Roku (ROKU) 27 Jul 232023 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Second Quarter 2023 Roku Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Grodd, conference Relations. Vice like speaker to now Conrad today, President would hand over the your I of Investor go ahead. Please

quarter President, today's Founder Media; Devices; and Thank to and President, Dan joined afternoon, Roku Good CFO. CEO; Consumer Q&A by XXXX Also and are our second Collier, on today Roku's you, President, I'm for earnings Gidon Mustafa Wood, and Anthony Experience. Ozgen, Jedda, Katz, call. call operator. Roku's welcome Charlie

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

Our continued forward-looking your only our thereafter. EBITDA reflect and full-year and to which or projections statements, this update about on today management's any commitment positive disclaim adjusted this On obligation to are events, regarding predictions, comments call improvements statements responses statements such to as we this and financial other of make views future for our we'll as outlook, information. questions call, XXXX

Our periodic our our statements. investments, actual expectations uncertainties. to materially information results macroeconomic letter on business forward-looking are risks and statements and and future factors on involve cause for our our our of impact based could assumptions refer These market these and our and headwinds expectations, regarding SEC forecasts industry. the filings from Please conditions current on shareholder and that differ to

most comparable measures discuss financial call. financial non-GAAP to measures GAAP certain also the provided today's We'll shareholder in on are letter. our Reconciliations

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

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

We once results revenue. and OS number QX selling again The the smart and delivered environment. Roku Roku Conrad. in engagement a Mexico. was States solid platform United challenging in one TV the OS scale, Thanks, grew economic

The HBO X% to reported X.X% is TV in U.S. viewing streaming. Nielsen of time, of Max. engagement Peacock May, was Roku and representing Channel total first This the For similar

platform owner entertainment to amount role available platform. as the leaning enormous content our into the of across find help Roku are We unique viewers the throughout

features guide, provides our a Menu relevant What Screen TV content as such to links Live Home location. and Our single to Watch that into aggregate Sports

user recent opportunities. we Roku new with As from the are opened presentation, from the unique Screen brands showcased more our ad well the At as movie. grow engagement Roku Menu, the platform. monetization promotions NewFronts units generate major that we City we that Home recent McDonald's as to Barbie to We've

incremental work and advertisers on verticals We up ramping have place our few key are to M&E partnered with with beyond revenue not home Roku DSPs and third-party to a screen, ads reducing the capture existing streams. while demand

positive a the achieving viewers, have built best-in-class EBITDA streaming to and we scale. advertisers, content to We lead continued and after full-year streaming remain owners. TV committed the platform with XXXX industry for And innovation with We services for improvements continue adjusted that.

it to Dan turn results. to discuss our I'll over Now

Thanks, in increases year-over-year. TV and pre-COVID player the sales price Overall, XX.X active Anthony. net unit We above were unit panel QX Smart our remain selling Sequential million in slight adds X% slightly TV sales and down up costs. globally. in U.S. adds average despite above ended was $X.X the of with freight net million XXXX. were the in accounts QX, Roku levels quarter

our X% TVs products. the CPG and and verticals, platform Roku pressured. Roku pay Roku increased net while TV year-over-year, the up launch revenue home by year-over-year streamed total year-over-year devices and wellness to QX branded technology the remain improved, including on year-over-year XX% hours million. million. Platform revenue XX%. of of in viewing spend and users and media $XXX billion while XX% QX, increased XX.X was and increase to an Ad XX% health entertainment In quarter, revenue hours $XXX fell smart traditional on driven

ARPU QX, active trailing revenue This account XX.XX basis, outpacing growth decline strong to was platform a global growth. X% XX-month was down on due year-over-year. In

per to of over the cut continue that U.S. rebounds expect the monetization We grow our account time, and will customers a as cord. as advertising larger percentage industry

profit rates year-over-year. ago. XX%, and gross gross net revenue Device negative X percentage points compared was margin the Platform caused margin from X% almost in year-over-year margins. gross was of market, increased reflects XX%, percentage percentage difference mix year-over-year to year-over-year by X greater a was $XXX total which year-over-year. in X QX QX, the profit down weakness In with million. growth up was which along of between ad point points scatter compression This M&E was XXXX away platform to year total

negative EBITDA better-than-expected our cash our ended quarter million in million, by was performance improvements Platform approximately was was our operating QX which The $X.X driven We and the profile. of segment expense cash. and above $XX with adjusted billion restricted $XX outlook.

