Roku (ROKU) 15 Feb 232022 Q4 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Q4 Roku Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded.

I would like to turn the call over to your speaker today, Conrad Grodd, Vice President of Investor Relations.

Thank you, operator. to Quarter welcome XXXX Year and Call. Earnings afternoon, Roku's and Fourth ended Good by Roku's Anthony and today joined I'm Wood, our Steve Founder CFO. Louden, CEO; and Media; are Also President, Katz, Collier, for today's Experience. President Q&A on President and call Consumer Roku Mustafa Gidon Ozgen, Devices; Charlie

our our of details Investor roku.com/investor. in Relations and which can commentary are additional website Full letter, management be results available our shareholder found on

which on disclaim are expectations and this today predictions, Our future such obligation statements headwinds call the management's projections financial comments your and conditions industry. regarding information. market macroeconomic about of we business responses regarding views future we'll as forward-looking this only, update outlook, or questions our our and call, be events, impact any to to other as this our and statements, reflect On making of statements on

materially our for on and letter forecasts based filings SEC uncertainties. shareholder to financial on also measures are factors We'll certain refer assumptions risks actual to discuss results in and statements. to Please statements current forward-looking financial from our call. provided shareholder our most are that could these comparable non-GAAP information and periodic involve cause expectations, measures Reconciliations the These GAAP on letter. our today's our and differ

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

the hand over Anthony. to to like call I'd Now

year for industry progress market. Thanks, Conrad. advertising building difficult and platform, XXXX was for the our leadership. brand a a difficult despite and made on this, year But Roku excellent investors

And in approaching OS. we unmatched. We using reached Our million half the scale accounts households are XX are U.S., and globally. Roku active the of broadband engagement

This Roku the now smart hired U.S., Canada President, are leader, as the Charlie Mexico. in TV Media. we OS fall, selling proven a we and Collier #X past Additionally,

named Experience. also Gidon President, Devices; President and of Ozgen, Katz, Mustafa We Consumer

to an With industry our TV. innovate, is differentiated when foundation, not is the thing the their continue they TV. turn first XX for leader. see we this operating on home that system screen, households The purpose-built Roku It including OS just million only with

to benefits engagement Our of our home by unique also our opportunity but significant home scheme from viewers, throughout presents screen not the and a created The the also of Channel monetization advantages our platform. only integration our Roku grow platform. the

Roku estimated the In grew content. QX, U.S. hours and publishers million that more streaming This their partner the for choice with owners than scale a year-over-year. value XX% reached make of Channel engagement households an and a and Roku content maximize to XXX Channel of want the people

pressure pressured monetization. to The the macro Turning continues and environment to ad market.

Roku than As move revenue XX to million grow a scale, years, XXXX. XX% with to in prior growth our advertisers innovate to accounts. full our and platform lower Platform and with year reach but scale result, increased streaming revenue intend year-over-year continue still We grew grew monetization. to platform by was We in and

tightening, leverage has business Our going through belt relative inherent moderate revenue combination to of expect and we expenses growth forward. a will and

OpEx the the lower growth year-over-year progress rate we year. continuously through will as We

in EBITDA improvements XXXX with adjusted after We positive continued are driving to EBITDA that.

Steve. call let that, over me hand to the With

XXXX markets. Anthony. million. in above year program the Full TV In ending the Thanks, grew X.X by Roku adds of and active X.X XXXX QX, million million, XXXX with net both we accounts and U.S. by XX international driven were primarily levels,

full XX% significant year streaming platform up a hours grew also household to billion the are year-over-year, growth. grew while viewing, hours QX growing per year-over-year per roughly hours. XX.X TV billion engagement with year-over-year. on streaming Average XX% XXXX XX.X streaming We our record active We hours leaving opportunity is in increased of average hours, X% QX day year-over-year X.X which account for to U.S. half

expanded our our licensing arrangements and reorganized we align includes Devices We sales with current based devices and now of of historical renamed to which range and the As of segments. TVs. quarter, streaming the addition segment products; operators organizational fourth on segment, Player the segments to Roku-branded Financial brands smart hardware reportable structure. our better XXXX, with recast service and sales TV in these is of players, information, in products, reorganized starting audio home to

total QX, to was Platform year-over-year net In X% was flat million. revenue at year-over-year million. up revenue $XXX $XXX

in player to QX uncertainty advertisers. pressure came consumer inflation platform revenue our difficult macroeconomic and declined continue QX and reflecting devices a XX% XX% environment. consumers year-over-year, unit expectations, While and and sales above respectively, revenue

and X XX% QX QX ad total devices driven down by was sequentially, XX% gross was which as caused weakness acquisition margin insulated year-over-year prices chain consumers pressure disruptions was but and Platform in continue we negative gross of margin certain year-over-year stable margin was the market. points XX%. to by points QX down from scatter component elevate higher roughly inflationary that account costs. prioritized supply X

