Roku (ROKU) 8 May 192019 Q1 Earnings call transcript

Good day, ladies and gentlemen and welcome to the Roku First Quarter 2019 Earnings Conference Call. [Operator Instructions] As a reminder, this conference maybe recorded. I would now like to turn the conference over to James Samford, Head of Investor Relations.

You may begin.

Thank you and good afternoon and welcome to Roku’s financial results conference call for the first quarter ended March 31 2019. our be Founder the our and Scott GM to Anthony today CFO; pleased will Rosenberg, Roku’s who Wood, CEO; of am joined for call on with and be I available business Q&A. Platform Steve Louden, to sure letter, shareholder than our more introductory remarks. which in will cover review the much detail be Please contains we any or only The of today, as this following management’s and do reflects we views discussion update including questions responses obligation not information. undertake X, revise to XXXX to your May

Some of and expected on statements risks to but made results financial full assumptions expectations, statements and include, are today’s second limited including XXXX of year involve forward-looking the forecasts regarding future for the call the based and and and the current statements business. the not are uncertainties. future These on quarter our growth performance our are Roku, and of of

materially for shareholder reasons. discussed information Our those in to could may results about and factors the call these letter refer differ Please the company’s from actual statements. filings forward-looking which this SEC actual differ results our with of for from to variety cause a materially today’s

measures in You Relations is website for of most reconciliations to our non-GAAP discussed you ir.roku.com. visit And today at important the IR website periodically will on measures the our find comparable which letter, Investor content. shareholder to posted company’s I encourage

be call unless results Finally, comparisons will the against comparable all this of of otherwise of period XXXX. stated,

turn like would to I over it Anthony. to Now,

are board our to the full our results is for outlook today’s year. Roku start for to and raising outlook and off the a beat everyone James great QX thanks we joining you, across the Thank year. call.

content be singular Our Roku driven publishers winning. is by consumers, our growth advertisers embrace continues streaming, and as focus to

new some services Roku’s streaming, team come. media acquisition massive unmatched growth for and an have publishers campaigns from platform, to In investments weeks, announced recent and in for new others partners compelling exceptional value years we fuel and the an help have world’s Disney, Apple of viewers and deliver alike. We largest customer will

shareholder and One the of quarter’s Platform this of the our themes is which at ecosystem. business, scale connects the entire letter streaming scope

Our distribution, screaming OS is is enabler development of Roku a purpose-built for advertising. and supports The content audience large business Platform and uniquely our business. and growing TV key Platform

call a idea TV Before more that am in Roku three than in milestone highlight Steve particularly were than handing smart would of. less in to the market a from In over first I to that one estimate U.S. gone We like Roku I to years, proud TVs disruptive X quarter, TVs. sold leader. the Louden, the has the the

OS the Samsung to from it now Steve. taken are the one country. number will now in have leads smart over the We and turn TV I

strong the well and executed first Anthony. in Thanks, delivered We results. particularly quarter

your through X XX.X taking first TV will strength outlook. financial walk continued incremental active our the questions, an Before in million Strong Roku operational quarter demand accounts. sales I delivered and player in active address to highlights accounts and million and

in XXXX. units $XX.XX increased X% sub players. and up hours spend demand were continue strong sequentially ASPs Player sequentially streaming broad-based of X.X ad total $XXX.X increased more a revenue. another months the last did record with revenue by by scale and XX% driven streamed monetized revenue Roku for ARPU development revenue of in sales they our Our ahead million $X.XX QX audience XX% quarter. $XX growth retail of to platform expectations video partners. than XX% X all users down year-over-year the were to distribution, strong to impressions driven content channel by Platform Total our year-over-year content year-over-year $XXX.X incremental again of drove on in X.X XX% we growth hours engagement million Player per core came as billion see user to in up billion and in XX% content to to growth.

quarter Our consecutive key which $XXX XX% mix to despite grew to million account drive quarter the financial player higher by $XXX.X performance XXX XX% Platform XX.X%, headcount this was up seasonally points this year-over-year $XXX.X above stock-based quarter. year-over-year XX% basis second higher marking margin continued and is that compensation. growth in to gross shift margin our active metric million offset the lowest profit, being business and driven quarter OpEx up helped unit million margins growth. declining our was partially with by in rapid Gross

mix year-over-year, revenue hires $X.XX on OpEx growth. new coming the results and billion in midpoint at strong Excluding stock-based XX% revenue XXXX Platform compared in XX% up XX% was OpEx below our profit our to expectations momentum to to profit in are to below primarily from XXXX. in gross of in $XXX year-over-year XX% QX, in timing two-thirds respectively came outlook which up was comp, and and gross due in QX year-over-year XX% revenue, our than expected year. be prior gross revenue With combined in let’s up and outlook upside is of Included outlook. million with roughly roughly positive outlook the our raising of into we adjusted total million which when the full Based later $XX that, profit delivered to EBITDA over planned, for turn QX. our