$XXX quarter, in total anticipate million, profit adjusted and be and observed out expect XX% them margin the of we Looking QX negative played million. QX third up million $XX to EBITDA continue gross Gross to year. with Overall, we that the net will we revenue of in year-over-year. trends of X% $XXX throughout

some consumer uncertainty macro concern and While showing modest remain. growth, is spend

As some mentioned segment, earlier, see we with verticals. Platform recovery signals the certain in advertising do

further industry-wide fall is be limited which schedules. already expected However, by release M&E challenged pressured is spend, to

platform to QX levels. As be QX such, we margins below expect

QX expect we XX% device year improve last the low side, margins in negative negative to to from teens. On

improvement on OpEx growth anticipate and plan OpEx year-over-year, In below QX. ahead executing QX, forecasted to year-over-year growth line. We grew year-over-year time growth. achieving in rate fall are slow OpEx QX single-digit X% further our in our to of X% We

plan our positive revenue the XXXX. remain we efficiencies work full-year our growth, reaccelerate to improve adjusted to committed deliver Given for and EBITDA ongoing operational to

let's take Operator? that, questions. With

Our Group. comes Instructions] question Shyam Patil first you. Thank International Susquehanna [Operator with from

Your line is open.

the Hey, couple guys. of and Congrats quarter a outlook. on had I questions. nice

can bit revenue. your And guys for talk First for attracted most about few about you second, XQ been you a a Roku to what platform then you're You've little one excited you what outlook for and Can Dan. talk about? here months. more

seeing to scatter the thinking you're how and you're market any Thank you of and balance in M&E. XQ? on what then July And provide about the you. maybe additional color Specifically, able

Hi, question. Shyam. Thanks the for

spent XX entire in of user businesses, from And I years opportunity the the Roku the aware Roku went the in public. during of streaming As I Amazon and followed company well. the I I've streaming. a before and well am this progress advertising been And as TVs time at

really Roku's addition the in to Anthony's loving vision. I've In admired product, innovation

interesting where to what And leader. a We're Roku as particularly a is we're at company. me market makes

as business the our us in We scale at have significant Roku for and engagement excellent have we've is QX and opportunity the monetization been of in the huge, leverage and both in And the still is front shown and long-term engagement people incredible. results.

Roku. here be be So to have I'm excited here truly and the Anthony to I opportunity more be the team. couldn't honored entire with to at Roku

of was then, want about I the And part the second the do think, question, talk to outlook. about you Dan,

Yes.

take the uncertainty me that to – with the rest year. confident with verticals and We observed of and Let remains But the QX advertising. in well in trends business. solid advertise we delivered QX I'll – QX that. for expect overall, we results, our continue this we're and those positioned certain And in

and are we remarks, health prepared seeing and recovery including the in mentioned I wellness. in CPG verticals, As

remain M&E and challenged. tech However,

this a the and in be we the labor all our by of further from as ad expect historically arising industry-wide, release M&E just pressured reminder, challenged is strikes. highest-margin it half second year vertical. schedules the largest been to and current limited And It's

platform shifting, mix into And so is and forward. business ad categories, in share factored same And healthy the while confident various continue going that we spend. At remain we relatively time, and are in our our video outlook. consistent gain our we to across our margins

add, monetization continuing grow to This scale, is Anthony. engagement I'll just and we're opportunities. our

DSPs. million new ability viewers hours we find originating continue the year-over-year, And the across and to UI accounts City, ads. third-party also from discover extensions the nearly we the in added continue something demand our of content demonstrates we launch in Roku to example, ad for course, shoppable to from of Screen streaming sources watch. in new Menu new tools net strength Also, create example, which the grew X For to units, quarter, Home help unique XX% QX and

summarize and advertisers. streaming then serving just actually in and I'd And a by advertising saying opportunity cyclical. unchanged, owners long-term guess third at content There's viewers, see. center, The I let's the remains we're So part. is

I think to the question which was around M&E.

and So off let's it. that then over see it to I'll Charlie. turn kick so M&E,

So M&E, Media stands and for which Entertainment.

Let distribute me just platform. explain we're that. services I mean a about little streaming the bit content. lots and of one number We

we is and platform. UI that. we to roles do and bunch something all viewers find But the user-friendly a available services. are have helping which expose generally through there's on a is the that on of the and to content M&E very that's do find we way ways of services a integrated and biggest different help our watch way they're And one our One effective way content into content viewers different promotions, very across

And cycle platform, now. and scenario more to add Due – state positioned a that, for and invest good help promotions. promotions. subscribers, would we're in. engagement current cost-effective help with continue types it's we're the in, ad just think mean, uniquely drive we engagement as But best-in-class. our is of or streaming build these just we're M&E down right do industry-wide economy, a subscribers. M&E growing, share very and And I I is a at the we're help to say to trying to of to increase very way service, our the we M&E

view to who it. ads. more away So Charlie, as we're me core doing diversify M&E and it's to business, what our from let continuing talk a that But invest over we're something little in bit turn to it about can we to

Great. sneakiest-ever quarter Shyam. for congratulating Anthony for and the us question. Thank opening on and the Thanks three-part you,

I time tools, think we it performing deliver we highly enjoyed Roku actually M&E my because at I've great category. more have in great the And and ROI. best is a

share on in we're So good what M&E. I Anthony to that pressure, the at go down and M&E I spoke want some news verticals. mean, I side, about the versus it's the competition advertising in the out M&E industry-wide building still amidst point is before

and M&E, actually noted, ad is last have we the companies been the on over tech holding reported few broadly down by agency As telco weeks.

