183.7 million, or 14%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily driven by the overall growth in our platform revenue.
Devices
The Cost of revenue, devices increased by $3.1 million, or 2%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily driven by higher inventory provisions of $7.0 million, partially offset by lower manufacturing costs of $4.0 million related to lower costs to manufacture Roku-branded TVs.
The Cost of revenue, devices increased by $6.2 million, or 1%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was primarily driven by higher freight costs of $8.7 million and higher manufacturing costs of $5.2 million mainly due to a higher proportion of sales from Roku-branded TVs. The increase was partially offset by lower inventory provisions of $4.8 million and lower royalty costs of $3.9 million.
Gross loss for the devices segment increased by $11.2 million, or 95%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily driven by higher inventory provisions and lower sales of streaming players. We manage the average selling prices of our products to grow our Streaming Households, which we expect should result in increased platform revenue and platform gross profit over time.
Gross loss for the devices segment increased by $9.2 million, or 28%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily driven by higher freight costs and higher manufacturing costs. We manage the average selling prices of our products to grow our Streaming Households, which we expect should result in increased platform revenue and platform gross profit over time.
Operating Expenses

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 Change $ Change % September 30, 2025 September 30, 2024 Change $ Change %
(in thousands, except percentages)
Research and development $ 182,235  $ 178,798  $ 3,437  2  % $ 544,831  $ 534,738  $ 10,093  2  %
Sales and marketing 242,077  237,047  5,030  2  % 709,026  660,827  48,199  7  %
General and administrative 91,121  99,993  (8,872) (9) % 285,342  276,543  8,799  3  %
Total operating expenses $ 515,433  $ 515,838  $ (405) —  % $ 1,539,199  $ 1,472,108  $ 67,091  5  %

Research and development
Research and development expenses increased by $3.4 million, or 2%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily driven by higher consulting expenses of $3.8 million.
Research and development expenses increased by $10.1 million, or 2%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was primarily driven by higher consulting expenses of $11.6 million.
Sales and marketing
Sales and marketing expenses increased by $5.0 million, or 2%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase was primarily driven by higher marketing, retail, and merchandising expenses of $14.5 million, higher amortization of $5.4 million, and higher consulting expenses of $2.3 million. The increases were partially offset by lower restructuring charges of $17.0 million.
Sales and marketing expenses increased by $48.2 million, or 7%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was primarily driven by higher marketing, retail, and merchandising expenses of $48.9 million, higher personnel-related expenses of $11.1 million, higher amortization of $7.2 million, and higher consulting expenses of $6.5 million. The increases were partially offset by lower restructuring charges of $25.9 million.
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General and administrative
General and administrative expenses decreased by $8.9 million, or 9%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The decrease was primarily driven by lower personnel-related expenses of $4.6 million, lower restructuring charges of $2.9 million, and lower legal and consulting expenses of $1.0 million.
General and administrative expenses increased by $8.8 million, or 3%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The increase was primarily driven by higher legal and consulting expenses of $15.7 million, partially offset by lower restructuring charges of $4.5 million.
Other Income, Net

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 Change $ Change % September 30, 2025 September 30, 2024 Change $ Change %
(in thousands, except percentages)
Interest expense $ (455) $ —  $ (455) nm $ (1,348) $ —  $ (1,348) nm
Other income, net 29,019  30,880  (1,861) (6) % 75,134  84,955  (9,821) (12) %
Total other income, net $ 28,564  $ 30,880  $ (2,316) (8) % $ 73,786  $ 84,955  $ (11,169) (13) %

Total other income, net decreased by $2.3 million, or 8%, during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The decrease was driven by lower other income of $1.9 million and higher interest expense of $0.5 million.
Total other income, net decreased by $11.2 million, or 13%, during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The decrease was primarily driven by a fair value remeasurement loss of $0.3 million on our strategic investment in convertible promissory notes, compared to a gain of $7.0 million during the nine months ended September 30, 2024, and higher interest expense of $1.3 million.
Income Tax Expense (Benefit)

Three Months Ended Nine Months Ended
September 30, 2025 September 30, 2024 Change $ Change % September 30, 2025 September 30, 2024 Change $ Change %
(in thousands, except percentages)
Income tax expense (benefit) $ 13,218  $ 4,147  $ 9,071  219  % $ (5,695) $ (249) $ (5,446) nm

Income tax expense increased by $9.1 million during the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to higher pre-tax book income, partially offset by the impact from the enactment of the One Big Beautiful Bill Act.
Income tax benefit increased by $5.4 million during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to the impact from the enactment of the One Big Beautiful Bill Act.