percentage X by above segment, year-over-year The profile. between EBITDA was The better-than-expected revenue total both compression with the our operating profit. outlook. and which year-over-year total margins to was our of rates negative point resulted improvements gross QX along device adjusted performance in million growth $XX was in and million, difference platform a $XX expense platform our driven

we to workforce and cash. that $X.X over adjusted added was the to $XX note onetime with primarily a charge reductions Please million, of ended quarter of back billion EBITDA, related

to profit the XX% negative of of revenue our net We adjusted and quarter. million outlook gross first $XXX total turn of Let margin $XXX million. anticipate million, EBITDA me $XXX with of for gross

macro the spend to and trends have advertiser consumer continue pressured term. near expect We the in that

roughly For total net revenue, seasonal of we anticipate quarter-over-quarter. normal decline XX%

spend weakness continued in compressing platform expect mix advertising, This result video we toward in margins. near segment, Platform in shift a term. will M&E the Within

negative for margins improve a QX single normalize. XX -- continuing period to from negative supply in chain retail our On we high devices to in lighter the And to this digits reflects QX. improvement side, expect sequential and promotional outlook

manage better profile. to we continue challenging the operating To through and operations our expense environment, macro improve

OpEx lower approximately growth. of is year-over-year QX, by XX%, deceleration further our And OpEx We the significantly growth to year-over-year over anticipate growth of expect which sequential course we improvement. a to result, year-over-year a expect single-digit the As QX we XX-point year.

we work full ongoing are carefully expenditures, XXXX. path positive a that delivers manage our EBITDA to year to Given and adjusted committed

Looking challenging and execute gives along and ahead, our ability advantages, our times. in with our to competitive navigate conviction us engagement, unmatched scale in

that, take let's questions. Operator? With

[Operator Instructions] Our first question will from be coming Carpenter JPMorgan. of Cory

where with then first well. focused? quick after great other changes. key see call, your some earnings follow-up on where you're being the maybe Charlie, most this your hear most potentially opportunity it'd to priorities have to side, be the a And as and you make I And also

approaching scale, these a a long linear in for of your country. most admired And could of admired there, course, from nearly join And that first-hand technology. and is pleasure the Cory, envied I first-party Roku households Roku’s broadband that from half unencumbered question. relationships data recently short Thanks, I calls. for and I've strained. it. television I I appreciate the innovation order, time, be Roku's CEO as see It's and would most Entertainment. which unmatched in differentiating perch, the its to FOX advertising

So particularly buying that the even streaming day all done differentiators few soon I'm the Roku's now we and into compelling, as first. video Roku role my at months where very happy approach more are will actually a planning to be share

it entertainment to together, the the the world, greatest greatest and And Media's in and one the goal priorities, history build to is this industry's make platforms Cory, lofty of happen. it's time speak So of to one Roku the I to in media modern businesses on a that focus of set the is Anthony world. our in top and

for it's the of and helping the do with exciting turns app. viewers on build And most Roku One Roku we're begin our platform things viewer viewers that is that Right it's viewer a about Roku's most TV, streamers. with far than earlier because helping partners. and a platform streaming a through conventional journey Roku their there, guide streaming not when they engagement

Media's After needs areas So team with L.A. dozens of talented about well to in and Chicago as we as customer remarkably focus, focus. you have of meetings Cory. New York and in Roku at in early the three then listening Roku CES conversations and asked

For adding and world with and retail to first transact more already they of actively programmatically and is we're networks like our on partnership, buying planning DSPs, And where with Roku that's then our on third-party and terrific the including than relationships, coming media -- on partner a in media faster which partners where Walmart top media stop breadth meeting Connect marketers shoppable one, coming, also and three, where focused there. entertainment depth most we're platform. Two, adding it last overlay It's we're doesn't year. focused a streaming distinct and we're announced realized. we

wars streaming a just not emerging is the of So that I'll in for Roku tremendous appreciation the close but all on is and actually saying that platform, by the streaming an advantage there's player being fought wars another Roku are us. that

you you think platforms and the it the there the on mentioned in And with letter now how your developing just programmatic just third-party as up this a follow-up, about Could a and relationships philosophy bit mentioned opening side. well, just cons on more? as more just expand you and it you so of pros potentially

we're have we many relationships successful and Cory. Thanks, fortifying. Sure. that broad Look,

for data, impact platforms inventory make feels So accelerate to marketers every generally making . overall sorts speaking, through so third-party evolution. sure with we're it from that DSTs. relationships media basically retail the of third-party to easier goal developing all we're Roku is to My this and marketer of

is they The and And and many all to for our optimize the think again, with when philosophy remain the streaming. there its Roku in Roku currently to place is both where plans partners buy programmatically, going day marketplace. the begin increased opportunities, wish meet to meet simply we're marketers demand Roku in they're to and to breadth where while will coming transacting relationships transact. We and special media soon currently best marketers a

on party with first along the data So specialized those continue their and Studio, will our to be Roku only like advertising ACR products Brand ad platform. accessible Roku our

