Roku (ROKU) 1 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Roku Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Conrad Grodd, Vice President of Investor Relations. Please go ahead.

operator. you, Thank welcome and Third XXXX Quarter Good to Call. Earnings afternoon, Roku's Roku's by CEO; today joined Founder Anthony CFO. I'm our Wood, and Jedda, and Dan Roku call Charlie President, today's Q&A Media; President, Devices. on Ozgen, and Also Mustafa for Collier, are

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

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

market to environment involve and assumptions shareholder and differ statements Our uncertainties. expectations, our results forward-looking actual refer and and periodic materially on could filings investments risk macro from to Please statements. These our current these uncertainties. future factors based are that for cause forecasts our SEC letter risks and conditions

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

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

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

Thanks, Conrad.

a Paramount+, Nielsen. acceleration grew Max streaming an with are with scale to accounts, time with Channel basis, the shift the on as XX and of strong the to first hours We a million app the billion remains XX-month strong We executing drove active XXX to and quarter. according our well delivered net We Peacock for comparable engagement TV previous trailing streaming a continues X.X Roku quarter. adds engagement from and streaming surpassing top

up reflecting advertising. On XX% the contribution distribution content video side, revenue strong and from year-over-year, was platform monetization

ad partners. demand are into tap now programmatic XX sources with more We than continue and to new integrated

QX ads Experience. introduced in devices the this League-branded and Sports expanded demand the app Roku we automated Roku Spotify we NFL, marquee the the through platform grew Spend our launched video meaningfully partnerships in third-party in Roku with sources zone we Spotify, the first on brands With and on with year-over-year, quarter.

in in growth September, We additional reduction top year-over-year line of make cost select content. rate. and that our workforce us facilities to removal million other our with $XX reducing deliver In QX. included reductions, OpEx measures we adjusted and of enabled progress continue our EBITDA announced and measures office These to along the a growth, strong of

for that. for expect to we EBITDA with forward, year will adjusted improvements XXXX, adjusted commitment investment growth positive our EBITDA we balance Going the after full continued and

growing With on ongoing providing and recoveries. and as scale our the we positioned relentless ad experience best market well TV are innovation, focus the engagement, streaming

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

per the X.X up remain in grew Roku, TV pay focus above up price the XX.X while Player year-over-year. Roku XX.X of XX%. day quarter was account content player driven year-over-year selling by traditional revenue were $XXX both pre-COVID Anthony. quarter, million of fell users Thanks, to streamed faster increased . In than spend. QX, industry. Roku consumer distribution X.X smart $XXX million by billion up viewing advertising, Platform total active was entertainment accounts driven sales active of year-over-year, value U.S. million year-over-year adds on and net offset year-over-year. the by globally, XX% promotional media video and hours X% hours hours increase XX% TV a per revenue ended the an overall Roku year-over-year lower to benefited and accelerated XX% Overall, million. sales unit We Trading in up year-over-year. net unit QX, which on average XX% with levels the in up that X% significantly Sequential quarter-over-quarter. was

QX Content with revenue along SVOD overall recent our deals. Similar grew price ] increases adjustment forecasts from than to benefited and benefited distribution from gross sign-ups distribution partners. in platform revenue subscription increased platform a [ XXX XXXX, of changes activities from from content also positive faster profit

driven QX Devices the time products. TVs by last the of year. quarter-over-quarter but QX, trailing revenue home was launch increased $XX Roku-branded In down smart X% on year-over-year a of QX since XX% up and first year-over-year our ARPU basis, approximately for XX-month

industry. ad to We periods expect recovery in from benefit ARPU a in future the

In up QX, year-over-year. X% gross $XXX million, profit was

the impairment year-over-year. million of and driven up to by Platform $XX charges, from sequentially, down impairment removal the gross Roku points was a charge was related licensed and restructuring content XX% gross primarily the Channel. X produced Excluding margin profit XX%, select

been charge, sequentially. impairment would have increase was was the up X XX Devices XX%, points negative platform gross X%, sequentially. point margin nearly a which margin Excluding

reduce EBITDA $X adjusted was and along ended September better-than-expected we positive our restricted Free over growth growth, QX OpEx line top in cash. reductions $XX with with measures for cash QX by strong was and cash million. further announced in The positive quarter year-over-year billion performance was $XXX flow we million, driven rate. the and to cost

Looking revenue million. $XXX XX%, to of positive of EBITDA margin year-over-year, the profit gross of $XXX adjusted million fourth up quarter, and XX% gross $XX of we anticipate million, with total net