I year, all It's year Lord sorts HBO like launched in said, advertising thinking ago, time It as illustration Spinoff. but year. to of of this Max, an M&E that September Power of show. you're as now it Rings: The when its just But Rings this. was place TV feels less Game And about Of come is that's anything has its and Max for see reasons. than taken that back. Thrones; when launched in know the do Amazon of like the cyclical. last change marketplace But one obvious long a August all not Anthony will really going We of

difference Anthony a any what a ad some of we've reliant don't and this year so as focused makes. we've And coming, be vertical. We want But to been on seen on noted, diversification. single over

continue we new non-M&E diversify and sources M&E advertisers. to revenue and to ways to offer what placements new build were So typically-only

way few City potential. Barbie's the excited these it. it consumers and first So advertisers with into new Roku reach more remarkable and introduced We've advertisers I'm with a opportunities City has among several to at and spoke McDonald's, is broad great Roku connect last about And fronts with unique a Roku's for virtual the a Dreamhouse. world, integrate really weekend are recently, example. about we to actually new which just

double Roku needs love advertisers And The win. City it. a

we're expand positive and love just to share they because turns virtual we choose City, today, real to Roku's there more buzz streamers out And integrations, were than ways ad and many the love for from. unusually fact, capacity to some have In in brands it, looking Roku thoughtfully. it for Actually, seeing demand then neighborhood. in

looked Here today. couple I tweets are of a actually at earlier

also there Warner Barbie the City." the I integration, comments McDonald's, to the Barbie, Roku McDonald's about Barbie even to talk in quote. Dreamhouse Roku is here both to Mattel, dream other "Who then back about bringing a House and the "My quote. keeping City." are Regarding Walmart, the live in is advertisers permanently can from here's you And

these where diversification the Roku's on M&E now world Anthony opportunities. said, majority a represented So focused, as the we offerings. funnel had And of we're full of

by And So successes even see We we've up mentioned ads. shoppable We talked home the and Wendy's to a you'll this consumer DoorDash. all like auto, opened the screen last up team, more our little hear bit earnings continue call, advertising City, been Roku experience and verticals. you'll from restaurants. with team retail Gidon's side. to opening it We to like us about about

Roku diversify only in unique of products we're So opportunities few these are Roku scale. of a just examples continuing how ad categories to

important to to focus really for it's account management M&E are we growth acquisition something We're more we XX engagement decision I that do partners And account than churn million side, viewing homes. It's the and closest note M&E their will because on this, perfect the transfer the and partner think retention. and well. help too, for our from to

disproportionate So in Roku as to opportunities spend invest accountability, advertising, see partners for investment, best frankly, remains others and share M&E the and because our funnel full partners of marketing will continue I on believe, creativity, to ROI. place Roku M&E

Great. Thank you, guys.

you. Thank

Instructions] Thank our come you. Research. Karasyov And question [Operator with from next will Cannonball Vasily

Your line is open.

is Thank you the first about to all talk the that being now. strikes when We Wanted to the pretty I Hollywood. potential linear it's time to know TV think of much the with where much. what it happens. very ask you streaming right in impact the happens But

as about for Platform regard? the in the increase? stream, happen the segment, will you this will M&E stream. viewership what to library you. And please bracing you're revenue thinking I would distribution thoughts Thank of Will terms suffer? you're Channel you of the you're can expect what Roku the – happen in product within experience be likely preparing share, revenue result a appreciate then your also revenue what streams what for it So to of

Thanks, Vasily. that take Charlie will question.

Vasily. Thanks,

of in think of in fast on the pressure partners, course, equitable schedules do with on Dan his in I it the those our amount hope huge resolution. upcoming platform, your there second and and added As remarks, that AMPTP including fall puts reach To pause for of M&E guilds back I on And course, a both is a question content that pressure half. added should say there's here. our mentioned we prepared

no So viewers we reflected finding something numbers. and great in trouble that to are have our will watch, seeing

to take dollars in subscriptions, not distribution possibility? a subscriptions? will about bounties new have Do and promote you could many that the get because companies that half growth revenue? shows Is will think not a year. could So What in second the the you dampen hit marquee as of that

I'll Anthony. that. distribution. think much on take to impact don't is This be I there's going

that for Just bounties, as an subscribers do don't generally really rev get in category. and up new we billing signing aside, we shares

be So add know, I think business. I will on main the there. do anything least to our or... M&E impacts don't have we pressure additional Charlie, think some At you

Yes.