Kroger Walmart more. not So ESPs, and we it's DoorDash, partnerships have many broadly, with just Connect,

days the as adapt these So and early fit. to we'll see market are we

Fargo. Cahall coming Wells next question from Our of be will Steve

discuss Maybe your first, if you could and contribution from wondering international net if the adds a I was significant just there expansion. was

to a we it a do growth a XX% year-on-year the Just for And things streaming then that, quarter. we as quarter. that is trending. worse trying domestic about piece? better sense bit in or as even the kind your maybe from to implies guidance of about of like X hours of versus adds growth think down gets fourth forward, I get improve platform the monetization Looks related first how proxy the subtract like really in was that, doesn't is to the think international net And revenue going

just it reflects maybe was and the to kind shift I if going more its just as macro mix into wondering is impact that international still challenged if So be the we ARPU? on of get that's QX. of Or

I'll Steve first second question take then and can take the your question.

had we a big accounts streaming why a the adding we adds, million year now. accounts, yes, is million year that And -- accounts. new Well, last actually the land active leading had popular right And year super great in new platform. So it's is I because active XX active streaming almost happening? at net mean, XX picture, is really to Roku

obviously helping. that's So

We have brand. a great

We’re products that for and of that mouth And lot incredibly generates unmatched are super on focused simple our word building products. value. of delightful, a

Morning a Gen which Zs, the brand recently is by Consult cool. there among Roku was fastest-growing report saying that is So

streaming. So is love is People The the brand great. product great.

that lot a of think us. are just there's things helping that I So

In terms are players the from, where and question we of we those TV are streaming devices, successful. Roku of sell terms both have coming super in program, accounts your about

compare than we're in is new Roku that is becoming think mean now program are for As the had doing is then the internationally. well. accounts the as LG both systems. of were higher accounts us. share. we're U.S. time the We're Samsung And for the market #X international, well Amazon well of domestic of operating active TV But course, and important versus share it increasingly majority combined in sources in they and QX, XX% We We're Google, progressed, has important I accounts. active single-digit both to U.S. market U.S. And the share which and TV was streaming the platform you I market doing

of question? the So picture. big don't take know, kind if you to I that's the second want Steve,

Yes.

this second the Certainly, ARPU. U.S. ARPU by there U.S. that The a shift is in though U.S. the still in along from the even streaming, question terms far international. In it's market of to part in difference is early even days of on the to

markets Internationally, the engagement, the have And global started still although in to scale, we're many good efforts Channel. example of great up we so ad driven you additional ad U.S. because have XXXX, is And -- where business that monetizing. in engagement. case that our lighting built by also, really see scale Mexico markets and the focusing we've XXXX, Roku ARPU our notably we And on there. up driving introduced our a are the is statements we great started on sales

is ARPU lower its so on it And there ARPU. much there nature, progress the great a side, at by but on is

at story is sequentially, we environment. when the the But look the trend really, macroeconomic around

And some consumer hitting ARPU side business of also things. advertising pressures the and spending on the the of

the the scatter story into the But come in that play still subsequent, in does mix has although we've until periods So pullback in international starting here, mix mid-XXXX. that's ARPU coming into U.S. up we the that saw market play. gone prior or had and really we had

Laura our And of be Martin from question Needham. coming next will

one want to I be your out Anthony, you the going for it's guys bus. don't because mean. throw of Hey, to

competition your you just hardware manufacturers. So went into with

it And you when to for it got can't do to it that some independent upside competing hard do others. the substitute is, now Anthony, I'm television you like costly? monetary your the to things OS you the understand licensing to what so of operating TiVo a impact Is a, or hard? at what when those field And thought are they Does you're one are. revenue system, that understand, is they the you own I'd Is those own that I'd So that long currently Roku. how is said I exit which secondly, to your OS better like you because from time? can your of take for and statement of with looking you with people upsides know in another licensees. want you

question. the for Thanks

see. let's So

party first So Roku-branded TVs. the

picture if about here. big kind think I think I -- of the

TV I of coming from is all, mentioned account our the program. just of first growth is majority Roku So -- by our coming

QX, So the it's us it's in program In TV TV #X I XX% program said, than like and has combined. OS made a Roku super successful bigger Samsung U.S. the share LG the

OS became that Where TV Mexico Google now share about TV which the XX% in compare Roku #X single-digit to in Amazon, is OS recently just #X in with and have shares. the in Canada You QX, QX.

is So doing the program great.

launched to is it on the as drive Mustafa the strongly Mustafa our device and the portion the first pretty I'll to turn Roku-branded segments. market is program Roku business -- TVs. business, we the well our Roku-branded of it innovation In into additive of end overall terms over help that us program, which But the feel including program. higher call, TV who's we Roku as will just runs our moving and

