Roku's Return to Profit Fails to Impress Wall Street

Roku posted its first profitable quarter in four years, but investors sent the stock tumbling nearly 10% as the results and forecast fell short of Wall Street's hopes.

• A tale of two Rokus: The company's growth is now entirely driven by its platform business, where advertising and subscription revenue jumped 17% to $1.07 billion. At the same time, its hardware division remains an anchor, with revenue declining 5% to just $146 million, a dynamic the company framed in its shareholder letter as an intentional pivot. The Roku Channel continues to be its powerhouse, which Nielsen data confirms is the most-used free streaming service in the U.S. by watch time.

• Beyond the FAST lane: To find new revenue, Roku is experimenting with subscriptions, launching "Howdy," a $3-per-month ad-free service. The new service is a clear play to diversify beyond ads, even as the company adds more free content to its platform. Looking further ahead, executives also told TheWrap the company is testing a major home screen update planned for 2026.

• The growth question: Roku's challenge is clear: convincing investors that its successful pivot to a platform model can still deliver the explosive growth they demand, a story the current stock price suggests they aren't buying yet.

Meanwhile, Roku is pushing for global growth with a new play for viewers in Brazil and fresh hardware partnerships in the U.S. For another take on the company's earnings, see Variety's coverage.