Platform For margin the shift model and full modeling premium mix to video the continued percent subscriptions. driven gross continue revenue as should by year introduction of purposes, to advertising low a you of in XXs

flow in we $XX Stock XXXX, optimizing for continues For loss to depreciation player our the player upside roughly strategy well. full through reflected work for of are platform players, in account of to growth breakeven gross our trading roughly in gross the you EBITDA amortization player to revenue other $XX manage roughly growth plan not the net to We as XXXX. and be to so profit we margin net of to low XXXX. and in of of the income margin expect $XX for outlook single-digits that income QX million, year. and is comp remind million expected and some million business in We are

revenue outlook growth For with up representing total our roughly year-over-year revenue two-thirds is at the of Platform QX, midpoint revenue. XX% for

Continued mix is and video a mid on expected combined gross gross our to combined roughly player margins. with drag advertising margins margin, for gross is single-digit shift when XX% remain Platform for to outlook QX

$X.X As gross and not that realized. in related release player be liabilities are of potential of a materialize not licensing accruals a expected reminder XXXX, benefited did QX million profit IP to from to of

XX% in would to hiring Excluding the as these and accrual releases XX% than place been have versus as reported. QX in QX recognized roughly in quarter XXXX, that took impact gross higher is of new margin expected QX. full we XX% of QX hires be QX OpEx in the

We million recently in agreement lease was to per signed and adds also million not prior our new $X quarter. that an $X a outlook incremental

debt, loss $XX.X of net the expect an Subsequent million adjusted I and EBITDA revolver depreciation common $XX amortization let’s With we million from at of neither business term of landscape that, Class of broader and the are that and the call sale consisting equivalents million the the questions. and roughly momentum the stock-based midpoint to with which pleased $XXX $XXX $XXX credit ended Roku. in streaming $X of million A of strong investments, income with short-term cash which million to quarter. of the we of includes are of end, net has result, included benefits $XX proceeds quarter million summarize by how a $XX net report to quarter performance by million stock. the million and available been we comp As for Operator? the a million turn saying we million of will and loss our $X.X roughly but facility income $XXX other the and upsized seeing We across drawn. over

Evan the Wingren first question KeyBanc. Instructions] with from [Operator comes Our of line

Your line now open. is

wanted the I quarter, side tough to in Platform the you we sequentially facing we about are there think and in Thank like year-over-year. as you. I some key the licensing saw ask comparison the acceleration drivers saw a first what

trying share the the trying understand outlook to in does do to then be? drivers? to? And the of that the rest And you. might just Thank then smart understand So the drivers ultimately a understand that wanted imply I decal, to just for just just can seem there of bit to X X to year TVs Anthony where of X that what finally mentioned go you gains think that why

and Anthony. drivers were example lot is Thanks XX% quarter The of the more This the business industry broad-based. than more services. Evan. of the that’s adopting Steve a is development are where audience is in will shares. very outlook, Hey, Advertising interest streaming we people a streaming let attribution impressions with in driving the partners monetized had which Then help increasingly in rev quarter their I Yes, promote that. again revenue we our our for content and doubled ad Platform that’s strong driving and talk for up question. about terms

Yes. Evan. Hey,

are the we yes, the with very and So, pace trajectory business. happy of

viewpoint still what roughly of the increased have outlook is outlook to season, it momentum forming we the XXs closer which the the QX outlook the in Obviously, So into the in for in the half year sales QX. was the kind increased outlook of full the reflecting we growth, but back or terms as well have year into we as of is from mid prior holiday good visibility, have the better XX%.

So, we good the are estimates but we this the kind best reflects at feel best this we have track, right thinking the on and of time.

where happy at. are was business we the So

Anthony is this again. Evan,

was In mean the number terms United smart TV becoming of I it country yes, the huge for smart States. TVs, milestone the in a OS one us in

in that’s TVs. And year Roku excellent. one sold a last reminder smart four were as TVs So was

and so it uncompetitive think are companies. And that are a right, the cases TV coming continue increase are in software solutions licensed and in big OSs was quarter sold TV solutions really TVs we probably of out we and number one last of those all the and gains share which of Just to by is almost homegrown is those that still three, most one we that see will solutions increase built QX, homegrown OS. just share licensed pretty the

is a It’s room grow. a lot of to opportunity. there So big

both Thank you much. very

Our next Oppenheimer. of Jason from question with line comes Helfstein the

line is now open. Your

were And Thanks. Platform? impact both are you see the perhaps in as something situations legislation, it Pluto, sell there the contractual positively about those Viacom question there question would like as sell to I two, the inventory? of one. Cheddar and about relates then because more continue data were both well, relationships of ads because believe themselves? that impact, When of will privacy And thinking ad the an Can assume etcetera. then can I acquiring CCPA you a acquisition to talk was and how particularly Thanks. you licensing want the year to for to if Roku the they negatively relation you So, shift that’s pending perhaps next