Liquidity and Capital Resources
As of September 30, 2025, we had cash and cash equivalents of $1,575.5 million, and short-term investments of $726.9 million. Approximately 8% of our cash and cash equivalents was held outside the United States in accounts held by our foreign subsidiaries, which are used to fund foreign operations, and all short-term investments were held inside the United States.
Our primary sources of cash are receipts from platform and devices revenue. The primary uses of cash are costs of revenue including costs to acquire advertising inventory, costs to license and produce content, third-party manufacturing costs for our products, as well as operating expenses such as personnel-related expenses, consulting and professional service expenses, facility expenses, and marketing expenses. Other uses of cash include purchases of property and equipment and mergers and acquisitions.
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We have pursued merger and acquisition activities, such as the acquisition of Frndly, and we may pursue additional merger and acquisition activities in the future, including the acquisition of rights to programming and content assets. Though we do not expect to incur expenses for facilities and building related costs at the same level as in the last few fiscal years, we will continue to incur expenses on the maintenance of our facilities and purchases of computer systems, and other property and equipment, in order to support future growth in our business. These activities may materially impact our liquidity and capital resources.
We believe our existing cash and cash equivalents balance, and our undrawn available balance under our Credit Agreement (as discussed below), will be sufficient to meet our working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond. Our future capital requirements, the adequacy of available funds, and cash flows from operations could be affected by various risks, uncertainties, including, but not limited to, those detailed in Part II, Item 1A, Risk Factors in this Quarterly Report and the effects of the current macroeconomic environment. While the current macroeconomic environment has not severely impacted our liquidity and capital resources to date, it has contributed to disruption and volatility in local economies and in capital and credit markets, which could adversely affect our liquidity and capital resources in the future.
We may attempt to raise additional capital through the sale of equity securities or other financing arrangements. If we raise additional funds by issuing equity, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we may be subject to fixed payment obligations and also to restrictive covenants. Additionally, we may be unable to obtain debt or equity financing on terms that are acceptable to us.
Credit Agreement
On September 16, 2024, we entered into a Credit Agreement, by and among the Company, as borrower, certain of our subsidiaries, as guarantors, the lenders and issuing banks party thereto, and Citibank N.A., as administrative agent (the “Credit Agreement”), which provides for (i) a five-year revolving credit facility in an aggregate principal amount of up to $300.0 million, and (ii) an uncommitted increase option of up to an additional $300.0 million exercisable upon the satisfaction of certain customary conditions. The Credit Agreement provides for a $100.0 million sub-facility for the issuance of letters of credit, and certain existing letters of credit were deemed outstanding under this facility. The Credit Agreement will mature on September 16, 2029. Proceeds from the Credit Agreement may be used for general corporate purposes, including to finance working capital requirements.
Our obligations under the Credit Agreement are secured by substantially all the assets of the Company and our subsidiaries that are guarantors under the Credit Agreement. We may prepay, and in certain circumstances, would be required to prepay, loans under the Credit Agreement without payment of a premium. The Credit Agreement also contains customary representations and warranties, customary affirmative and negative covenants, financial covenants requiring the maintenance of a minimum interest coverage ratio and a maximum total net leverage ratio, as well as customary events of default, the occurrence of which could result in amounts borrowed under the Credit Agreement becoming due and payable and remaining commitments terminated prior to its scheduled September 16, 2029 termination date.
We had outstanding letters of credit secured by the Credit Agreement of $39.5 million as of September 30, 2025. As of September 30, 2025, we had not borrowed against the Credit Agreement, and we were in compliance with all of the covenants of the Credit Agreement.
Cash Flows
The following table summarizes our cash flows for the periods presented (in thousands):

Nine Months Ended
September 30, 2025 September 30, 2024
Condensed Consolidated Statements of Cash Flows Data:
Cash flows provided by operating activities $ 376,068  $ 138,753 
Cash flows used in investing activities $ (821,279) $ (22,603)
Cash flows used in financing activities $ (146,751) $ (56,732)