-- so don't I so overall, good. it's And

new mean, switch about in need. at in this that franchise And I terms I it's of well, it then point. a would it to say, OS. before difficult, turn amount the Mustafa OS build impossible question scale is I your OEM very of how you for to over mean to another hard I TV to TV

is So mentioned me hard I right the that's necessary example. mean, and size then not for able the gain scale factor, the would to quite new entrant a that be that of of business difficult. course, and and now player brand. a needed you in significant that's TVOD, be the to big technology it's be imagine that's TVOD everything would And to in of for -- just Roku

are households, People new large device. on Roku for for rough sales go households accounts. I love existing go brand want devices of we've They number don't to and actually a years, mean people our another and streaming into that create working they been building a it's great brand it. our

lot entry point. So there's this a to barriers at of

turn So with that, the me to let more talk Roku it about branded over Mustafa to program. TV

some also Roku summarize to for historically, complement will on and will the Anthony. TV for us Roku of Yes, build licensing what innovation drive portion world and for are software sure. the TV focused want both really program. their the to We Roku further And our TVs the products and Not ultimately great that it Overall, partners after. has help That's TV and licensing hardware. consumers. consumers. we're successful

operating the design even to complete side, terms runs only complete combine we some these other our and help software with software purpose-built and to provide areas along -- TVs hardware brand we our In innovations the better reduce complete of the the we with really TV, actually now of not offer have the inside on system, a to innovations, the With expand local TV, along TV the we'll to display that a software, together and we provide but tightly to innovate hardware scope have chance chance to consumers. cost. TVs, including hardware

So leadership to for TVs enable product offering a Roku performance further market. we us to believe position the the TVs few spectrum of into edited us are They be the will by brands expand consumers. which our They overall to occupied will allow Brand higher-end will our today. grow in

go So us the capture and higher-end this will allow some in partners share market to segment. licensing really

are the to we to first the bring spring. excited consumers generation overall, So TVs in the

if adjacent look a other would that have TV, companies -- guess Anthony devices have this again. program. it's program look in you I both I -- mean to the Roku and is add industries common licensing This in at compare to if and first-party the I you third-party very programs other in just at for that

innovations example, at system, Microsoft or And at, surface Google the better makes and and of more well. as If laptops helps the that look and operating the those partners really out phones, it it to if results hardware licensing do of and you line roll drive tablets. brands innovations innovation makes for the And choice. Pixel this you more software, like, look Windows integration in consumers understand Phone our the say, Android and because gives as companies you

of The I have Thomas D.A. Forte next question Davison. is from

a branded second, high a priorities, first, and Roku's explain sales system and in then P&L hardware as margins growth can expansion. level including for operating your TVs Smart you Roku standpoint, talk a from your investment can with So about international rate, lower And at content, and sending TV. sold in Smart differences you you the OpEx

question about take I then can the about first the talk can after P&L Steve investment priorities and that.

for Currently, the works themselves. selling are program. terms P&L Tom, the TV TV -- Roku of our TVs in program, licensed with Yes. obviously, partners treatment the how the our we

And from is so P&L. inconsequential. small no OS revenue the P&L segment, or amount COGS now the revenue is Devices a licensing the sale licensing in that on but of really There on TV that's that's

what treated so And the the similarly get when think really players. you'll broken TVs, is of what -- they'll of you think branded to

have you'll there. you potentially some So revenue contra-revenue have

You'll profit the OpEx and have program COGS as and then the well. with expenses gross in associated that

like much And the players. we the it reason to we be and changed be added very three runs consistent organization align Devices, universe. presidents so when the other Player named made with segment part Mustafa some things the small That's the will change we that to of broader then devices we and the

terms the over you turn Charlie. and on when one content so I'll then to that. one of some ones of Thomas, about asked provide in color that was I'll investment, of areas And spending,

an just to and successful screen, platform just that. of their and highlight of So the forward, is million program I investing And opportunity on which and for promotions TV including is they the continue experience. talked do areas -- that we of households for call ours, will watch starting there's by at a Roku us, turning integration guess, Gidon screen XX one improving out and some to some is asset Roku Roku-branded we day is and our there's our we're about. The investing point, get we areas ads streaming TVs, big might One, the which push for home TV that every area which ad here we're I of our important ad there. super different about screen is TV differentiation platform. maybe starting with there TV in, key and of there us, talk home at a journey chance when things can lots our throughout home obviously,

area the best team. to us. So customer Related that's is that the for experience

in customer world-class, churn, but So it reduce experience simple. we've just compelling as It's -- we increase successful. improving we ways has there's a monetization. can one engagement, obviously, reasons I easy mean, have customer been -- -- entertaining make increase incredibly so been of still It's that our and it's ways experience the better

Internationally, So a continuing we're but in grow deeper there's think made about we're focused other which area especially. that's still mentioned lot regions a for year, is we're international, Mexico. focus that and expanding in new markets, the big us. We're progress. is we've area into of of on. going international the that doing to for a you an CBS big If also But and into #X regions, now focus I there's this Canada us We're we're in markets. -- in, those

that we're we every market in In growing fact, currently in internationally. participate share

