Roku Surpasses Expectations in Q4 2024 with Revenue Increase and Narrowed Net Loss

Roku's fourth-quarter performance for 2024 exceeded market projections, delivering impressive results. The streaming platform reported a 22% revenue growth, reaching $1.201 billion. Simultaneously, the company's net loss narrowed significantly to $35.5 million, compared to $78.3 million in the same period the previous year.

In terms of streaming households, Roku recorded a notable increase of 12% year-over-year, reaching 89.8 million. This figure represents an increase of 4.3 million from the previous quarter. Going forward, Roku will discontinue reporting streaming households on a regular basis, mirroring the move made by Netflix. The company will instead focus on revenue and profitability metrics for its quarterly earnings.

Operating expenses for Q4 witnessed a modest 2% increase, amounting to $551.7 million. Financial analysts had projected lower revenue of $1.15 billion and a wider loss per share of 43 cents.

Roku's Platform business, which encompasses advertising, content sales, subscription revenue sharing, and direct-to-consumer subscriptions, generated $1.035 billion in revenue during Q4. Political ad spending constituted approximately 6% of this total. The company's advertising sales witnessed a stronger growth than overall Platform revenue, outperforming both the broader ad market and the over-the-top (OTT) ad market in the United States, according to SMI data.

Gross margin for Q4 reached 54.1%, exceeding Roku's expectations due to a favorable mix shift in activities. For the full-year 2024, gross margin stood at 53.5%.

Devices revenue experienced a 7% surge in Q4, amounting to $165.7 million. However, elevated seasonal discounts resulted in a negative gross margin of -29% for the segment during this period. The full-year gross margin for Devices was -14%.

Roku has set its sights on achieving operating income positivity by full-year 2026.

For the first quarter of 2025, Roku estimates total net revenue to grow by 14% to $1.005 billion, with Platform revenue rising by 16%. The company's Devices revenue is anticipated to remain relatively stable due to elevated inventory resulting from lower holiday sales. Roku projects total gross profit to reach $450 million, adjusted EBITDA to be approximately $55 million, and a net loss of $40 million for Q1 2025.

Full-year 2025 guidance provided by Roku includes an anticipated net revenue of $4.610 billion, total gross profit of $2.005 billion, and adjusted EBITDA of $350 million. Platform revenue is estimated to reach $3.95 billion, representing an annualized growth of 12% (or 15% excluding political advertising). Additionally, the company expects Devices revenue to increase by 12% to $660 million for full-year 2025.