It’s Jason. the Scott Rosenberg Hey, for here. question. Thanks

comment deals share they do they by on in we into about consumer investment that on Cheddar the free accelerate for the except and all over-the-top. specifically their media companies We say When or relationships to OTT the will and content pie economic great focus are increased and the bringing of move We Viacom excited this, success. ultimately major expand us.

of of got through that as We tools they as uniquely well the on the referenced capabilities entities. ad you relationship both tech data to monetize. Roku relationship as are sales consumption a can development these well our audience through a drive better our so some both platform, data their help have an a monetization to as them positioned leverage great And ad drive we with expansion, relationship as services and

supportive that good making over-the-top. as progress view With done with to have we general, what on help control in legislation, as consumers your indicators to available more great overall, things GDPR. content are we it we shared. broadly closely So continue question In free is about regards watch information privacy we these of

as first-party we shared well As first-party a as and who think legislation Roku their direct is a allows general good platform, for them and good like for have what our which is got platforms in we both with to relationship preferences information a consumers this relationship. used communicate consumers, directly

is help this through subscriptions only the add for free making Jason, Anthony. previously want it viewing most taking that only not accelerate that and Hey, me available exciting that I thing Viacom MVPDs platform, was to the available is is also over-the-top about on Viacom/Pluto tie-up streaming. through ad pa-TV just fact streaming content to on I drive shift And of the services. dollars over AVOD think will that will the it the

Thank you.

with RBC of question comes Mahaney Mark the Capital Our next Markets. from line

Your open. line now is

question. one know little about how you kind and out not about that’s a give going Disney when? market Roku? just ask but I with have thinking Roku, there that of they talked really to out to Apple how help but you OTT going bit to are the of be looked in come us be Anthony, will what really sort will would like on put I Apple, just commitments Disney performance, December. streaming, vaporware, new those when about put be updated launching until with but some launches past, talked Okay, just advertise impactful talk on and how Roku these and more could out So and already to why to impressive a why and Are

to we Roku we users. about them excited deals, obviously specific new talk bring can’t and Sure. for are these but our to I services positive absolutely are mean,

some starters for of audience, For these are trying increasingly important tools development viewers, effective are we active very and services XX kinds to build audience increase accounts partner engagement. with an reach that million

We they can whole they they tools of are cutters, more a it of And and have the use drives cord course propels streaming, lot drive do generally. in it them. just interest that industry to buying that

positive all us. very So, for it’s

Okay. Anthony. Thank you,

Our with next Ralph from the Schackart comes question Blair. line of William

Your line open. is now

questions. Two

XX% First on or more was from that new about international international subscriptions. is Maybe and XXX you you of channel. both for have includes fastest subscription, channels when channels about Obviously being a paid about subs subscription driving if only philosophically strong, talked awareness Netflix premium they and global that? just the and has is given if engagement more some Roku Netflix was question the it whereas today Anthony, supported growing the Roku million at look ad paid curious quarter,

XX think large that do the today. You you as as as growth roughly curious of And progresses on think Roku? for international and subs are be accounts launching opportunity you in you terms had million could market Thanks. internationally just how

will let the then question I on CRT back Scott and take question. will international the Sure. come I Netflix

for Channel. quarter great a was The it Ralph, Roku

continue We growth. to see nice

As premium has growth. you out also notably seen pointed subscription great

Thrones launched in XX got Game We now have Platform. the for of season in the over HBO time partners premiere. We

its Our opportunity in is programming. view and of The Roku there is opportunity both supported that and AVOD Channel ad great

days months them the while subscription, over TRC. the We bill, one lots login And last recommendations one early are of well on we is still value and days, these XX more easier-to-use think strong. proposition added interface across value for to as to services XX then but have quickly content combined acquire the premiums of consumers proposition it’s an as retain for content owners through subs early

as of we opportunity old. Today, general, just it’s Channel. growth it’s about top excited a very and reach continued in channel and Roku years So, The the X in terms are X a under reminder for

Hey, Ralph, it’s Anthony.

was quarter of it’s to And So the opportunity. international that those billion like worldwide. of growth of will believe be of in It’s televisions one OS. households broadband think strategic Roku we the life I last a in we in X terms international, operating areas all highlighted worldwide switching system a four and of QX big newsletter a

And a so opportunity. it’s big

into We increasingly, don’t have to anything announce are this putting but it. specific resources quarter it about we

thank Okay, you.