I right. think that's

they vary perhaps find what to But for much I and focused us, have want that's we tools watch, to think it on. we're very will service. by the viewers what

you. Thank

Thank you. JPMorgan. question next Carpenter And Cory our comes with from

Your line is open.

you. Hey. Thanks for the question. Dan, I had two for

First, you played out XQ trends XQ. mentioned in

expand you. the of down you relative point on the beyond hoping sequentially. the then And on secondly, anything be could just XQ trying outlook, upside there revenue to magnitude understand So what just to expect drove revenue to strikes? to guide. the XQ why better impact else your of you Thank Is the to

Yes.

First of all, again, from it's Cory. great you to hear

some we we rebounding saw – to as it see CPG strong did well the upside, revenue that platform some we we verticals. us beat very as drove drove verticals mentioned, revenue, was That ultimately the other in verticals specifically guidance. the as the for On that the QX mentioned, the business and that was that

So in And we it really challenged think to HX, we're the is outlook. going be due fall happy the continues half It's and outlook, be to be to strikes quite of it's challenging, respect further I challenged to to addressed with expect and but us. challenged – for what been back the the HX in with we it's it's that. do the M&E earlier

a which slightly growth into the that you factoring are on why QX we sequential basis. outlook, just rate is our essentially, down So see

level share, you seeing Charlie, to it's taking you was year on your give out. or can demand color last front I that And maybe if more know longer us to just one new you. numbers Okay. the sneak have fast. can play I expectations? process, – don't the could in you any But in of relative Great. you're terms to of since Thank

you're our done. Cory, Well question three asker. Sure. second,

different great everyone. making slower we're And is is than a upfront it the pace very Look, progress. in right, a at look, year it for usual. So you're proceeding

not broad and to we're with offer good And yet, absolutely advertisers audiences. You're We're Overall, more Roku the seeing due pacing right. to reach, powerful innovative our tools engage but well. retain the is our products. attract, ad news we're quite upfront done we engage

are there, So the all partners, methodically signs good and working we're through we but good market agency I our feel with where are. about

with has you Charlie XX know on which Cory, may this I – just thought upfronts, led I Anthony. cool. but was is learned pretty this,

Thanks, Anthony.

Needham. Thank next Laura comes Instructions] Our from you. [Operator Martin with question

is open. Your line

Hey there.

XX% it last has really line line costs Anthony and it, growth this R&D to before, the the growth. the quarter, was brunt down, it are control the R&D cost All you at But So cost the of okay? it negative did really X% is R&D XX% but line, excellent, was taken quarter fell X%.

launched that Can forward? actually now at that that a R&D going been number only is cost gotten international. the sustainable really we of the Or aided you've growth So slow – your just keep Roku-branded TVs? you've you've quarter? out And this it XX actually onetime is number

Anthony. the – TV the in premium initiatives, is we monetization which is still Thanks. world. about taking, ways find can active I Roku we one around I of – One And key initiatives accounts, two lot content. we R&D much that you Yes, billing the are subscriptions, I things talk things. help think don't would a have like investing think of the we're offices growth expanding say significantly expanding our well, we

Silicon obviously, other but offices have Manchester, and U.K. in Cambridge, teams in have we England, – we have great We places. Valley, in Taipei

lot just engineers. expensive things States United than to hiring that doing in have regions our we've been talent, but Silicon Valley great more the a of less the engineering of are one And so outside is doing

the R&D we're of engineers. one and that's controlling getting lots still of great ways So costs our

I Okay. will little and a full bit funnel. And this issue have then want second to question, on not three, is, push I my versus to CTV of

can So the year, Walmart benchmark both with year, to you substitute in $XX dose can funnel the and drive, a from went data into against This went to drive drive round the awareness, a before strategy were was for can linear go-to-market this you you come full XXXX which numbers XXXX. front linear which the us we a Shopify. into getting CPM as because we we CPMs Shoppable awareness to TV, pivoted upfront $XX the and had with so TV, new

is, the down question start $X My a CPM, you ARPU moving when and I down noticed with here is X%. you funnel, competing are start your

Does a My risk? question and the full comes that to that adding really TV your the Okay. $XX of lose harm do CPM are go-to-market is, than more benchmark to offering good repivot substitute? with it you offering, broadcast funnel