QX QX, growth in segment, to in Within rate in rebound we similar. had of the Platform video we ads video ads and be year-over-year a expect solid

wellness uncertain macro verticals cautious improve, while financial Ad an remain like and CPG services remain and environment M&E health verticals like we and However, ad an continue uneven recovery. to challenged. and amid market

seasonal in of year-over-year face device the rate growth down platform historical growth point we the year-over-year both M&E, challenge revenue Additionally, We difficult will point in and line we in decrease in content to the and Devices but comparisons expect anticipate distribution year-over-year segment, which QX. with sequential Within be rate to trends teens. will up increase be the margins sequentially, year-over-year. low

to other reminder, calendar quarters. relative QX quarter heavier resulting promotional period in the in As traditionally a margins device in the a lower is retail

from approximately XX% last significant of growth of OpEx QX anticipate the growth in to OpEx. year-over-year in Turning We year. mid-teens, year-over-year QX negative a improvement

cash will continue over flow to to our defend with positive We a driving time. discipline operate with free focus margins business on

achieving we positive committed for improvements full after with continued that. year Additionally, XXXX to EBITDA remain adjusted

We our will scale, with to monetization. expand this and engagement commitment balance further investments

that, take Operator? let's With questions.

Instructions] [Operator JPMorgan. of Cory question Carpenter line will the from Our with come first

you Hoping events various geopolitical for you'd could call go cross XQ Dan, into And your maybe on trends together from tie you bit deeper scatter just would you M&E a anything the kind got impact how just guide. across Charlie, the different of XQ? specifically those to if into all in it in then, that currents out upfronts seeing maybe you're markets. you,

This Cory, Anthony. is thanks.

take question, that the Dan, part. Charlie will that first So second of part yes, and

Thanks, quarter. in linear Anthony. We year-on-year saw I'll in second a in from market and into video start ad third the continued in of growth market rebound advertising advertising quarter, overall Roku the third U.S. quarter And on actually ad the the second quarter. outperformed video

rebound the So on uncertain market environment optimistic the about our macro recovery advertising while uneven we're by remain and in category. ad cautious ongoing video the about platform, we

if M&E not well, for and categories growing to services Cory, financial are limited theatrical you And mentioned a schedules labor healthy Cup in I Actually, expect there of that you quite of included fall and instance, M&E, the course, insurance full And CPG because and like more. schedule fourth and health as some World strikes. be further are but pressured quickly. remember, by, recovering seasonal are wellness and there last challenging release and quarter still are the year, and doing comps

third executing ads similar really mentioned, I'd do in I third. rebound ads solid we're a fully want of quarter. growth And ups trend of the and I be are Dan, to well, in -- you wise, say in expect solid and So to? year-on-year sort to rate video we the though there quarter had video fourth downs

the Yes. for question. Cory, thanks

the a Let QX. cautious me to the very uncertain that Yes, similar environment, impacts QX. in for that macro just to ads we QX just you remain the Charlie recovery. and video in And QX, in in from the sequential market growth had how rebound And a did what We Charlie we also and said, solid that's do said harder to be very as video the guide. QX We does content ads rate tie change do expect, into year-over-year a also said I it growth face comp in into distribution activities. rate in want comparison we to our guide. that our that difficult year-over-year QX strong growth rate QX. content challenge M&E. factored and gets ad uneven add do distribution have That

than look QX at so sequential slower is growing that XXXX, XXXX comp. basis, this And some QX harder of when a you from

of is And it some timing.

of XXXX see to change look a year to If our our you sequential XXXX. this of compared X-point year, of second HX to HX the half in last HX you'll relative compared to HX relative at

expect with an guide. to year-over-year -- for also by the that that's EBITDA I'll positive in just and the gross outlook decrease in a end we demonstrate So adjusted leverage what's further business profit our and And increase playing OpEx, into double-digit double-digit driving while saying for that's year-on-year our in calls outlook QX.

if meeting adjusted Anthony. improvements wrap about year after just with feel that to just that, could the And also achieving this EBITDA to our XXXX. is business full about also in good Cory, -- targets. invest for I'll I continuing add I'll while I positive our just continued good it. commitment feel I obviously, those

us right now. are things So for good . looking

Nathanson with comes MoffettNathanson. question next Our the Michael of line from

on X as think previously? what's Prime how that you entering Video in for XX% Charlie, think Can terms enter for more the I do your as noted advertising? Roku then ecosystem? means it One of you'll Amazon year-over-year. for a you. And you focus Channel bit ads. then the talk changed the versus for competition on press you any have And Prime we'll it What is secondly, you in hit watch broadly they is, market Video program up you release, about

rest and don't is can about question this competitors, Charlie of video start and Michael, expand with Anthony. the then question. ads the on Why your we

streaming to the position including into on So a to founded be going belief in. all a streamed. happen long say, well is that We way Roku I And leading market platform. but advertising to seeing would get go. of TV great obviously that be just the first still we're It's TV there's dynamics lot. we're about all, asked a transition, We I -- that

is knows, It's U.S., business. Traditional a probably going streaming, and everyone $XX TV be multiple as the year to going to all in a to there's billion move ads winners.