Our Needham comes line of Laura & from Company. the next with Martin question

now is open. line Your

you Hi okay guys? there. you Can me hear

Yes.

first for to achieve to the Slide going year I’m last upfront, in upfront. what this upfronts interested you’re X, year time was the to week, Roku. next Scott, Roku, at went try

an here Roku? in increase leverage they are then coming better bigger Because, are it without and you and I you deals now sticking are these is doing even players to OTT Disney? be negotiating do OTT over-the-top guys. But pricing how so even can to are are that’s my though I actually launch being like service XX coming the And your guidance? your basically possible not. launch you say Apple U.S. that negotiate Steve channel though breakeven put is bigger guys question players that able million the into Secondly on by don’t getting would a Feel being Thanks know to market? you subs want EBITDA? can you better Anthony to

year this upfront as is actively out Laura. the the you in Hi are is processes. second Yes, point where this here, participating we Scott

going XX% for are around call of ad the TV than buyers and just down reminder during ad talking TV media, a community XX to new year happening brands made national which more targeting relative to in new are the upfront openly the executives their plan windows see. year Promises capabilities buying the folks rates other different majority about As agency window the aren’t the is XX decline their capabilities yet over of in like would what’s think that audiences ever are last the loads the than like frustrations with I this linear up. audiences. XXXX since more reduction Adults in to

very getting into OTT town are OTT. their go direct as of education money all out move the Agencies intent advertisers hosting in days So, linear are across to about upfront. they

We’re a key leader in and that participant process.

agencies audience the tools their increased studies have linear are the more the incremental they planning that to OTT to them case equipping that and relative can model understand with investment. most importantly Roku to accurately in deliver We help unduplicated impact can

the of commitments exciting an rest and it’s that going of a to their chance through really buying. window overall, So us brands for to TV year influence the make are

it’s Hi Steve. Laura

Just on about second question your breakeven EBITDA.

still the strategic TV we’ve as is streaming have that platform only in said believe great And we’re got we general accelerating. we’ve streaming the to leading in position. shift U.S. we the So, a

areas as prior us question. the mentioned we the international of running breakeven still in philosophy to invest is EBITDA Anthony a core our as relevant So, like around on business

continued breadth expansion advertising the talked as hit and business We about #X of for the TV depth becoming as operating Roku and that that big Channel of growing also TV program the well the milestone its Roku system. smart

of to to opportunities invest still continue rate is a and there’s lot So, growth appropriate. that philosophy

business positive the EBITDA EBITDA and the our guidance is is just the where update there on a and industry in slight that Having said did Given given basis QX. outperform an we trend. so given

$XX breakeven. on outlook outlook consider million. the to one roughly we still $XX would So, that billion, our year But is we’re for for million

And this is Anthony.

no tools a Just we the mean a I essential build tools we’re as anyone our competitive of launching that subscribers. grow importance an allow their we And in partner. partner have a they platform. smaller the of not there’s streaming have Roku services grow don’t you these scale also on services Yes, of your about to need for question do to great reference building service lot that. of know a streaming audience. are only audience they U.S. also but But doubt competition

a a for of a So, lot companies we in large this them of to putting have a very efficient marketing lot effort budgets marketing And that. budgets. ways have they’re of use and we’re into do these those

So obviously for service. yes, streaming an the we’re important launching partner

will from its upside you we Do that it the Disney think? or only on before see Disney market it will launches XX you service feel streaming launches it’s, November do actually marketing service after

don’t Disney any we might terms launching their service. do have in what can’t We of on comments

much. very guys thanks Okay

Vasily the next of Karasyov question Our comes with Cannonball from line Research.

open. now is line Your

massive with travelled business. Anthony, Thank prepared with long spoke of now in all you about course a in how moving And companies in. you it’s much your I much. the years way with you’ve very X these remarks think changing

and you terms all are you about that spoke of just your in partners. business partnerships So, partners

these with year. will you experience Viacom because their wanted not years little and of continue nervous I in ago DNA two you the of and think a adversarial that’s it’s had like Disney that dealing spirit partnership Disney to have them, different years ask bit a Cheddar who with are their do with distributors that guys So, in

out So, I future? in could plays you was wondering share thoughts your if how on this the

we’ve TVs been specific successfully. companies actually we others Internet all to Google shipping were milestone players been first that first I Android Yes company think Roku And us. very years so, to longer. remember TVs TV. Sure. competing before to with well weren’t selling like large we’ve that of But important and was it’s the that for the launch

solution platform well. We’re there building streaming. we singular now reason the It’s just #X streaming do competitive built were from and focus that because well platform. streaming our is the for and we And streaming purpose-built we fact on the a the devices executing for of TVs landscape ground-up that superior