Charlie So to Dan that or I let answer add. me don't have I'll – We'll if might know see. and more

that slowed the are ad I ARPU still that's slowdown due been you accounts growing First in to down yet of all, strong. business, – we've mentioned by driven monetization mean been the active down. just has the fact

you again business when expect lower than the anything up I do that, number. start more just when math, indicates picking the think so ad back And I it you to it don't rebounds. get a ARPU and

engaging. we've of – and sound still And funnel, brand course, In Ads, ad. Ads, the Shoppable They're of we launched ads of things Shoppable like those have which allow lots are purchasing still sell I high-definition But very right mean, video. site inside advertisers. to of terms the full

might or the just different and sell factors. So or be of channel content the markets the we on or lots trying target customer expand or we're the depending I the different ads pricing there ad can to think to

revenue sources And tapping us, to So it's on want for I and we've think, long I different way all to there. do there's Charlie, add? out the think ad that but diversifying into are made a there. you progress that, go still all our about

television is And the motion, think shouldn't one can that or site just really as and that do And does powerful that's sound pivots No, so read into you we accountable. also is Roku the One what which be absolutely in I think is best, about other. right. reach. can thing broad we I

we I'm it's to help back a the be them and And so do full what the business in when side funnel, career because, talk about effective. advertising there is my you differentiator of look look, on

of noting funnel, helping be we we're way in And accountable build a so people that that at funnel the of by most and can't. the can bottom top great at the businesses the

want So during you time cable Roku we're the really lower obviously funnel. important also that What the average, on to at is top that's reach, prime we We the reach opposite you upfront. is saying a of them. message. and networks guarantee. then outreach I five look can And a made that And look can

right. serving And advertisers, of at ways the can Roku. all so monetize actually we taking absolutely Anthony but just is advantage We're the looking not

you. Thank

from Thank you. next our And comes Vikram Kesavabhotla with question Baird.

Your line is open.

I current you for you you're of takes might Thanks. making then expect from the we offer quarter based about if how and can on macro industry taking consideration? year And to trends, fourth the ask this wanted seeing should DSPs. fill evolve puts Thank any Yes. that be pricing you're just early I'm state And on and like on if I'm look and some third-party you and curious of to with curious what impacts you progress rates the here. can questions. about perspective that into the revenues and trends taking early separately, the talk

Hey, Vikram.

can talk fourth quarter about take the Dan So and then DSP revenue. Charlie question can

way, to question, seeing Thanks budgets. about And sales IO sell as more teams. believe these third-party multiple relationships by No incremental long-term the you Great. that channels. your through it. team We we're have doubt also we've enabled sales our direct potential. Look, And engaged is with recently, DSPs. actively ads the programmatically our know, DSP. often for a we There's question. through through through And

note, is it's I should a it And small So working. off base.

going So it's early but days, well. it's

really relationships And strong I budgets we doubt, getting no is these before. weren't have long-term getting So think we're that headline potential. now

we've the what we the our fourth report update – be guiding We're when not guide, will to just we do on see that say in our seen we'll half quarter third again, we've the into second guide QX. half the be similar We results. first guided our obviously to quarter the – update I results in what fourth expect we QX. we'll for in QX what for that you further to And Vikram, group quarter. second to guidance similar to the half factored QX. Yes, for

Thank you. Okay.

Thank you. [Operator have Justin KeyBanc. Patterson with from question Instructions] We a

Your line open. is

Great. Two, Thanks. if Good I afternoon. can.

how then First, I secondly, scatter love you just quarter. driving you the performing want scatter if this industry. mix, perhaps beyond called to out to uptick? would to touch on platform little one-timers out just gross promotions, you. margin. overall softer relative the just to hear And sequentially. is bit Thank That anything some again just were or was mention that market I up Curious Roku a there just

Hey, can and scatter. Dan Justin. take the Charlie part, talk first about can

Yes.

see slight uptick. uptick. did gross caused It a we platform which QX tough was QX, M&E, for had M&E was QX. it we some see improved With it we we for did quarter in very the mix, On and – QX, – to had – a margin from

Charlie? So HX, why tick as I said do some QX. in M&E. profit gross sequential from That to to we just QX change due pressured And is to which the see QX we in for down expect did slight prepared said, a we be expect remarks, M&E in positive platform

shoots and Dan wellness others few side, challenging health And hear, few and of repeated and and is CPG on telco, it's M&E, it us. a and mentioned a we've think you scatter are the really tech be times, story a it won't to Yes, surprised I showing thanks. categories. green

that again, are – to the early even TV look the have and seeing was overall to it us trends in tell used decline trends. just to tenure they benefiting and here, think marketplace. solution. growing, in linear say the as And was viewership We us now a us we're connected continuing that to and I So the are my people,

and roll scatter that we'll markets think more see out. the more as I So

Thank you.

question Thank Thornton you. from our And Matthew Securities. next with will come Truist

line open. Your is

for guess, question. – follow-up and Hey, I I'm some into sure one use Charlie good then of wondering for are a Charlie, for Maybe the afternoon Thanks I'm for to we're question guys. if analogy, it's around taking that quantify if lift the not Maybe we for old prior of or there. leaning inning Anthony the to maybe on one growth. a yet type either And demand. the at are a getting can kind revenue we where third-party you in baseball point first of point again, Dan.