engagement, ecosystem. in before, scale to significant That us tremendously said has scale, a first-party obviously of half be products. important platform data, like in And for everyone ad our involved households. platform the unique in broadband makes U.S., approaching the we Our is

represents and passed Paramount+, talk top all comparable which platform Channel, apps Peacock it's to XX but hours Roku in billion on nearly is us. The Max. not app the TV of will across just streaming for great X% engagement a Charlie September, which and milestone streaming about, XXX on of like Our Roku streaming hours, a more our everywhere,

a position. in So we're great

a ecosystem. is that to There's And of our growth just advertisers We're pay part is macro going strong big the the lot -- of but one our our is impacting to important We're that about continues that environment, how and growth. ad -- dollars in specifically, the of And of if I which traditional a one terms move the is streaming. TV well. fast all a then think from to we've TV now. in would one, are couple before everyone video business, be be is of the most traditional factor important to ecosystem move impacting that's the -- And well, a right which factors the the are streaming. macro just second mentioned executing most still

ads as like of creating think benefit traditionally moving start I their does have and to ads, add interest streaming. that And advertisers in services services the ad-free more it were of -- to

Channel, for benefit think the Roku have streaming traditionally you In on which levels ads thought to ads, I have, in in that I us. maybe trade-off playing think minds don't Channel already another popular make it believe most going other it's think positive then services the is advertising that ad a about business, services don't supported. engagement they about people streaming services And that's to enter are field Roku the add the Channel. Roku the viewers' if as as to So like I words, increase the

thoughts. then, those you to thoughts? are high-level And a want few your Charlie, So add do

mix of a to And curated that But prioritize summarize done strategy, proud the there, the Yes. that driving love on a are Michael. to spend Thanks and on our and efficient for original content focus the we for bringing originals third-party of question, foundation content. part we've feel really the the UI and the our Channel, content, Look, is is of I'm curation content for we Anthony. what is viewers Roku watch to that channels right and mix sort Thanks, really Michael, about through continue and grow. customers the good Roku's of our team across Roku's Channel, service lot to our Really, and of Roku opportunities impact licensed are unique or key advantages. fast you, of content efforts. license of content

hours The as growth and position has year-on-year. than first program great in numbers Channel is I that proved have I XX% Probably, coming the powerful. even say, platform powerful streaming the we Our when is content our working extremely grown anticipated well. spoke. overall, we and mix more Roku engagement would the And

and And library, frequently so and serious about managing we're led, places very did other AMC tweak just we I've at the like it. I

and and us Roku the process fact, mix benefit content engagement fast that even of review the best categories helped focused that mentioned, have offerings is performance across the channels the to ahead And and the and possible all we of content and license, so That's often see to In sports continued and audiences. growth do Channel's we adjust I growing key originals. including ensure the to the in that consistently, direct has starting budget as content job, the viewers grow with experiences. simply

traction. that the And noticed within in. NFL launched mirrored and premiered September. in zone our fast channels, our they're grow, to Zone We in pick gaining have Draft, Originals and and linear the continued partnership Fans NFL channels, is fast XXX-plus sports the that NFL Roku

to I a side with that, think partnership sitting sponsored clip and access were Draft in saw with the NFL NFL provided you if by insider that NFL call. waiting you the our Applebee's expanded the just partnership. side on

stuff Beast working popular did most innovative And we of like with Mr. launched the then the creators. we X fast channel YouTube

was real I million accretive, audience that both an strategic has XXX has it loved, like think something and well. he And launch subscribers. that and it was our YouTube exclusive and performed

growth So and we're Michael, strategy, see on ahead.

Roku release content Channel, pleased new I'm our new and team to continue will We process the and our with and and partnerships on progress. the

but watch Roku everyone, Roku's of lot out Channel model, an number this important just of big strategic of And is think maybe I'll is people which a not Anthony which that that component advantage again. I Maybe point business a our use platform is people television. large to understand with that a

households approaching So see the UI the they that United the user the turn interface. half States, Roku when they TV, broadband is their in on

viewers. deciding we our the when promote to we to they're what use content, recommend -- Channel And but to interface so sure all is use is Roku content that that recommend the way Channel in make in of Roku use insert kinds content we we user help also and that watch. to it one to our that's in content to Obviously, recommend it we

position order Roku a competitive viewer it and than allows grow And and is big with the of order -- budgets reach kind reach. much so engagement scale sort in Channel that smaller have in in similar of that have the that to other journey to companies scale to achieve advantage, in spend us to the content that

model. business our in advantage competitive big a it's so And

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

questions. Two

you help One, for agency think letter. no how I what with you expectations. the further give DSP desks? Just fully of called second much go just major upside, of the -- guidance? XX can plan investors understand kind DSPs Sorry, with XX what's there help kind and in was out trading would your maybe Like philosophically, echo. us an over deployed company Even integrations? the philosophy you does reasonable to just I set question, Dan, range? downside And numbers, a if then inning. us that better think Are