In content that a launching to terms not in we They are direct-to-consumer living platform platform built consumers a competitors. do need of companies room and platform to Roku like thing. services for the on great our absolutely we’re they’re And they TVs. reach doing services exact that but

for for and So, they them important we’re are us well. as partners important partners

in for your and us things? But Roku way channel the And example in TV probably Pluto complete say a compete that will time of of can for advertising relationship a the for years with you U.S. budgets? shift couple to side influence that does the you adversarial more compete it

think so. don’t I

our as it’s goal them it’s we But we’re different to a help general, in linear partners be is the basically and don’t like partners on our different as industry, add Scott move know You our want TV we streaming. including competitors with in can you know anything? working do side. view Pluto biggest is to much help if our we that platform obviously to I as goal complicated advertising in ways our with so facets. the lots successful linear TV our And of from to same television

can consumers our owners a content as IP behalf first-party the standalone as power customers and a Roku grow just and partnerships. to in monetize on will other Anthony addition apps. of would content ad it’s partners capabilities add on their Roku I Yes. as our got said marketing audience help audience that well not our the services be on zero-sum reach advanced with to Also, to these relationship development Roku powers are We’ve another got increasingly emphasize game. tools the We’ve which Channel by capabilities. these better vehicle that

to these these services mutual new of into accrue OTT. benefit services all with that come as with they capabilities has So, our Roku

much. very Thank you

next from Our Shyam Patil of comes with question line Susquehanna.

now is line Your open.

for is Brandon on This Shyam.

Just ones. quick a of couple

would about terms contribution should growth, you in content we versus kind sort outlook your like GRC or partners the drivers quarter? And the can think allocation of of about underlying call of focused talk anything and the then just of guys some XXXX the guys you sort question. terms are of Just like of on just there kind how monetizable out? in additional last it of else from of And tech that ad ad increased hours for on side in building and in in out the referenced you going where you to beyond? with But capabilities advertising technology market

broad-based Brandon, more regards the impressions to Scott of in impressions. monetized monetizable here. our is ad on ad doubling With growth platform than growth with

We’re Channel place both the platform. the is as growing That as seeing Roku faster in in broadly The monetization platform. ads growth where overall function process we growth well across than of

very as well. are share is our growing our platform command attracting on of the economics of ad biggest CPMs, we ecosystem. continue Overall advertising though fundamentals new net dollars just so, our And the into strong premium focus course the to

client TV We targeting by our are interactive extending bringing products in net measurements new new and capabilities. new new broadening capabilities ad doing that advertisers with our base

as to to digital advertisers through partnerships impact sell You research And we’re tech bottom a yet to our help to of research direct with ads research reach Already mid also new to deliver that and There’s to and terms continue prove forms of shift but basis new out demonstrate of tools asked TV. in insights Roku about a in place other we offer advertisers just for to lot both we well of than new advance to as vendors. ability focus linear linear to do. incremental that the impact budgets partnerships our through our great advertising. significantly on of in funnel on continuing terms platform ad more planning we’re reserve not the a add significantly work drives continue programmatically

you Great. very much. Thank

Michael Guggenheim from Morris of comes the of Securities. question next Our line

Your line open. is now

Good Thank me. for you. afternoon. couple A

mean distribution were we Steve take what First platform if from Platform of in referenced when to drivers should you. Roku wondering Second particularly the content driver Channel developing your was that listing view quarter And the at some growth is content The percentage of third advertising? your or revenue largest you in to came you Thank the the at picture, I’m assume relative licensing what exclusive And the segment growth bigger content to point? distribution that for advertising? quarter first. then of