So area I content I'll then about And talked guess that's let content. for us. and Charlie -- an

be before already us the heard Allegiance kind rom-com, because of probably Roku It's its film proud that's reach it's the our they about first feature good thank original create were share Channel. Actually, mention was by of on-demand to you. but Paris, show rev called foundation Premier Witherspoon swing, content of weird a Reese spend love #X Roku Meet reality and history and and value. charming it this and exclusivity which creative just content on premiered not reality, a advertisers for program seek really strongly launched most Well, that so viewers will clear, originals the But Me Channel, weekend, it to second because had the library. Zoë is only Roku It it. of a be I'd weekend. licensing. Saldaña or story. we in any continue produced the recent talk you've our fixed the And in the of its and this To we're and

best content for spend going offering do like of has quality. Roku of Actually, to to to I fixed heralded a UI again, say one investments while for we're we'll So we rev factors the mentioned in the be license, Award made from killed little that? Channel pleased have director and just the Originals the exclusivity industry Roku products engagement. television, create -- won use the as users Originals advertisers. Choice talk And are share major Gilt, following Gidon, cut bit to movie foundation Critic's the to and and in our Roku back our Anthony for for weeks you been and Gidon, writers our our drive about to award-winning grow Roku date want producers nominations yields success the to a are ability skills. few

Thanks, Yes. Charlie.

ago. taking States, homes for viewers them in the easy are XX% they today content want watch of than research it longer as streaming to proliferation and or growth are to As United the and help And the looking find finding football is news. the has driven choices start the decide streaming that -- need to with as entertainment what they on game you almost shown about Roku duty to the for they And our to broadband try mentioned have the platform. years original, in watch. But platform possible content, users already, we a the as of more a a largest more half couple of did they're really that the whether has make

by surface home the partner to So being authentic been viewers first contributed delightful from the and benefited many to of driven help customers really integrations the rows and new investing drive added engage to that unique rest them, we fastly, Channel tenant consumers the team And ability that our to Roku of navigate the we've in content ways organic in way faster X our UI to Roku platform. really help XX% across screen our has throughout these the a really has Channel with by and growing menu. engagement, in anchor the than This being really our year-on-year, by was XXXX growing platform. to that's and

space that The people first quickly content. jump was TV live helped Live into

discovery help well Dragon to to Sport watch. a content was a third with was for Watch, We content-first the second zone that And WEIRD. complemented of you find saw experiences these like The as Zone. What or the people with new House

content easier the And bringing it -- is, the the of new by to in content, the platform. Channel if the these on them be the to today, for again, making and our twice closer helping consumer channel it's rest fast service. as usage and we home as saw look fact, screen that menu the great menus of that And of engagement find you by accelerated has reach largest Roku driving by growing service and to the fast at

year. So journey excited that this we've it started this and accelerating looking to forward

coming our Tim of Nollen next And from is Macquarie. question

to back the using made third-party go wanted more platforms. you've about comments I to

happened and/or it I way your up onto the hasn't the quite doing ad something ago, to be for understand maybe I That You which automating a at the to market ago, DSPs acquired thought platform? one differently at the with now OneView, more lot be wonder reasons was of if time you other of going time I years years -- dataxu opening formerly we deliveries. works. what But DSPs independent buying to acquired largest to think dataxu, you're that you're X the or is if going the -- be about X

but sure jump does, he to if have add, you can anything I'm I'll he not Charlie, take that. Charlie in. if And

with us. helps it and cover deliver takes data to advantage day So a our our first-party built our building like integrates lots lot with now. built for did the used years is all acquisitions sources shopping It through It It's of other also our for targeting. world Roku out our been technology great and the of We we acquire several efforts platform data, It's a a with viewing that asset has platform program. we data of measurement, every ad ads. data, but ad combination of lots have, class. data, helps organic internal we own ACR

it's So helps best targeted in it and platform. existence. big and it's -- We effective ad very platform asset on streaming deliver ads marketers and probably the our this a think

to So be a focus for continues us. it still

We have, for to a of in opportunities there's increase -- we're relationships, in but to relationships at long terms time, expand DSPs expand that's worked our opportunity with capacities, looking will in demand. ways third-party there's what and that various

so at. what And we're that's looking

you Well, and So Sure. don't do want is just expansion. It's Charlie, relationship I not know, to it DSPs. Yes. about

week, Last the Connect. And Walmart Anthony's of we parts you tech this a put of Tim. stack world-class possible question of tech a some together the point, Wendy's with of partnership. partnerships have We that there, stack, announced the to is your result and makes the some DoorDash all terrific

So empowers with click-to-order it's platform Roku within offers in of TV do. unique a of Roku what streaming great first kind for its ad. can partnership their example DoorDash to the that It's a DoorDash, example, place merchants