DSPs, talk but into and great making our Charlie But with progress tapping . sort more. still Anthony. about source. in is it I'll that there demand early journey We're this third-party Jason, of it's let

Jason. Thanks,

full early both spend answer with we're small, partners, and over them and question, meaningful grew meaningfully also programmatic the been allows demand to not partners. quarter. breadth transact. us we're capabilities, a has also is -- third-party that's to on allowed third-party markets the And spending as supply wish We of demonstrate to DSPs an efforts We to success XX no to We're Roku a diversify spectrum has the successful. and year-over-year flexible noted, big partner you we're concerted third-party a Roku's investment our ways effort platform be really to in really to broadened relationships in and and third-party there sources where with A with seeing the power how us do automated scale to but also And DSPs. multiple in through serve. demand and with of are just our marketers directly it matter obviously full transacted. lot third your -- with meet seeing across they Roku it It that we and us, demand of

So of we're has are growing revenue, productive partner's beyond Anthony results And terrific, most good days. the as the strategy. still early news supplier the impressions. of the often feedback called prove is initial these CTV said, and And our the been benefits just

overall that as Overall, I as market are challenges continue no programmatic all faces positive. marketplaces, should to and of results insurance categories. other should continues back kinds categories not the embrace several macro partners other as say including The robustly of third-party the there's our silver same like bullet. though, be

Roku of businesses original sort will Much important. but this up every want to both say deliver diversification unique and ACR many pricing set elements along which distinction few diversity I the value our to best do this one quarter, only Roku. scale note, to our to unique of and it's on options on unique others specialized I of We client of And UI, allows and of then build through can accessible remain hand these that demand ad client ways manage our their other. the first of the the and it's the continue features at party of to with data, offer, work programming prove sort that and us by to I the a mean, Roku. market-facing product products,

the we about strong We I the quarter than what saw little guidance. the that in cost of when content opportunity said that X-K better have we ads well. Jason, very we obviously, issued And and performed that I'll was even September. we We second in savings. question did a operating as take reason earlier. talked September about talked our to go we adjustment XXX had far great early on letter had for part we our in the And a on video that QX revenue. deeper distribution a a

QX. a in lot And resulted of that to in so played what

more And running ad guidance. That guidance quarter on when dates. to of the the challenging. is and We're a is that best best It's create our does that. a distribution a We lot the to start market think variability closer ads is less Content the we've we good give ad view slightly we got variable. forecast activities the that. handle give air predictable. at have doing But within seasonal uneven very the recovery. some A to of going forward, are market quarter. It's

We So that overly at our is -- wouldn't give time conservative. give what for view aggressive. range it's best we like call. believe We say the reason. I this a It's it's overly we give not a don't not

the from comes with question line Shweta next of ISI. Khajuria Our Evercore

QX? on color you this to the your some to if drove overall a out You impact from saw question on what provide just that something to, sentiment was brand And of was to out war. you just specifically? pointed the my Anything saw. a things that macro. anything acceleration in and ads anything did please you other call There or you letter, can point now that couple the right but of net the that it in couple are next Could want advertising quarter, that call onetime platforms or Israel is trends specific you

This any see what in to second of part our net on I drove is quarter. he ads. your was ask has Anthony. the your then question color about if Mustafa think And I'll political adds

The war.

take. can [indiscernible] Charlie

you question. Mustafa. is This for the Thank

Yes. the the in quarter. In add terms growth the markets combination as market. It's as strong net in of drivers well of of the a in international the U.S.

Although is the TV we're opportunities we TVs of U.S., the in . Overall, households devices that broadband to is because in the still a were growth of we happening devices the player we in to approaching of in because the markets. the of have by international the as continue used higher growth general. the ship and contributing the still followed grow, the mix consumers the U.S., and streaming TVs are see the the markets half than both strong at those of by slightly devices the players players share international markets.

really well to beginning the launched the and with the to distribution which #X see again than #X have just in Overall, devices, looking TV are XX Mexico. Again, and in like are growth we we're And Roku get are partners OS, we're improvement Mexico, we're we monetize other and Mexico. continues engagement doing our TV again, we doing Latin share, their the continued are engagement, doing the TV international, and our Equally, selling reach Mexico. that's America. markets with that Channel, and Mexico, partners in in In grow improves selling helping we OS player in growing in Brazil. TV us all with to they market more and we in in the at growing

growth large net us We in is number a country Brazil our Mexico, just And drive so that's to terms of Brazil. adds. have like helping households, a in strong of

really quick I'll add that. just to

is course, solid tailwind at a adds we ] We year-on-year sequential That's takes in see then growth did ARPU, down big XX-month [ On despite for the international, also big trail basis. had it on the year-on-year, side, quarterly. while active But we positive X% a see which, We XXX were a did actives a And account, positive change, sequential a out, a it's change. change. which quarterly but on definitely on share net the quarter. it at us. a of we the into very don't also ARPU, look ARPU

