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Roku Inc. (ROKU) offers a TV streaming platform and streaming devices. The platform acts as a TV streaming ecosystem: it enables consumers to seamlessly view thousands of channels on a wide range of streaming services, and it enables content providers and advertisers to reach consumer audiences in markets around the globe. Roku generates revenue primarily through the sale of digital advertising, tools for audience development, and content distribution. It also sells its own Roku-branded TV and various streaming devices, such as players, streaming sticks, and smart soundbars.

Roku operates within the highly competitive TV streaming industry. Competitors include: legacy pay-TV service operators, such as Comcast Corp. (CMCSA) and AT&T Inc. (T); companies that offer TV streaming devices, such as Inc. (AMZN), Apple Inc. (AAPL), and Alphabet Inc.’s (GOOGL) Google; TV brands offering their own TV streaming solutions; makers of video game consoles; mobile streaming platforms, such as Twitter Inc.’s (TWTR) Periscope; and companies offering other types of advertising platforms, like Facebook Inc. (FB) and Snap Inc. (SNAP).

Key Takeaways

  • Roku provides a platform for TV streaming and sells streaming devices.
  • The fast-growing Platform segment generates the most revenue and profits.
  • Roku’s active accounts rose to 55.1 million in the second quarter, driven by sales of Roku TV models and streaming players.

Roku’s Financials

Roku announced in early August financial results for Q2 of its 2021 fiscal year (FY), the three-month period ended June 30, 2021. The company posted a quarterly net income of $73.5 million, a significant improvement from the net loss of $43.1 million in the year-ago quarter. Net revenue for the quarter grew at a record pace, rising 81.2% year over year (YOY) to $645.1 million. Gross profit, which the company uses as a profit metric for its individual business segments, rose 130.4% YOY to $338.3 million.

In its letter to shareholders for the second quarter, Roku said that global audiences, content, and advertisers continued to shift from traditional to streaming TV. The company noted that it more than doubled its monetized video ad impressions compared to the same three-month period a year ago.

Roku’s Business Segments

Roku operates two main business segments: the Platform segment and the Player segment. It provides a breakdown of net revenue and gross profits for each of these two segments. The gross loss for the Player segment was excluded from the percentage-share calculation for total gross profit reported below and in the pie chart above.


The Platform segment generates revenue through the following sources: the sale of digital advertising and related services, content distribution, subscription and transaction revenue shares, premium subscriptions for customers wanting ad-free content, and licensing arrangements with service operators and TV brands.

The segment’s gross profit rose 149.2% YOY to $345.0 million in Q2 FY 2021. Net revenue was $532.3 million, up 117.5% compared to the same three-month period a year ago. The Platform segment generates 100% of the company’s gross profit and 83% of net revenue.


The Player segment generates revenue from the sale of streaming players, audio products, and related accessories. It includes sales of hardware, embedded software, and upgrades. Roku sells the majority of its players and audio products to retail distributors in the U.S., including brick-and-mortar and online retailers, as well as through its own website.

The segment reported a gross loss of $6.7 million in Q2 FY 2021, a deterioration from the gross profit of $8.4 million in the year-ago quarter. Net revenue for the segment rose 1.4% YOY to $112.8 million in the second quarter, comprising about 17% of the company’s total net revenue.

Roku’s Recent Developments

On Aug. 4, 2021, Roku noted that the total number of active accounts in on Roku’s platform rose 1.5 million YOY to a total of 55.1 million in Q2 FY 2021. The company said that growth in active accounts was driven by sales of Roku TV models and streaming players. Roku uses active accounts, which are defined as any user accounts that have streamed content on the company’s platform within the last 30 days of the measurement period, to measure the size of its user base.

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