Michael, this third. the others will couple on in is I and first take Steve. can the chime

sometimes over our and those In break billion terms the shares our biggest out in and with past TVOD they other the that But the is It driver. opportunity some example not amongst performance things tremendous the advertising remember segment following piece. the one in intended these players. components have think was specific access a the the great. is terms about TV have all deals biggest biggest of been largely the those certainly, include with on prioritization note the They take growth include the kind coming time. we they and rev is an way or $XX monetized it’s of driver segment, even budgets But there’s just broad-based of video the ad content impression of breakdown of viewership that their said relationships the they of we agreement could SVOD Roku inventory So, that Platform our to robust were intertwined Platform to development distribution. platform Certainly, we biggest my it publishers the to the purchase over historically of is to traditional in as the right? was be But don’t are audience of think, there thing advertising MVPDs overall ordering component. in has broad-based works virtual businesses may wholesale that means and development spend are different how the advertising over content moving of the growth audience and I the

more it the especially the on So opposed there. these on as to we at players with within sub-segment specific look side Platform side a relationship

original it And content original have free then no big deepening great is subscription license control can helps our well the and have we content. into viewers. content centre. premium our platform We advantage models integrate categories of licensing to front adding single to make aggregation brings we content terms adding really plans and as bill can is content a make in and TRC can our to do for that In TRC point like focus content it more categories we We interface that so great a on it with user as we we adding we And viewers targeting. content can have different business content. live best content can the our

just portion material to on growth the quarter? premium the contributor subscription a in the first And was that Great.

have It’s rolling don’t out now. days a specific on early that. We but update it’s just

you great. very Okay much. Thank

next line comes question from with Our of Morgan Stanley. Swinburne the Ben

now is Your line open.

couple former a sense. do OTT businesses. in starting really, terms ad-tech and lot ecosystem or the as side? of moving think TCL positive YouTube the lot we a then international And appear for A all at I’m just I’m and the adoption in incremental guys? of your a ecosystem, or sort guys at the as terms Should involved Scott we thinking linear as the Is I if if you you wanted curious of from wondering, sort we’re to just strategy businesses been might level theme curious sort on sure shifting different? for with agency and sort Roku with OEM you at and Scott, Desk about noticed States? in that secondly, and opportunity there’s of services know new to just ask then plan competition. focused of of makes others Roku for you you look you’ve along dollars outside of TV potentially Trade the guys stuff, I’m the at a has that a when about all start-ups an you. or some And there, of be I’m partnerships as or focus the just that on just like you competing long-term. the safety I these United Thank video lastly, elsewhere over, noticed of see players be or the strategy Roku you driving alternative like dollars on sort employees of economics a even focused positioned ad-tech obviously are brand some line value-added And plans OTT international see the ever point in dollars, just sticking for around I’ve have just opportunity other on it’s expecting platforms U.S. formalize digital

of question it Hey, OTT, questions Ben, regards and view we all to participate your as And, positive with attention, those general, content I’ll to to take Roku question viewing advertisers. content when the for net In course, that bringing to as Anthony. the net in first about economics a driving consumer opportunities then when Roku, the around the international and two pass activity awareness, ad-supported more of we great raising content. creating comes apps, that

we audience tremendous excited as data general, to in of on ad in add platform, we help and their their as through Roku, both Roku the monetize to grow terms it. value relationships. a on market So, efforts able as well them about sales platform, are being and And

to of as in that we moving is our trend. in that. focus TV company linear out see as So, And general, people these view accelerate a and OTT we’re services helping into excited

helping focused question the video looking premium in very you the room, There safe. We reallocate are second their but the are throughout digital for us. home it’s advertisers a opportunity as of that’s content, not of your spending, point the it’s in TV end living TV out ecosystem also dollars because brand whether longform, lot its are it’s better often for that a spent in

And engaged is digital-first ad relationship direct-to-consumer ad first-party strength, control be brands, stack a strategy power from across the them so also our the OS platform comes ad bring At our that from customers the brands, the to part from with the Roku of of invest. ecosystem. with is our and and our of to helping reach broad our day, the as end platform

to we in and again as benefit so question, your those us all increased AVOD this back to helping first participate capabilities from OTT. activity view And

Thank you.

needs don’t that’s and that States important international, we TV smart in terms much have as I there’s and system – Anthony, and the that Canada United are trend an every In obviously of, that of and that except TVs add terms opportunity currently believe is Mexico, in an Roku operating we’re part internationally. a big as available of to this say well to

Thank you.

of question from Evans comes line Stephens. Kyle the with Our next

open. now is line Your

thanks questions. taking Hi, my for

comment growing the forward? You best outside period how the accounts net quarter. of churn TVs guys of numbers add ever change quarter you’ve in had might in the the that smart fourth you embedded of in Could on the being going active and churn the the importance had

Yes, it’s accounts quarter We there. growth a so we great hey two robust Yes, Steve. yes, and added continued million in of Kyle, adds. terms active had that’s

lot end quarter, on In effect reminder or of the kind Halo sort over where but accounts QX. the of near their players was a season, TVs the the terms of it of the run of active of a strong a seasonality, holiday into at quarter. also The people get

a is a strong there quarter performance the seasonally bit quite was So, – strong. although it’s

metric churn one kind on that directly to of platform. pay stuff, a you don’t not the the because is attention Roku the engagement about talk binary the is and We lot us to. of account we terms churn interesting and of a active that’s of that pay things In generation really