So really good ARPU very for net addition in strong a quarter. to the adds active

And again. This I'll just couple about we other to also screen consumers house. larger then Roku -- TV. think net is tend a they be One in the That consumers we're beneficial of to also TVs, larger a selecting are which also, helped the the is Anthony continuing shift I see continuing to consumers' add the room sizes that be minds observations see of to main and screen in size excel segment of we tend adds. us. in because selecting is value value-oriented products,

it's be so a And great in. spot to

Charlie, want further... talk then, you about do to And

far, it to the . impact Thus yet. the impact the the for are environment. for that But has seeing a conflict. most thanks of extent like experience we about spend it conflict. question Shweta, the course, from from a again, impact we're macro not Sure. not would, ad to Yes. -- Thanks seeing companies direct been it direct affects I

the of Our next Ruplu with question America. Bank Bhattacharya comes line from of

your continue think do of year, the open on did details had last the more billion upfront? market, mean in And on scatter said off commitments. is My you year? working the fill upfront margins? you mean discovery specifically that give some versus DSP you Because I and you rate how last third-party to in up did below gain pricing details, pricing? level first to trade on price compare plus as to I like open the are Can question I as with share? how you any CPMs So X so to you you the DSPs, upfront.

Ruplu, take question. . this Charlie, obviously, that Anthony. is you can

dollars numbers whether you'd I you'll it. Ruplu. to look, with say upfront calendar, be the start upfront overall broadcast in I'm you total I'm to the did saying, was to as just pleased Look, report described. we upfront they scatter blend pleased well of going upfronts, come I'll hoping the platform. our do in break not except that out terms say Thanks, the by to

and would, the I despite time as very call, It such upfront to the a in And a preceded last right team pace, we the it as pace knew because pivoted with industry this spending it me was is than interesting, focusing on earnings across the outcome. quarter's the one scatter. slower was it year said to dates. different pleased you closed closer for It's everyone usual. advertisers from closing we're one pretty see because air interesting on still are sales trend much And into at

third and saw I evidence the think we that of in will continue, that quarter. certainly

when So look at did we I total dollars, well.

compelling tends of late but highlighting, keep mentioned, We categories. coming the the data as scale, Dan the itself we continue business Again, to to as we in is recovery our combination across take and offerings. a offer uneven, share Roku-only from overall of TV because unique ad market keep

and hours as global the forecasting hours the making XX%. particularly -- year-over-year, Ruplu Roku decline, XX% just to that's reminder, way, grew while in declined linear impressions broadcast So linear as challenging. continue a by But on U.S. entertainment

significant. is gap the So

this I in continue continues, So believe will specifically, as and planned in earlier process. CTV general the to Roku and be bought

as third-party advertisers too. usual, Roku seeing, I we're upfront. seeing overall, about our engagement but in We're well. we're again, a scatter And DSPs. talked little seeing on with later than engagement great that engage bit the So there,

to City I the the we tools of the ads like in nearly in broadband think lot and a what's products is of talked and U.S. ad all powerful shoppable or or use that that drive having half some about unique advantages and audiences, retain seeing scale success. that engage us our of households We've data Roku our the and attract

you M&A quarter. remains on follow-up. differently things any Congrats thoughts markets? there it. for screen to home If can the screen So diversified weak, Got and to other do And end monetize the quick a there? spend just are saver that is

topic that Charlie well. And say me as Let sure on M&A. start has I'm on things to

I M&E scale lots We lot the So all, often, just the television. I platform. viewers streams where, of #X platform of their #X pressured before, for just think we're distribution M&E. our revenue not results. In apps our And different and And of QX you in still say generates if as and -- TV well, content, XX%. that, beyond relationship streaming grew but the with content on us I'll streaming services distribute can of first usually said we QX, and this see with revenue platform this relationship, apps a was

those are our are revenue the obviously, specifically, just know is, in we these M&E what different streams are of as that comes UI into user driving -- And . And TV browse promotions, content build viewer doesn't everyone types so so subscriptions around, for ways well. as then And we the case viewing ways engagement, super they we in in do to experience. implies, ways are that, and it when it integrate promotions viewers that but expose also to to that other doing effective that friendly.

key user leverages for good of something It's interface our we're at. the effort selecting it. the into for put one lot everyone. business. content. it's It's good that It We of our So for assets fact is a a win-win

in, So class, an in it's to we're to continue to think best invest area in. I invest that going area we that continue an area that we're an

cycle, economy now think don't the want I do of area but potential. to because you state is and current down right has it's of an I the Charlie, know, long-term that add? ad M&E And the

about promotion of just And and right. for both to Ruplu, Anthony. a about congratulations. that's diversifying M&E, UI I to prove the good it's Sure. beyond lot is versatile marketing Anthony about demand, We I'll advertisers how and their thanks talked stepping different sorts back, integrating that is other And partner to think and and maybe a add talked Roku the all think into advertisers who M&E to Thanks, that working. need

top and have building funnel impact, We it. we're the the funnel of and bottom of upon

to the word for unmissable funnel broad services business we're to partners, And reach for we lot, content, look, right and M&E, media on we the full make just their So that's place just acquisition through not a across use entertainment unmissable from a and engagement. builder a because them our invest.

