Roku reported a strong third quarter as it prepares for its planned acquisition by Fox Corp. Revenue reached $1.50 billion, a 24% increase from the same period a year earlier and above Wall Street expectations. Gross profit also rose 24% to $649 million, while net income climbed to $183 million, more than seven times the year-prior figure.
Revenue from Roku’s Platform segment grew 23% year over year to $1.3 billion. Advertising and subscription sales within the segment each increased 23%.
Roku said political advertising during the quarter exceeded the comparable period in the 2024 U.S. presidential election cycle. The company also reported its strongest year-over-year revenue growth in four years for its media and entertainment advertising category, attributing the performance to media companies investing on the platform to promote content and services.
Viewers streamed 39.9 billion hours through Roku in the third quarter, up 9% year over year. Revenue from the Devices business increased 33% to $194 million. The segment continues to operate at a loss, recording a $48.6 million operating loss and a negative 25% gross margin, primarily because of higher memory costs.
Fox Corp. announced a $22 billion agreement to acquire Roku on June 15. The transaction is expected to close during the first half of calendar year 2027. Roku did not hold an earnings call or provide financial guidance, citing the pending acquisition.
In a letter to shareholders, Roku founder and CEO Anthony Wood and Dan Jedda, the company’s CFO and COO, described the deal as an opportunity to accelerate Roku’s strategy and expand its ability to innovate for viewers, partners and advertisers. They highlighted efforts to increase monetization through deeper integrations with third-party advertising platforms, growth in Roku-billed subscriptions and improvements to the Roku Experience.
After the acquisition closes, Wood is expected to continue working with the combined company and join Fox’s board.
Sources: Variety.