Cash Flows from Operating Activities
Our operating activities provided cash of $376.1 million for the nine months ended September 30, 2025. Our net income of $7.9 million for the nine months ended September 30, 2025 was adjusted by non-cash charges of $514.6 million composed primarily of stock-based compensation, amortization of content assets, depreciation and amortization of property and equipment and intangible assets, and amortization of operating lease right-of-use assets. The negative impact from changes in our operating assets and liabilities of $146.4 million was primarily due to decreases in accounts payable due to timing of payments, payments made to acquire content, and payments made for operating lease liabilities and other longer-term liabilities. This was partially offset by a decrease in accounts receivable, a decrease in inventories, a decrease in other non-current assets, and an increase in accrued liabilities.
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Cash Flows from Investing Activities
Net cash used in investing activities of $821.3 million for the nine months ended September 30, 2025 included purchases of short-term investments of $725.0 million, a purchase of business, net of cash acquired of $95.1 million, a purchase of a strategic investment of $7.0 million, and purchases of property and equipment of $4.2 million, partially offset by a repayment received from an investment of $10.0 million.
Cash Flows from Financing Activities
Net cash used in financing activities of $146.8 million for the nine months ended September 30, 2025 was primarily due to tax payments of $115.1 million to net settle equity awards vested during the period, and payments of $50.0 million to repurchase common stock, partially offset by proceeds from employee stock option exercises of $18.3 million.

Material Cash Requirements from Known Contractual Obligations
For a description of our purchase obligations and operating lease obligations, refer to Note 13 and Note 10 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report, respectively.

Critical Accounting Estimates
Our financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. These estimates and assumptions are based on historical experience, current trends, and other factors that we believe to be reasonable at the time our condensed consolidated financial statements are prepared. We evaluate our estimates and assumptions on an ongoing basis. Except for the accounting policy related to Business Combinations, as discussed below, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our Annual Report.
Business Combinations
We recognize, separately from goodwill, identifiable assets and liabilities acquired in a business combination at fair value on the date of acquisition. We use our best estimates and assumptions to determine the fair value of contingent consideration, and tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date. Critical estimates in valuing contingent consideration include the probability of achieving certain performance metrics and milestones, and the discount rate. Critical estimates in valuing intangible assets include, but are not limited to, the amount and timing of projected cash flows, customer attrition rates, royalty rates, and discount rates. We estimate the useful lives of intangible assets based on the expected period over which we anticipate generating economic benefit from the asset. Unanticipated events and circumstances may occur that may affect the accuracy or validity of such assumptions, estimates, or actual results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Fluctuation Risk
Our exposure to interest rate risk relates to the interest income generated by cash and cash equivalents. The primary objective of our investment policy is to preserve principal while maximizing income without significantly increasing risk. We believe that an increase or decrease in interest rates of 100 basis points on our cash and cash equivalents balance would increase or decrease our interest income by approximately $15.8 million.
Foreign Currency Exchange Rate Risk
Most of our revenue is generated within the United States and as such we have minimal foreign currency risk related to our revenue. Our foreign currency risk primarily relates to operating expenses, cash balances, and lease liabilities denominated in currencies other than U.S. dollars, primarily British pounds and Euros. Our results of current and future operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates.
We have experienced and will continue to experience fluctuations in our net income (loss) as a result of transaction gains or losses related to revaluing monetary asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. We have not entered into any derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk, but we may do so in the future.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.
Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control Over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings
Information with respect to this item may be found in Note 13 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report, which is incorporated herein by reference.

