Roku delivered better-than-expected results for the fourth quarter of 2024, reporting a 22% increase in revenue and a smaller net loss compared to the previous year. The company recorded $1.201 billion in revenue for Q4, while net losses shrank to $35.5 million from $78.3 million a year ago. Analysts had predicted lower revenue of $1.15 billion and a loss of 43 cents per share, but Roku outperformed these estimates. Following the announcement, the company’s stock rose more than 14% in after-hours trading on Thursday.
Roku reported 89.8 million streaming households by the end of 2024, a 12% increase year over year, adding 4.3 million users from the previous quarter. However, Roku announced that this will be the last time it regularly reports streaming household numbers, shifting its focus to revenue and profitability, similar to Netflix’s approach.
In its shareholder letter, Roku stated, “We delivered outstanding Platform results in Q4 — our first quarter with more than $1 billion in Platform revenue, which grew 25% YoY. We also continue to expand our penetration in the U.S., which has surpassed half of broadband households.”
The company added that its strategy remains centered on leveraging the Roku Home Screen for engagement, increasing ad demand, and growing subscription revenue. Streaming hours on The Roku Channel, the company’s free, ad-supported service, jumped 82% year over year in Q4. The platform now reaches approximately 145 million people in the U.S. Total streaming hours across all of Roku’s services hit 34.1 billion, up 18%.
“We continue to make progress growing ad demand through deeper third-party platform integrations, improving the Roku Experience (which starts at our Home Screen) to expand monetization, and growing Roku-billed subscriptions,” Roku said.
In Q4, revenue from Roku’s Platform business which includes advertising, content sales, and subscriptions totalled $1.035 billion. Political ad spending made up about 6% of that revenue. The company reported that advertising sales grew faster than overall Platform revenue and outpaced both the overall ad market and the OTT ad market in the U.S., citing data from SMI.
Roku’s gross margin in Q4 was 54.1%, slightly exceeding expectations due to a favourable revenue mix. Revenue from Roku’s Devices segment, which includes streaming players and smart TVs, grew 7% to $165.7 million. However, seasonal discounts impacted revenue and gross profit, with Q4 Devices gross margin at -29% and full-year margin at -14%.
Looking ahead, Roku said it expects to be operating-income positive by 2026.
For Q1 2025, the company projects:
- $1.005 billion in revenue (up 14%)
- $450 million in gross profit
- $55 million in adjusted EBITDA
- A net loss of $40 million
For full-year 2025, Roku expects:
- $4.610 billion in revenue
- $2.005 billion in total gross profit
- $350 million in adjusted EBITDA
- 12% growth in Platform revenue, excluding political advertising
Roku noted that Devices revenue is expected to remain flat in early 2025 due to excess inventory from lower-than-expected holiday sales.