X.X roughly platform Roku day, be is key of and important look about the the U.S. that engagement indicators which is TV, average the mix of and we that to viewing. us, hours a for focus an fact so to on at on the on is up that’s is And user of household acceleration thing getting one to kind average the the which that substantial a XX% TV is time us for of of

trend So, with we’re there. happy the

you. great. Thank It’s

Our comes line question the BTIG. Rich Greenfield from with of next

is now line open. Your

kind the the on questions. channel, happening channel got either I’ve by paid on the Hi, what or placement? the And is for how are of in not sorry, content housekeeping the the selling is I you’re business? got you owners is that thanks Roku actually almost Roku based ad And a – couple of there being at platform? top follow-ups. a when put point, then your featured, then usage Roku like choose being One, of and apps What to viewer look few. just featured that the a off that what’s you at on looking the for of are interest, related driver programmed that on what’s up actually as taking website, featured much we devices content to across you that, that

here. Rich, Hey, Scott

aggressive watch. you try Regarding how content to we’ve days, been percolates what to features out it’s but early quite recommendations in to and other to want top, rolling the still anticipate

And of we’ve And drive on optimized we machine fundamental interesting increased of so those where Roku watch. work got in channel see The learning driven a still lot usage that what on success likely good to of have you’re majority of We’ve is Roku you on platform, consumption content estimates monetization. general, the that driving advantages doing engagement. in course, and ahead. we’re vast the our going to is algorithms our in based seen

noticed I’ve up, of earlier all think about ESPN+ I’ve the asked button rising and remotes? that noticed SVOD button any those way does how – just all. of buttons on so I is – buttons? business, estate about then the But to noticed how having those your great or the which side benefit on do real industry, is I’m the it you wondering, we’ve drive is in someone showed competition, curious, valuable Is – drive which And usage that think there just and buttons that I’m and on historically for

Hey Anthony. Rich, this is

engagement buttons, very is do a test all in are card they sell they’re disclose lot the them. in it. remote per buttons of to and increased in the of is our for out, done – button one we audience a they rate tools We but – work. bunch There partner high We’ve what well increase of sign-ups, it’s have button. don’t – worth four demand the We there development don’t gauge toolkit. we in from they having don’t effective They’re

And Anthony. then you, just last for question a high-level

that an increasing channels Roku most-watched in in of the at most-watched your percentage top on YouTube look X. any day you top given with I first for it the publish looks the our vMVPDs showing time the As up like apps, site,

negative, relative those size I net we up think that about the think rising Just vMVPDs positive a how versus kind AVOD moving just to a of know Is that – don’t the for others in wondering how versus of is do down? moving Roku overall about usage? applications,

grow Those the category because relationships for cord much continues in consumers MVPDs bundles user for great to Yes, cut are look a they very all are OTT. other It as it’s us and those the all for us. parties, great options, in of acquisition virtual healthily other mode.

top service. to work of very general is, intense additive before they that device whatever they MVPD so a those of pattern your And terms drive to on of Roku consumer in drive observation popularity, them. percolating to up virtual to they usage they’re their platform. doing consumption it’s very subscribe subscribes the with usage And of their closely once consumer us With the services that on regards was

a It’s well. their MVPD of as we’ve is behavior streaming interesting thing – traditional when different a that’s is they watch lot also customer. that noticed One than were services users virtual pay other not TV

does the really what services moving viewership for it Roku. fill TV consumers to of for dial looking to and and cutting for deal It to appetite the are seals out It the in the sports though viewing and their cord that live TV. consumer Yes. all sort watch

of down, just say, let’s watched world, that make shift point clear to, a is vMVPD, if to your Roku? benefits you go other these all in TV you just so you vMVPD and actual linear Roku be you XXX to to just the watching on watch on hours applications if linear that you trying other the lot Anthony your channels but But also were usage of watch of but up a may Roku, view end of because you also

Absolutely.

Yes, that’s right.