Item 1A. Risk Factors
Our business involves significant risks, some of which are described below. 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 pros pects could be seriously harmed. In addition, you should consider the interrelationship and compounding effects of two or more risks occurring simultaneously. 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. You should not interpret our disclosure of any of the following risks to imply that such risks have not already materialized. The risks facing our business have not changed substantively from those discussed in our Annual Report, filed with the SEC on February 14, 2025, except for those risks marked with an asterisk (*).
Risk Factors Summary
Below is a summary of the principal factors that make an investment in our Class A common stock speculative or risky:
Risks Related to Our Business and Industry
• the highly competitive nature of the TV streaming industry that is rapidly evolving;
• our ability to successfully grow revenues from advertising on our platform;
• maintaining an adequate supply of quality video advertising inventory on our platform and effectively selling the available supply;
• irrelevant or unengaging advertising campaigns on our streaming platform;
• our ability to successfully utilize programmatic advertising technology;
• advertiser or advertising agency delayed payment or failure to pay;
• our ability to further monetize our streaming platform;
• our ability to successfully operate and monetize The Roku Channel and our owned and operated subscription services;
• our ability to establish and maintain relationships with important content partners;
• popular or new content publishers not publishing their content on our streaming platform;
• the non-renewal or early termination of our agreements with content partners;
• content partners electing not to participate in platform features that we develop;
• users signing up for offerings and services outside of our platform;
• our ability to develop, maintain, and expand relationships with licensed Roku TV partners and manufacturing partners;
• our and our licensed Roku TV partners’ ability to develop, maintain, and expand relationships with important retail sales channels that we and they rely on to sell our streaming devices and other products;
• our ability to build a strong brand and maintain customer satisfaction and loyalty;
• our and our licensed Roku TV partners’ reliance on contract manufacturers and limited manufacturing capabilities;
• our reliance on licensed Roku TV partners’ operations for the supply of Roku TV models;
• our ability to accurately forecast manufacturing requirements and manage our supply chain and inventory levels;
• decreased availability or increased costs for materials and components used in the manufacturing of our products and our licensed Roku TV partners’ products;
• our ability to obtain key components from sole source suppliers;
• interoperability of our products with content partners’ and other third parties’ offerings, technologies, and systems;
• detecting hardware defects and software errors in our products before they are released to end users;
• component manufacturing, design, or other defects that may render our products permanently inoperable;
• our ability to obtain or maintain necessary or desirable licenses, certifications, or approvals related to our use or support of third-party technology, intellectual property, or services;
• our introduction of new products and services;
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• our use of artificial intelligence (“AI”) technologies in some of our products and services;
• maintaining adequate customer support levels;
Risks Related to Operating and Growing Our Business
• our history of operating losses;
• volatility of our quarterly operating results that could cause our stock price to decline;
• our ability to manage our growth;
• our ability to successfully expand our international operations;
• seasonality and other potential fluctuations in our business and their impact on our revenue and gross profit;
• attracting and retaining key personnel and managing succession;
• maintaining systems that can support our growth, business arrangements, and financial rules;
• our ability to successfully complete acquisitions and investments and integrate acquired businesses;
• our ability to comply with the terms of our outstanding credit facility;
• our ability to secure funds to meet our financial obligations and support our planned business growth;
• adverse developments affecting financial institutions, including bank failures;
• the impact of macroeconomic conditions, natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events on our business;
Risks Related to Cybersecurity, Reliability, and Data Privacy
• data security incidents, including cybersecurity attacks, or other significant disruptions of our information technology systems that could adversely affect our business and subject us to liability;
• legal obligations and potential liability or reputational harm related to our collection, processing, disclosure, and storage of personal information;
• disruptions in information technology systems or other services that result in a degradation of our platform;
• changes in how network operators manage data that travel across their networks;
Risks Related to Intellectual Property
• intellectual property infringement claims and litigation resulting in significant costs or the loss of important intellectual property rights;
• failure or inability to protect or enforce our intellectual property or proprietary rights;
• our use of open-source software;
• our agreements to indemnify certain of our partners if our technology is alleged to infringe on third parties’ intellectual property rights;
Legal and Regulatory Risks
• lawsuits and other legal proceedings, disputes, claims, and government inquiries and investigations;
• enactment of or changes to government regulation or laws related to our business;
• changes in U.S. or foreign trade policies, geopolitical conditions, and general economic conditions that impact our business;
• U.S. or international rules (or the absence of rules) that permit internet access network operators to degrade users’ internet service speeds or limit internet data consumption by users;
• liability for content that is distributed through or advertising that is served through our platform;
• our ability to maintain effective internal controls over financial reporting;
• the impact of changes in accounting principles;
• compliance with laws and regulations related to the payment of income taxes and collection of indirect taxes;
• changes to U.S. or foreign taxation laws or regulations;
Risks Related to Ownership of Our Class A Common Stock
• the dual class structure of our common stock;
• volatility in the market price of our Class A common stock;
• potential dilution or a decline in our stock price caused by future sales or issuance of our capital stock or rights to purchase capital stock;