M&E partners on the video the our Anthony in integration and platform too. click right? the means, And and You literally talked case ads here, here Viewer on Roku, about. their that watch of see will

ultimate So starting us. endemic impact see advertiser that for that beyond we're to And M&E. the is

effective them and seeing the So of Roku we're business. we're finding to of help interesting of accountable. is build power platform their has our the And ways what's partners individual each

all X customers, simultaneously, And the of and really channel consumers, advertisers and we can we our the M&E opportunities. relish the so benefit partners, sort

Cup powerful the sales tools, got short-term elections. some tell dampen scale and working fourth to ourselves see the but to World our the is But I that the earlier big we of because from the And to moments win. enormous limited about that streaming were We fall talked the M&E quarter, help schedules in the difficult category last the economic market, there uncertainty. you, cycles that mentioned I with not Anthony have to ad and also both midterm and temporary promotional general them facing do just reach pain partners. win release pretty the opportunity the

produced Just builds We few viewer loyalty. content a that examples. some branded

fan Roku leans had a to and our not machine ago, backs. Apple of extended we Plus for of creative platform. can Show. actually it's really examples learning partners and if unlocked on improve partners episodes, the there's is of advanced them just you lots subscribers. proactively executions you're for included and optimize Roku X-month they on large interviews the media. And the like user, exclusive a this, so free reduce this weeks free Apple's effective content trial churn new exclusively probably One win their available Roku around was noticed TV this Morning new material, It The that of a experience And season couple a And

M&E what and partners and the it but it in the So we'll other depth a a breadth we're perfect I've example for we'll about of question measure them and and to others, to for right of engagement more invest this been of impact. do uniquely is promotion talking the build place answering and of will this couple improve

is this again. And Anthony

And what's your is M&E the touch question. in part which on to question, other innovating user that I it's I create sort experience, back maybe question, interpreted your how beyond Just the of think, of was ways ways find our to for strategy those and part experiences create in that our installed into interface a discover experiences marketing of integrate viewers compelling big content user base. and they sales then to promotion, our also monetizing is of

so in we invested have And that this an area historically.

in. to we it's invest an it, we and lead area think in I continue that

example, Experience advertiser many game is which traditional find for was that It being Just played how by do Sports we which we so their Zone, the a pain T-Mobile, examples. is they launched Sports is sponsored services streaming a it point is was not When currently. for M&E which launched for viewers, -- big us. the on some when favorite

example, only we has started for phenomenon. viewers hit. buildings then is with M&E-based And a popular Roku McDonald's added ads. become the our We It big to building, a adding another like have super City cultural become example, used which

and are these So are viewer advertisers And these loves, the are things these peers -- promotions love doing. we're our them. kinds everyone that advertising experiences look them, things and that of

So certainly huge big of us. a it's a focus it's -- for area

next of line the Cahall from Steven comes Fargo. Wells Our with question

the that the performance driven gross revenue. gross missed I right just some being look earlier, think highest of quarter, margin the year-on-year by we platform sequential of M&E if the and to but Sorry in as as it of this some that's margin the is about market, at weakness

And should be QX as just and QX, we of bit that even pressure. little in could a bit be little about trends thinking into so a weak

when out mid-teens the there. then, you growth some sorry, love about -- OpEx heading color heading Dan, I'd in down think to So QX. . And

were costs. you've in some [indiscernible] to and done way it. a You've lot past. that on in had I good There projects the you've the investment mid-teens. work X-K, Is think know on continued a be I down

if just side. if sure decent there's want rate run OpEx more a to the I that's anything make ahead on or So

question, take the Steven. for that. I'll Yes, Thanks

the Gross we for gross strong. talked points margin very gross On backing up of sequentially. it for margin about us, XX% margin was QX, was X platform side, quarter the that out a the impairment charges

a there's as highest an of year-over-year is also It is well M&E -- structures on video we M&E. one on basis, you look distribution within products our versus impact yes, there As versus forward, the margin content different as different and activities mix of look the advertising. within display And our advertising. margin -- as within

So improve all on a and margins, the look which which to dollars, very focused but right to free when leads as profit is margins, we at gross up North absolute we look them Star and go for them of we we're to we at absolute flow, obviously cash want us.