further would any Just be color be there helpful. would

for ASP. they carry one the Dan, as about ramp, the a TVs devices then And we business as branded think higher Dan.

to So that will start become intensive. revenue

business And that how my the guys. get with line so that revenue you run could of TVs? margin you question how at theoretically is because Just about bigger around think next or will Thanks about get Can kind we single strategy devices? gross Do in time? think breakeven year? you're breakeven thinking to curious branded back low digits over

is And then add, This on margins. he else to about can has the DSPs. could and talk Anthony. device question anything then third-party I'll if answer in Charlie jump we

numbers third-party are for growth. strong DSPs. – relatively think, – obviously is out we're breaking base that mean, the The I numbers, relatively think we're but not I seeing I modest,

So we going there's think got if a take it's but Charlie? of little I it's know that. beyond can build. lot anything don't we potential, to say while a to

sure making that of not conscious cannibalistic. very we're it's think I

growing and plan. And our so think it's long-term we're additive see sure that business sure some just within us and actively is do doing I to of we're that want it make make you'd what

So, so far, good. so

you to have Dan, on thoughts any do want – devices.

the outlook home Obviously, the our On smart now, a different fact, the revenue to a of is, device along the different revenue and players, device question, Matt, with licensed amount the smaller that's a side TVs margin for TVs our right. first-party outlook will have And of right of first-party relative bulk in business. product.

again, longer-term you update far. the on early we'll we like see We more as go. It's so us margins, very strategy for we On days what first-party TVs. in

Buy. Best X X.X I ratings good getting extraordinarily all we're on think out we at at of models stars mentioned our

that. we small just love structure, right But So now. it's really the margin

showing So at the pricing. but team you update that more, are the up we'll of sell driving BOM these will Mustafa it's we and lot as And excellent financials. a And not course, market-based of more in cost for products. be,

revenue. you our So as we'll becomes a portion it of update more device bigger

return And this include just our channel not I customer everyone remind acquisition making – I we are business devices. I'll Anthony. of a does for money different segments model of us. a looking devices there that value – including is is mean, distribution. varies on much mean, the And spend factors, of how based the on at from and customers receive the we lot we

So talking year, profitable we we or a device business make don't because it's much us the so more to maximizing about we're as next and profitable. service general value the for businesses maximizing – but – rule, profit not don't try not

Instructions] Thank a you. from Nicholas Stephens. have with And [Operator Zangler question we

is Your line open.

Yes. Hey guys. What's upfront pace. proceeding slower at negotiations the a takeaway on

wondering implications would advertisers spend peel years, flexibility if true, could than naturally I the if upfront of market. is looking ad the which you prior for if in for push scatter Just you there think in that could heard there. wondering Roku? the dynamic frame commitments up And into you've back But more these just

Sure, take Charlie can that.

question, the for Thanks Sure. Nick.

products And really people advance. much they their are in the they look based XX cycle. of And frankly, upfront placing they get depending do they on uncertainty think in You it so, they varies what is in right, at down doing commit every in lock can the And on products scatter. of early money how businesses what can to year upfronts. value, and how the months of value

running business it's it July think the so as quarter, really I June by that an the and long fourth in has is reflects for So as in, healthy years. comes the pace what and issue in or it or says that, May not business it some

So well as is not demand, are The want. issue that down scatter down by it's long in running return as mix perhaps starts. can't lay I to because different flexibility. for think the as money to the the And decide instance, closer one the where for fourth think asking not much the – of order to it a in year money is market they lay you'll early this don't as hold and they're they people cycle earlier because a that they see seeing quarter, to need, there's there's inventory just get upfront flexibility what return uncertainty they upfront or certainly

table So that upfront. all would the on issues result not unusual these the The it's be at is a pace. during slower an

don't again, committing until running start But dollars October. that the you're

money So is our or coming participating whether comes I us for in us advertisers that more what people to stead we holds think have I solutions, the more and upfront good in like scatter. that about and trends

how that our Anthony, is is I guess business very would we market that build This in the traditionally mean well say – I add we – done I scatter just I initially. just would we've ad

we've this traditionally, see the season, in we'll but scatter. it's what happens been coming been So in – strong

right think a last come more perceived direct And if come point view year. in agnostic it that that market. the whether the via to whether don't come for dollars to necessarily the be as to upfront you scatter I But an through we in to Right. comes way or has in direct scatter. similar to then, is see number dynamic that I of scatter the mean, negative dollars if to were are ultimately kind

Charlie?

sure. Yes,

very think but that's positioned late pace right. Obviously, take impact I money. to pricing, we're well even