• a decline in our stock price caused by future sales by existing stockholders;
• the impact of our stock repurchase program;
• dependency on favorable securities and industry analyst reports;
• the significant legal, accounting, and other expenses associated with being a publicly traded company;
• the absence of dividends on our common stock;
• anti-takeover provisions in our charter and bylaws; and
• the limitations resulting from our selection of the Delaware Court of Chancery and the U.S. federal district courts as the exclusive forums for substantially all disputes between us and our stockholders.
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Risks Related to Our Business and Industry
If we fail to differentiate our streaming platform and compete successfully with our competitors, it will be difficult for us to attract and retain users and our business will be adversely impacted.*
The TV streaming industry—including the sale of TV streaming devices as well as the sale of advertising on TV streaming platforms—is highly competitive and global. Our success depends in part on user acquisition and retention and the effective monetization of our streaming platform. To attract and retain users, we must respond efficiently to changes in user tastes and preferences and offer our users access to the content they demand on terms that they accept. Effective monetization requires us to continue to update the features and functionality of our streaming platform for users, content partners, and advertisers. We also must effectively support popular sources of streaming content that are available on our platform, such as Amazon Prime Video, Disney+, Hulu, HBO Max, Netflix, and YouTube. And we must respond rapidly to actual and anticipated market trends in the TV streaming industry.
Large companies such as Amazon, Apple, and Google offer TV streaming devices that compete with Roku streaming devices and those of our licensed Roku TV partners and the Roku TV OS. Google licenses its Android operating system software for integration into smart TVs, including those of certain of our existing TV partners, and service provider set-top boxes, and Amazon licenses its operating system software for integration into smart TVs and sells Amazon-branded smart TVs. We also face increased competition from Walmart (which makes and sells Onn. branded streaming products, including co-branded Roku TV models), in light of Walmart’s acquisition of Vizio (which makes and sells smart TVs with a proprietary operating system). These companies have greater financial resources than we do and can subsidize the cost of their streaming devices or licensing arrangements to promote their other products and services, which could make it harder for us to acquire new users, retain existing users, increase Streaming Hours, and monetize our streaming platform. These competitors could also implement standards or technology that are not compatible with our products or that provide a better streaming experience and have greater resources to more aggressively promote their brands through advertising than we do.
In addition, we compete for Streaming Hours with many TV brands, including certain of our existing TV partners, that offer their own TV streaming solutions within their TVs, mobile streaming applications on smartphones and tablets, and other devices and platforms, such as game consoles with TV streaming functionality. Similarly, some service operators, such as Comcast and Charter Communications (and their joint venture, Xumo, LLC), offer TV streaming applications and devices as part of their cable service plans and can leverage their existing user bases, installation networks, broadband delivery networks, and name recognition to gain traction in TV streaming. If viewers of TV streaming content prefer alternative products to Roku streaming devices, we may not be able to achieve our expected growth in platform revenue, gross profit, and our key performance metrics.
We expect continued competition in TV streaming, which could result in pricing pressure, lower revenue and gross profit, declines in our key performance metrics, or the failure of Roku streaming devices, our streaming platform, or our other products to gain or maintain broad market acceptance.
To remain competitive and maintain our position as a leading TV streaming platform, we need to continuously invest in our platform, product development, marketing, service and support, and device distribution infrastructure. In addition, evolving TV standards and unknown future developments may require further investments in the development of Roku streaming devices, our streaming platform, and our other products. We may not have sufficient resources to continue to make the investments needed to maintain our competitive position. In addition, many of our competitors have longer operating histories, greater name recognition, larger customer bases, and significantly greater financial, technical, sales, marketing, and other resources than us, which provide them with advantages in developing, marketing, or servicing new products and offerings. As a result, they may be able to respond more quickly to market demand, devote greater resources to the development, promotion, sales, and distribution of their products or their content, and influence market acceptance of their products better than we can. These competitors may also be able to adapt more quickly to new or emerging technologies or standards and may be able to deliver products and services at a lower cost. Sustained competition could reduce our sales volume, revenue, and operating margins, increase our operating costs, harm our competitive position, and otherwise harm our business.
To enhance our users’ experience, we also offer Roku-branded smart home products and services, and audio products, including wireless speakers and subwoofers. As a result, we face additional competition from other brands of smart home and audio products. If our smart home and audio products do not operate as designed or do not enhance the Roku Experience as we intend, our users’ overall viewing experience may be diminished, which may impact the overall demand for our products and our partners’ Roku TV models.
Our competitors offer content and other advertising mediums that may be more attractive to advertisers than our streaming platform.
We operate in a highly competitive advertising industry and compete for revenue from advertising with other streaming platforms and services, social media platforms, and other digital platforms, as well as traditional media, such as radio, broadcast, cable and satellite TV, and satellite and internet radio. These competitors offer content and other advertising mediums that may be more attractive to advertisers than our streaming platform. These competitors are often very large and have more advertising experience and financial resources than we do, which may adversely affect our ability to compete for advertisers and may result in lower revenue and gross profit from advertising. Many major
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