Roku Reports 16% Revenue Growth, Improved Gross Margin, and Reduced Loss in Q3 2024

As of September 30, 2024, Roku, Inc. reported significant financial developments in its quarterly 10-Q filing. The company achieved net revenue of $1,062.2 million for the three months ended September 30, 2024, marking a 16% increase from $912.0 million in the same period of 2023. For the nine months ended September 30, 2024, net revenue reached $2,911.9 million, also a 16% increase from $2,500.2 million year-over-year. The growth was driven by a 15% rise in platform revenue, which totaled $908.2 million for the quarter, and a 23% increase in devices revenue, amounting to $154.0 million.

Roku's total gross profit for the third quarter was $480.1 million, up from $368.8 million in the prior year, reflecting an improved gross margin of 45%, compared to 40% in Q3 2023. Operating expenses significantly decreased to $515.8 million from $718.6 million, leading to a reduced loss from operations of $(35.8) million, compared to $(349.8) million in the same quarter of the previous year. The net loss for the quarter was $(9.0) million, a substantial improvement from $(330.1) million in Q3 2023.

For the nine-month period, Roku reported a net loss of $(93.8) million, down from $(631.3) million in the same timeframe last year. The company’s total stockholders’ equity increased to $2,460.5 million, up from $2,326.3 million at the end of 2023.

Roku's cash and cash equivalents rose to $2.1 billion, up from $2.0 billion at the end of 2023. The company also reported an increase in inventories to $191.2 million, compared to $92.1 million previously. Total liabilities decreased to $1.8 billion from $1.9 billion.

Strategically, Roku has initiated a shift in its key performance metrics, moving away from reporting on Streaming Households and Average Revenue Per User (ARPU) to focus on Streaming Hours, Platform Revenue, Adjusted EBITDA, and Free Cash Flow starting in Q1 2025. The company reported 85.5 million Streaming Households, a 13% increase from 75.8 million a year earlier, and streaming hours increased by 20% to 32.0 billion hours.

Roku's restructuring efforts, initiated in late 2022, have continued to impact its financials, with significant reductions in operating expenses. The company has also entered into a new Credit Agreement for a revolving credit facility of up to $300 million, which may be used for general corporate purposes. As of September 30, 2024, Roku had not drawn on this facility and was in compliance with all covenants.