I more comes, as of the it's does a it. think good mix think of the upfront in change long at because and the money But as now That's sure, I way scatter discussion and getting a marketplace, every look simply right. that's pace. So to little

the does to for success gateway this merely Is for effectively you to a the strategy you, that then TV OEM. is Or a curious And program? guys might over you Roku-branded look look time take finally, a just this what do share just the like on on and aggressively so become potentially it. through complementary price TV and Roku strategy, consumer? TV Got market maybe leading

this Just thoughts you. on overall strategy? Thank

detail. more I'll This can is answer the and initial give add Mustafa Anthony. then

broadband taken our we've led the think Roku-branded part Roku or building accounts. well at, efforts TVs. OEM are distribute we the and scenario a and TVs, it In and just going in And in our our States United device extremely are the TV with active all built around we we're always number And into device that good operating in of just streaming into branded of you to been other device we watch all compared using program as partners the specifically So resulted becoming about a for distribute it – approaching television. one and that's that mobile one efforts beginning TVs team built aggregate, I and like half them platform. system of operating designed to TVs basically device own work the in purpose-built a ways. players U.S., by of – an all all built regions. for various then we also, Mexico systems of that that ground our – to lot that from system in operating from mean our the we We're households We now TV. We've that's have our competitors Roku number our that imported the TVs. doing streaming the well said, the licensed specifically, built

see to the the of add and We different us. program mean, about that very tens And purposes, going by is to talk to we program – active it we largest license or TV, of then talk Mustafa the Roku year is we demise accounts. ways players. don't mix with new example, players platform the increase overall about of of has I people we it's been millions add the When a let sell some that. accounts successful now different reach for So few well, license of And new, that's that something for way important consumer branded TVs existing most players, a OEMs comes And far, where of our the kinds the I'll and got that. still that. are it's program, accounts. the part engagement

learnings we Roku the us, Nicholas. to investments also we the partners. our innovations they’re we that strengthen Hi, further and for And the for that strong the had here. really ecosystem And a TVs are demonstration Again, brand choice with the announced expanding we you the consumers. and Mustafa for that question. local itself, making. about TV our also before Thank innovations commitment sharing are Yes. of are additional our

overall Roku of TV So licensing strength it's the about ecosystem program. the growing and the

we reviews. launched actually, these products days in showing really And TVs early build that great mentioned, are as press good Dan actually recently mid-March, although get can that we can

although extent, For Tom's the program. a Roku some reality, reviews in Best is offering competitive that are the as shows build actually TV It's Again, this but contribute customer a but we to build series shared third-party Value going our to great. Roku whatever we instance, won Guide to program press it we Plus Best for Not TV. award can ecosystem, product, well. were Value only the also completely review, to TV licensing the

Anthony our Roku our we and TV TVs contribute Dan which is and They mentioned, emphasize, program. is are models Roku a out we distribute just that the least to that which Roku the retailer brand And partners branded way are TVs. can we as that to the of said, platform, through who great all TV Again, as players. the on Buy, selling products Roku good licensing received complement is, again, a rating, way at build primary star XX X great streaming our at really to indication exclusive star Best for X.X

So that's how we see the mix going forward.

Anthony. is Yes. This

to driving to helps after licensing primary but Roku-branded they're us gaps to that licensing innovation, which demand to program, program. maybe our just our in demand through the not on if incremental not and allows platform filling way that – think, that. add, I partners also to I'll go partners it, our are think is going fill distribute I it incremental see us through The we'll the or – that pass we it TV that, primary program, covers addressing way our we're

guys. Thanks Great.

Thank you.

question Walthall Research next comes with from Our Company. Ross Cleveland

Your line is open.

the on could had feedback partnership. the success getting share I or initial new Thanks And stories from guys generally? if curious, Shopify the just What's that? for learnings you're early of on Shoppable question. that a any Ads question you the

Charlie. Sure,

by note screen the TV really our all accessible We're the sizes, partnership Ross. excited about upfront Thanks, Shopify goal Sure. should of the is make not businesses to businesses. largest I just that

its first viewers with of their And ability products TV shoppable from merchants provides ads. so the from using partnership kind Shopify directly Roku seamlessly this to purchase Shopify

check your just okay literally, with you automatically So out remote, Roku on you click Pay.

hits merchant the confirmation that And really easy. It an from order inbox. your Shopify is

a which have partners. Olly signed Classic, wellness brand, brand about apparel and So Ergatta a initial game-based is the connected you asked men's couple partners, of True as on rower all

the point, how they is something terms TV like in do. But do it's of Now screen, this consumer, days the excited your on phones. shop just early Roku teaching uniquely positioned and that their is is still to about to to on

point positive seeing ad for and signs So this new format, a we're for the it's purchase consumer. new

lot So I news ahead. think good a of there's

Thanks, about margin being pressure the the Charlie. the know And I of guidance point discussion a then one in business. part earlier M&E margins. of little platform follow-up on QX bit for

longer the business? term, what margins? back recovery you to back high are if get M&E you that to like Thanks. meaningful order step get require the Does avenues to back think there can and Or Just that see XXs do need there? to in in other

talk and to kick maybe off Dan turn I'll Anthony. to over that is it This about.