Thank you much. very

next comes Citi. of May Our from the with question line Mark

line Your is open. now

And the segments while, grow about in new or just accounts don’t can asked to came under-indexes versus know, in particular of share? them on you margin kind of think it? platform been to you now think And at XX% look and trend you like to basis, deals it’s the meaning feel quarter, the there much you terms me of for kind Thank been your this yet, X guys versus however gross in a margin, pretty close two get outlook, to gross last have you. standalone there but, you Appreciate from the Roku of full-year kind questions low-XXs it. how the but trend and been of of I if guiding know OEMs the TV are the let connected any non-premium don’t that has premium, I those XX%. players? sort but quite so, then TV industry high-XXs based So, To margin incremental got opportunity TV a on the in SKUs might dramatically. have it’s for a if talk where of quarters, while a on market. down a was it’s a really that you on

X going Thanks. quarters seeing is to been last versus what at next the you’ve quarters? the of what least couple change So, over

I’ll two. the is Anthony, first take This

of the terms new of growing it’s still accounts half part from of coming it’s in and So, coming rough, from players. that. half been roughly fastest have TVs account TVs mix, new historically the

is move, us the sell and that are for picture SKUs, quality, Roku with TV important started to think market TVs includes OEMs, share. the mean, In the market gaining the OEMs of I not all The have we so, we lots quality, best losing is partners you say terms partners generally brand look there’s would percent when I OEMs licensing move we best Roku’s of started are to that we’ve – mean, factor I traditional And excellent entry-level upmarket. if that’s the various almost good areas, market our continued and TVs share I our for are we, OEMs XK the that continued are TVs TV more those – they growing, that XK first with are other OEM another and and and – Roku upstream. over I compete that best in business, at with when better, different another TVs now moving then best, picture in more got say that under-indexed of TV TVs into time, we

So, just on question. time trend – that’s X on us I as that’s like helping goes as And sounds Steve that’s it well. number think then another a

a early more is structure, on a ad gross large because that a – tends the to we content as be is platform platform than other gross couple doubling, pressure the handled the it’s has last which have well. margin just potential so the margin growing now pieces to can that put on business. it’s so and but ad margin, then business for mentioned I as at two Yes, mean, the of video about, certainly are talked impressions piece, the that which the XX% because again And monetized payment Roku we’ve considered on subscription days, a the video continues then can plus the fast basis and grow COGS, business, margin and growth quarters it’s of to that about provider then premium piece the that very a effect the

obviously mixing it’s margins have to over So, margins faster been those think are down two included But are we’re the outlook over up growing have in margin and that platform. into keep platform that – that factors very potential time we higher and to are company that our happy – ticking drive the time. the

impacted you last quarters couple to factors why the us haven’t of platform in margins though? these talk Can about

businesses process an the is of days and piece. like And it’s launching, this Well, new the so rate a subscription unknown. is is the that down and premium year that so in big of early how growth I versus becomes just said road

growth but have the great So had then front strong development to said this but think on that we’ve I also it’s and distribution extremely high-margin on those growth great are a can like we’ve and we content quarter had advertising audience some things. very And frankly change problem businesses.

higher I’ll take connected are different have really these the what And relationship again so the day. expected. problem mix and the have working pieces they that’s together we of with All But content with our are margins those any kept would things than well that publishers. different

Great. Thank you.

of Elazar of question the comes next Our line Siegel Chaim from Advisors.

is line open. Your now

in could great just on about looking you and have year. you raised am a looks wondering the this Hi, EBITDA trends revenues some It kind and year, estimates guys. the with that to gross quarter. your that I going out leverage like next favor? if into you margins talk Talking going Congratulations about profitability of next year the

Steve. this Yes, is

guidance We beyond. XXXX provided and haven’t EBITDA specific for

invest leadership our of But mentioned in in the the has positioning that I we on given revenue the our the trends earlier to basis. all continuing the we business industry have is appropriate. business As a that trends think middle strategic given in been these certainly position accelerating the and

a returns. areas We have of have a lot we very long-term robust But to gross we great pay profit. invest that great think

XXXX think for is EBITDA adjusted the So case. we roughly right at breakeven running

a we time However how guidance the provided lot we there again business. right that XXXX do haven’t and think for that is of specific in leverage over now

leverage higher a lot that in platform as As great faster margin of growing is a mixing position I and a long-term we further overall business there’s model grow. into continue business business mentioned to

of Best great. sounds luck. It

Thank you.

would at closing queue to call the time. in turn to Wood questions Anthony further like remarks. no showing for am this I I back

thanks say to everyone today’s for want just I call. to Thanks. joining

full and strong were pleased with are for results quarter outlook first year. we Our the the

and found conviction. I streamed. all largest that media because know share TV world’s would TV Roku now and The most advertising You be companies successful all

new streamers connect in only Roku help Platform the We’re The powerful. struggle the It’s will is you that millions to with become us sets future. excited more that thus millions with not who accounts services their apart. average active scale to the of as

position we as strategic U.S. smart And well. the in one achieved position strategic have the OS executing a number are this We TV

support streaming. for So again thanks and happy your

thank gentlemen you day. program in today’s participation your and may the you now conference. great Ladies and a for have disconnect. This concludes Everyone