Roku get while you're movie, So picture of hungry food and you're prove you and get movie your we're your and on an home, funnel dinner on watching watching food that see your your your movie. and from a and you Wendy's and and as and a delivered click we you DoorDash full ad it and

Roku. DoorDash time, with and first attribute partner the for to restaurant measure So on ads target, TV can streaming Roku advertisers

which accountable market with, truly attribution, media differentiating again, to funnel it's It's and truly media. accountable. first It's lower is Roku

behavior TV literally to screen. lead stack new tech in is Roku case, a teaching I So think taking this its because the interact consumer of here, with and how

Khajuria question Evercore. And coming of Shweta our from is next

how TVs. then Congrats have the Roku-branded you our I Steve, versus, from changed gross historically margins launching pre-COVID quarters gross is the TVs have call the follow-up segment on you've has purposes? is, TV line. think say, let's on over a guidance modeling it, guided. And philosophy we about how delivered those just guess I player on the past margin your the contribution second for through TVs in guess and But of the -- should of terms line. I you've how the Roku-branded the question couple in quarters,

acquisition. focused device haven't is But anything terms about of TVs, customer in we branded mean I In gross general, our Roku just disclosed business margins. on

profit gross on focused hardware. not from it's So

comes great obviously ad monetization and business for which content service is our Our distribution, obviously a us. from business,

like applies sorry, little bit well. to on the is philosophy program moving to well the the TV of terms guidance, I that in space. Steve, branded outlook? Roku TVs big just And said, more in innovation want as upmarket I'm the on about focus driving another TV then -- talk as a So you And as

the thanks quarters. over Hey, our of Sure. Yes. that couple I guidance question. philosophy the changed wouldn't for has last Shweta, say

impact that particular, on QX uncertainty environment, consumers just as as in of which, monetization. what's think is market, obviously, our level of since large I obviously year last advertising the has the the changed in portion the well macro and is a of

way spend their trying see our lot the then that. And we over and we what what near to better, better outlook you approach operating how like which of it's really largely corralling growth factor operations certainty and our that rate we levers so outlook find I a terms market don't is vertical companies, expense our and full which things can we're year more and like to stuff done macro-driven think at that color is of with think we which quarter and what we've or base the environment and around levers control the just the over and advertising in and of of the about the how driven through provide whether have amount versus around a we year-over-year looking macroeconomic that, control on

really we and at the how and in look really see timing that's what's it's out driven given world. think industry business the we broader I it, how the So by

follow is you from, it, Thanks, December year-over-year, Anthony. now Steve. it QX mid-February demand whether And up until or have sequentially for If could and/or up, trends that's call ad seen, I if Thanks, it could you Steve. on kind of me. comment what Okay, please that?

is Yes. off to I'll Charlie. turn kick and over This then Anthony. that it

platform, streaming. also process. moving X% streaming platform, but to And our it's hours were Roku that #X our Channel platform, year-over-year, traditional is the amount. grew scale go, that and look think, grew continue big I XX%. with by engagement Like Huge I the opportunity the XX% mean, hours XX long you Advertisers streaming the popular. before, are down but growing. streaming. and on in at said power in and to our but reflects streams picture, switching if TV I Still million hours of QX in got accounts an the moving ways of Mexico. and think in QX, to our streaming. moving is again, in to active streaming a definitely Viewers terms I fact U.S., incredible to industry alone platform are Canada year-over-year,

continuing opportunity build advertising, Charlie a -- think picture of But and give specifics of think big in I probably we our about macroeconomic color on macro there's lot advertising can for that’s you class lot and platform But ahead. issues. are we the there’s business. So a more to ad platform out if the world streaming a there's

overall Sure, certainly even ad But reported ad ad Roku in traditional thanks. The was market, fourth TV pretty well still that and quarter. outperformed spending.

Ad Roku verticals other as so to and including week, are moment momentum, pleased opportunities and shoppable building with mentioned, creating there the is publicly. is know, playing things I But we and are and little tech and with which and wellness a pretty you ago, doing M&E, So continues Roku last and out remain announced so muted as ads restaurants, and we're the new share. travel, is many some financial simply demand quarter spend ad great take among to improving others, we which last products as certainly, first Walmart CPG, platforms in all that services so of a address health year relationships, markets examples our diversify with mentioned I many can't. one both

how at markets now. So that's look I the right

coming Truist. Matthew is question from next Thornton our of And

there any very similar following sounds still that's follow-up, around branded helpful. that is customer there It delays the could. to Maybe think margins and will just to any drive north number need need the breakeven Anthony, XQ in color need if the think a then to in we to operate guys then right about we one close through we the think up prior like Is you cancellation about, Is and there are that as question about we to probably guess, I about Is activity video start-up about the commitments. acquisition. number? a would to XQ think that be talking billion costs to we On the 'XX? 'XX. And that right any as guess advertising, still follow-on there that there on TV. upfront 'XX I in updated start I think just $X strategy about? them of ramping be

to year, upfronts upfront do last I turn I'll that, say over have Charlie. just I But our been growing. and would a before had we great

grow streaming-first that is lot A the of streaming, you to expect it's still look bigger advertising if I business is the have I know advertising every our each historically, -- transition going going event, it's naturally being fronts streaming. advertising. most because moving and a continue to don't billion gotten And is a to streaming. If And TV TV that improving that, on upfront that's hasn’t our the moved of spent but it the to back There's, upfront. a business year. year $XX to