continue we're on for M&E in have guidance, be guidance gross your do going because, and an XXX we give QX forecast margins market, -- adjustment XXX margin expecting to don't challenged. add to XXX the will But which for mix that no did we that that they that to But does the platform. of But we that feel based answer business forward. there's of XXX good adjustment adjustments. points are depends did to at play question impact go-forward a basis the We of have quarter a end on course, to that on challenged the about ex basis. where on on that And remain

of of OpEx, an about for million $XX margins. million. you of gross QX To how a we question on EBITDA your little bit guided gives and that think So a color to to $XXX on gross profit

single-digit but math. From You XXXX would that to when balance ROI $XXX on from do a growth $XXX in look rate those at rates OpEx our off next look But more with quarter and guidance EBITDA, the But and as -- we'll we positive expand QX a initiatives puts give because we million basis results. run for positive forward all range. we low That invest our to scale to we're that. will go I in that adjusted anticipate the are and growth perspective, focused million at towards monetization. do driving also going

of comes Our Seaport with from next Research line the question David Partners. . Joyce

increasing the that pricing the do of think the choice and your the that Could more streaming pricing your carriage How might all the as prevalent that where legacy in model impact you how And consumer impact reacting -- your streaming business those in the services, with legacy plans? world, marry you the on are or such the thought Disney, could could apps of the please if model there do about and systems? on Charter becoming cable deals out how is thoughts to versus streaming streaming terms trajectory? you discuss you

highlighted, the TV Anthony. like in the current is also high Well, this at of think David, just ecosystem. future the level, streaming you importance I and highlight a agreements

never So world And very actively it think streaming great . in shows just the States. benefit for the continue to more U.S., We're -- shifts in providers streaming TV as it that competitors. the large have streaming. built active are We're X both and we've when combined, fact country promote account the United to would bigger clear would is I the to that pay pay thought started streaming Roku, that the positions and streaming TV the platform while just a we these trying country I in operators stream the than the happen. is by #X the #X very largest -- our offerings, these people platform with think and of to we're TV future. both example, makes base in of which -- also competing position our

our think to -- So continue well credentials. where matter viewers activity streaming we're subscription viewer I to their on positioned streaming platform engagement the no attain monetize convention

tricky how going be make the pay that. we're for out think is these figure are transition and very And trying to just to I So companies to them great difficult streaming do very TV to in position. to a but

the for popular, use But a non-virtual TV live Spectrum to if Channel. I like, Netflix spectrum we area, obviously to in very also subscribe Roku cord and app I services are the services TV app, personally example, watch for Virtual it a and well. And which you sign Roku that do I serves also is on great even and cutters not television I Roku it just customers. pay-TV serve are Roku think operators, pay the and viewers platform, at look just YouTube TV that

we continue to think they I not credentials the obtain world viewers great we're we're selling how well do selling subscriptions. as monetize streaming. at that their extremely all by viewer and just monetize So positioned We matter to no and activity to well shifts subscriptions, streaming

watch to I Roku. our that is you through big be TV headline going think

Spectrum services. And I business we've And billing. I streaming. large content have because Surprising. it's the Pay been the but It right, do ecosystem. impact of app distributing so TV good mean it's revenue. increases overall I seen a have on we a our will streaming a it's the of think raise you through We Roku. And for asked evolution price increasing far, then about subscription, the on natural business

arrangements. We have revenue share

in a of lot have different being We overall. arrangements that that . our result for positive business

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

seen companies even them a revenue that their things companies struggling Anthony, their stock do losing and the on help have to them. streaming entertainment Street are to do of can you lot in Wall are accelerate sure lows. creative your multiyear, Like media dollars, of streaming prices. and What growth pressure and are your a types partners, of really is billions what of you've lot what I'm putting multi-decade Roku could help businesses? options or costs? reduce these They

there's their what a Well, we a connect with different is that's And of advertisers. and We it can mean, streaming core, is viewers I ways. we of help do, to as lot companies, mean, I lot them. -- actually, businesses do they first our transform services ways we streaming in

business lot about products deeply into putting to business. subscription whether lot We've ad-supported those our platform, they're thinking it. have a build them of trying or build to a We spent time a build businesses whether can features of an trying their help that they're

efficient and platform to most do And streaming to spending that them by and effective so effectiveness to platform. transition new subscribers, of for dollars make to far, just the in and up marketing sign terms the we're,

one. that's So

people heavy acquire requires service. But there's expertise. that's technical do to It your you companies create create do their to is services lot is app, can and a into to a of experiences. when that. customers own integrate of our are marketing Roku subscriptions, money and and Two doing offer lift. figuring direct-to-consumer user lifting and what build and distribute call experience. ways SVOD building how but other with own service, work might companies be different of their lot I when be the heavy data to And own app in different customers expertise. experts of requires those requires user to premium we and science lot customers those way become a build user trying them a a mean your to way for lot without a experience is engagement using which for how a They overall the with It of -- companies a it retain to might for lot of apps