are I the related think mix. the margins to primarily

the less to think two reduction the ad our address so partners. which That's And there's related is is M&E, point is I M&E demand slowdown From right M&E completely will of with related strikes. One there's ways. that margin. I cyclical. two my down, higher that. view, the the also impacting there's in And now think of It's business the things to

again. M&E see making and build that used We're our And so I change back those part we'll effective. pick up will them in think out also promotions by M&E and features even the of to it as are platform and continuing sold more things promotions

saw – just going I already but engagement it's a way I effective from services, mean, making partner to very better. a we're think it lot get drive I to making so And better and it better. subscriptions

there's a And experience, And units is, and units ad inventory then the other said, M&E ad part mostly experience. the – like to talked Roku user sell to. of mostly is where the the and Charlie static zone, we we Like, the it of that lot example, our expand sports and user ads type advertisers McDonald's those the opportunities City. we T-Mobile of in sponsor had for about

other expanding we as there's the client well. base relevant – we're that so brand advertisers to And ads those brand sell

to today think long call all what that's you I would going So add. increase the don't Dan, sales want of And then I we if know, to term over M&E.

is, ad think we I add The earlier our margins only I categories. platform that strong all I'd stated seeing across thing are

to And And a there So start mix is impact. also also, point, are at some have expect margins. we do has M&E things like we margin. diversifying higher City and a again. to higher Roku And recover yes, M&E disproportionately

to So our margins outside grow well. as there opportunities are of M&E

Congrats on guys. Thanks the quarter.

you. Thank

Thank you.

We have a question Oppenheimer. Jason from from Helfstein

is line open. Your

Hey. Two questions.

choice using interesting an was growth. of words modest describe platform there to First, XX%

integrations with that's if DSPs modest, Are about one. doing So you can you how integrations, you're then Charlie, or normal? demand? So talk what's DSPs And second, supporting direct that's SSP third-party both?

know. adjectives. don't I dissecting see, Let's good [adjectives]. our with What's... you're Dan,

we're was QX is it our results. say happy when one That with questions I we don't probably it's will the of very Yes. had. most difficult said say know modest. I'd I modest. I've

is talked about monetization I we runway guidance what's go it. there to And an on front. our little original on think back I why I from the ahead comments of standpoint and driving much Roku came and opportunity my a us bit to how

And ahead when will So a of outside a rate have again, growth choose QX. of we'll we double-digit explain of us lot our grow. runway that, say, we to better maybe I just adjectives for

And them. working think I better. Yes. – mean, make stack. ad and getting without levels. ways And mean, I we more we've you're into success. the on would drive have I for have On active DSPs much to more a third-party tech lot that well continue to We as a ad that would time tech choose there's work as, And with in technical say the direct them DSPs integration details, at going own just DSPs, of characterize that I that obviously, levers we DSPs, multiple we're we with with our had I stack to long into versus integrate for way then is we now how the

to if anything? want Charlie, So you I don't know, add

first XXX% we it's person word to that. levers appreciate anything to And wish that I But all, the right. of transact. meet secondly, it. in with asked that's lean where the think advertisers first in modest Well, the I they to on media be as

of stack So ways we new team proud in our that right the Anthony is the on tech market account of builds is that signs to and it. accounts showing remarkably coming tech we're growth. stack, And and then are new

work to – in DSPs it still it So and ways different working honest, is with but through our is manual, a sales described. the third-party be of way lot teams Anthony are and we

Thank you.

come you. Ralph Blair. Thank from last And our Schackart will question with William

Your line is open.

Great. Thanks for squeezing me in.

quarter. talk little platform can the progressed the Just the a of kind revenue a the to of it growth bit. Maybe linearity going about back as ad you macro question

one So out did how through for me. start up did versus the you Just Thanks. quarter? how end

will Yes. that. Dan take

within verticals. quarter the guess guess, we say the that we that would have would outside those the in I quarter. that was we throughout that in There's improvement any – I the of say nothing pacing we has that haven't consistent trends quarter. transpired. And saw those – I did Yes. I really, normal changed see that

an that much to add beyond from So standpoint. intra-quarter really not

Thank Okay. you.

were But they say. modest changes I would

for over remarks. any to back I to now closing conference Thank like would the you. turn Anthony Wood

to customers, and and our Thanks advertisers. the content for employees, everyone partners thanks to joining call,

for conference today's you participating. call. Thank concludes This