Charlie, big do So of our…? But the to about kind want talk you that's picture.

out Matt. Sure. It's anything the ordinary. We're of good not seeing a question,

it's noted, you As through fourth quarter third.

networks the on heavily the about fall in fourth into premieres new quarter to we're about the quarter sports. way think But others quarter of don't differently upfront rely Roku way do, front-load for timing fourth how upfront. So and perhaps is a traditional only X that just given our

has market but mentioned, challenged, life. some scatter some the momentum also verticals, of just we're seeing and side with So as been I

it. market way team, have than to X been less I'll versus So years for who XX-plus in has been best as to it years. it only upfront say Roku the for One about thing that's attributes think others this in the

So we're do unique it favor there's and a coming and going the with And runway I Roku are plans and all assets. upfront start scale excited world about soon, media is streaming, and and where believe ahead the market. that will its to day

you startup to et your add there. of branded terms I don't anything I of cetera. about TVs -- in costs, really In we specific asked the and terms think anything Matt, have mean,

in are expenses our of all mean, our outlook. I So

is coming from The of next Zangler Stephens. question Nicolas

in Focusing on streaming the hearing that M&E, as near-term an have pivoted late obviously, adopt EVOD many offering. of weakness to about services we're

now highly viewership still just to win very So opposed as incentivized subscription count. to hours

Just how in the you anticipate M&E versus this to maybe spend given midterm? in viewership become of priority? would frame dynamic, M&E this near-term this weakness point guess, some you Just hours longer-term strengthen just more your So do as up outlook? meaningfully at I a

so yes, over over off are us specifically that I services Nick, advertising answer future you're can this and We think Streaming that increasingly engagement, focused kick to your is be But term. not-too-distant turn Charlie. to revenue. I'll question then on drive Anthony. going to right. mean they the

affecting and to seeing streaming ad our in I to partners. growing have to mean, take The streaming step So and to spend we way and they that's that well, is -- important effective platform pull the if Roku Roku, on all is M&E us, you as the just in but on -- affecting And super back the we're spend is -- I is them to them, mean causing great pressure know But of scale of partners the big it's short just size is back, important business, think platform a and almost M&E of like huge. is service on our advertising ad them engagement about And our dollars. a our advertising market the businesses. marketing unmatched. term.

take And long maybe -- bullish on to do But think want you so do M&E. Charlie, that? I and I'm midterm there's term

Nick. Thanks, Yes.

shift that ad need deliver we nailed recovers, term, believe you the will focus absolutely they'll companies in industry because it think for your advertisers. their question. I engagement their to toward Longer M&E as own

impact and Roku's So on of I lab every the magnitude know my metrics. job, engagement first-hand streamers importance from

for decision on the It that about in emphasize it particularly we're to are growing doing and engagement. shared media this think is that Nick. M&E literally context for is a tools platform. goal the terrific believe the Again, nearly the that every of approaching the media Roku active So in Roku's Roku closest I'll scale. your M&E viewing dollar that highly media we effective viewer accounts streaming million and dollar XX question, makes, on spent all that you households, our

our our prove in can thing the on the collaborate with lift for fact, campaigns in media services on-platform using that's so group. that platform is this own bespoke did test effectiveness The more look, group. closely we movie, I XX% old did one media accountable. and And the unique to associated the we ads, Al than media with we out is holdout Story, And Yankovic a So and drove weird, we mentioned. And about versus with WEIRD: create we viewers streaming that of them great Roku

third-party Roku great. was enables much. Pay the So our partners. accountable. another That's industry than pretty premium That of streaming reasons own billing video obviously, then but up. less higher side, make side. like valuable then recent engagement they even services on on the in It's And using retention our a to cited other And from one-click tool easy the Pay, content study platforms. the subscription And experience Antenna. media by do Roku offer which sign are respects one there we Roku It's so things

flatters you're where so So they and right, list, particularly in moves focused engagement, and effectiveness movement Roku Roku efficiency. have this world on be priority toward to partner's the Again,

Great. No, that's great color.

streaming well. just large quick it's very service really seemingly And in Just streaming as on engagement very, follow-up on strategies. Roku, other one partake under of the some service it's that. these is one There doesn't that not

Just like would engage largest know thoughts there I to expect in on any don't just you full if well. the streaming services the as you absolute have including whether market

think That's every the large help businesses. help you uniquely and the to to your is impressions people Roku again, we but in acquisition, not to for streaming you drive partner, them and you just our watch need nailed going moment build help when of look, decision toward to and build Well, And we need build a viewer be it there's right And be at positioned as partners' you programming. how engagement, shift service there engagement. the of question, will will engagement.