company they're partner or building streaming with transport build in without can business streaming -- content is media sorry, expertise are and focusing programming. of those lot their more the that what more which good to their a company streaming much that's content sorry, a that's on a a new -- so -- studio and way at, efficiently transitioning another And or

if want don't I know to, those Charlie... examples. So a few are

really thing about a talk Rich, a is Roku is one engine. we engagement lot powerful

cyclically watch even trying engagement, them really So It's and get as help people a services to shift them churn and are subscribe to the to moving not we the to lot. ad drive shows from to we're and can commercials. now seeing subscription from embracing certainly getting sales, people that a big moving

of a partners impact is so windowing differently with driving studios. we positive of as engagement, at And media And M&E we're our and another engagement. good thing then our having the drive the seeing response and help lot we're doing we're really

the respect a Anthony to existed going costs, ways you're programming and power our the So studios different we're the in mentioned. really that lot of for -- hasn't can it UI Anthony because in we efficient, to as of that window with that respect because said, a we're we're see partner before, very monetize well as and good

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

Okay. programming. guys I you live ask Two to wanted about questions

for think in would was ago, for imagine growth channels engagement you that's to have people the live products a you live have around in greater think your You fast going is much of in die Roku thought how all investments are opportunity demand. and it through in of done would guys by a the whether content sense live. be terms and investments any in letter years quite of is TV around made greater I live and I and a Channel overall driving built, an bit, levels, guys sports, guys the viewing loads, viewing mentioned particularly ad the would -- lot to back streaming and and monetization? maybe I of and What probably on lot

on about thoughts tailwind we be So the thinking whether as I'd love a some something business. that's to to should hear

And then ask, to Star Dan, the free flow. I on North just comment want on cash

the think, flow Any you cash might shake about I year generated, $XXX this quarter guys just year-to-date. for what expectations free You million out to a sense get fourth for you the can XXXX? share for think or

will I'll take part. then, obviously, the first part take and on Dan, the live second

define let I yes, me well, live. just all, first So of mean,

this programmed sports hard explaining it's world, in is truly it like other platform linear game or on to show. that for I'm streaming just live -- So because our least call means a that means at live, also the But awards just listeners. an content linearly a it is content

it channel, that. don't doesn't that call -- a So when you linear to viewers respond

viewing the category live. So we linear call whole of

which the for into we've effort of a live guy, in a EPG, And of a like content. focused of our lot And a of very electronic great our out something drive also algorithms screen. experiences live. on like very live program to left-hand an to tuning lot built UI That's And machine live then now. menu There's for cable a it's put is we popular. We continue programming. of at on sort we've couple live tab learning box built years is And least traditional popular. been things promote our home

-- away, a but turns It don't it's it catches is. thought out channels I and of be It surprised it something find pick few wondering a have They lots true. there's want maybe to to through to fade just flip me their that people actually not that to attention. would how don't was want show. popular want

for big a is still continue will important area big where It growth internationally, to So especially it's growth area us. be linear big. is probably a super

So VOD, different there's popular lot live And content. different all of of those AVOD SVOD of content, effort is fast. types whether or TVOD. or lot types a or it's a into we and put live categories, of But growing

live also actually We're some airing events.

some done Formula Universe and Pageant. up, have with Miss great coming work We E the we've

And to of are also often of the these sports live way are up. the there. packages split confusing opportunities being so so is there many viewer But

navigate. an mentioned viewers it earlier, they'd actually, Anthony to like but is tool to Zone consumer does figure incredible the amazing for job events that an out So And to viewers find. team navigate the our how to experience helping live Sports

as advantage So it's well. another platform

to simple for they find them and delightful it to make We door. go. watch where they front want get what our through want come They and to

looking we're ways for viewers. And our help to always

it about have we tune-in be notice. they'll to reminders, a way is ad which when reminder a for on where for can air. And schedule in an a and they event click example, called reminded tune for So an something to is a like a live get them event viewer for a can

we're area innovating as an well. definitely it's in also So

for need doesn't is that QX relative like our big of some and Obviously, and But I you're big collection get cash positive respect we advertising out channels. that in cash a this in free then us through flow, of QX QX. million focused million very on working so had question capital. quarter. X, the We're QX, to And a have that. charges X flow. will thanks some recent flow, with QX, of come about for right, for cash to our free payment timing quarter $XXX And also until we restructuring sales marketing free is On quarters, wait of that lot paid us. the $XXX most yes, see on And to a

flow. of we now is flow said, quarters be think several good I for working are free so We pretty fluctuations some to a that capital very capital being proxy after capital from of light, proxy -- cash EBITDA intense, free with a EBITDA That is good in going cash and quarter-to-quarter.

to turn Anthony back session. to question-and-answer remarks. our concludes like Wood for I'd the That closing call

content joining. Thanks Thanks, . today. partners customers, everyone, attending to for call and our advertisers. for employees, Thanks our

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