I This -- I I Anthony. agree with just would mean that. is all an this is

or all engagement, positive in we ROI can believe have build very can't company the future. we don't might any a comment particular help -- what have our but we do We might streaming any basis, insight not on or partners on

question next from Morris coming be our Michael will And Guggenheim. of

your most acquisitions think First, in content content originals seen to past, is putting the have we've Quibi. you how more bigger made of content in acquiring and or mean I'm and/or capital curious with of something library would work to opposed some about guys I what notably, licensing. you forward Anthony a Charlie, going as

So how are you thinking something about acquiring bigger? potentially

then quarter. you number that come materially it probably I'm the you did And last what did higher could you kind like the can't far hoping a led that second maybe come just on ahead could by past as to top X% outperformed that us should beat we guidance. for it since the thinking be fourth understand in quarter? you think that Steve, in line. guidance this wouldn't your at quarter, help could so it your changed lot just of for help think in we quarter, you And first us Why in look we

just high level, have at say we would I mean Charlie Mike, about We're done doing I'll a in But very I take let question. cautious that content acquisition the acquisitions the acquisitions. past.

originals. also spend rev a high licensing and a do but -- on bar we of We money lot have primarily to content, share,

to don't have I money want ways we're spend Charlie, anything? around particular think most so a And know, do always I effectively. don't you acquisitions. But we to looking add strategy at that

has base really -- those really and And House to continue House. been advertising for I rev licensing. -- we to back Quibi And our then acquisition those we and of content I will library renewed food the This you're really commitment foundation and look some Old right, you're Kevin has acquired be us perform a creatively relationships. well, and has The in and spend content a City and shows Hart for interesting share coming having This accretive genres globally community Old to think our library home Well, But soon. he's the been continue series like led to at right.

with rights very much community them think and card, and because a we're on for advertising creative weird that do discipline. all going for the build realize community the cost. globally, we'll I But so fact, own for So high-class I calling they we the opportunistically to both distinct and the for at like right been instance, the it's product

the performance in pleased your with -- question quarter we're Yes. And a on ad in market I difficult against consumer QX, backdrop. pretty mean, and we're the second

shareholder the how give talked just we in through market the the ad our U.S. about letter, they to Just an in weakened quarter. you trends and idea,

market XX% ad X% December. year-over-year That's October in down U.S. X% decrease the and after So in decreased and November. was a

level our just our high shows and to expectation it's into the challenge and challenging directly when to on of uncertainty handle that both itself with hitting of that. those the at consumers trends. pressures time. all the giving best really macroeconomic then try you estimate that the So And give it is outlook, on But the the are certainly, to get a ad stats, market based we're

And results imperfect back other the has changed, we're wouldn't on we're philosophy have. kind around with captured But our in a question point say it expectations relative based I to hasn't. making again, outlook. So the pleased information time that initial of we our in guidance to call

outlook as it QX to how And and that's approached approaching how well. we our in so that's QX, we're

when decelerate in I right? your did you mean to to point, in in that guide because were like December? just a going difference, trying that big talked the Steve that you yet I'm trends in get at backward bit letter ads by just to handle understand be we're you saying gave because So you that, to it's XX% November, the looking first go about Or you the are relative tricky. thought on a million. meaningfully and proven December ahead. we're decelerate has the in to to a now $XX it you're trying and forecasting I'm to And quarter guiding revenue came guide in still

Yes.

the the saw with I the as -- ad included of you guide, kind were a as prepared in Charlie both mentioned couple the think QX we of how I in on market. in the well consumer some season different holiday we letter the side this in well for were -- things mean, language and and concerned of will this the there's concerned, remarks of our as in things

some of ecosystem. we different were out of we And parts lot concerns hearing from so were the there a

was And was companies, view that so reflected overall be season, a which it a in for lot holiday difficult that of to was. going it our

performed bright how For business hoped around us, some was had would TV than and is spots then we the ad be. it we better

into was QX, you stabilizing seem So a uptick, spots verticals type verticals overall a also in to of that be but you that's good, bright down bit you have though terms that potentially When pressured. of even see remain the certain shoot other look green some or on year-over-year. market then

M&E a and we of kind the -- challenge that's general, in And do that fact So part the that's outlook a reflects have. our business. of we have strong high-margin also business

well as top the down as translates viewpoint in and in EBITDA the line both well. that reflected that's into so how look as profit And gross

going turn closing concludes over question-and-answer This Anthony session. our for back to the call I'm to remarks.

commitment. for Thanks, I want to and also thank customers everyone, the our their joining partners call. employees, focus for and

Thank today's joining conference call. you all for

have everyone, and a disconnect, may evening. great You