Roku revenue hits record high as Fox deal nears

Roku reported net revenue of $1.5 billion for the third quarter, a 24 percent increase from the same period last year. This figure exceeded the $1.41 billion that analysts had projected. The company posted net income of $183 million, which represented a 639 percent jump from the prior year. That profit translated to diluted earnings per share of $1.20, well above the $0.55 estimate from the Zacks consensus.

The growth in sales was driven largely by the platform division, which generated $1.3 billion in revenue. That number rose 34 percent year over year. Advertising revenue climbed 23 percent to $727 million, marking the ninth consecutive quarter of double-digit growth in that sector. Roku attributed this rise to a shift toward higher margin products and strong performance in political advertising. The company stated that political ad spending in this quarter surpassed levels seen during the comparable period of the 2024 U.S. presidential election.

Subscription revenue also increased by 23 percent to reach $581 million. However, the gross margin for subscriptions fell by approximately 180 basis points to 40.9 percent. The company cited a strategic shift toward premium subscriptions as the cause. Total streaming hours on the platform reached 39.9 billion, a 9 percent increase from the previous year. Roku noted that the rollout of a new U.S. home screen improved content recommendations, leading to fewer cancellations of premium services.

The financial results arrived as Roku prepares for a pending acquisition by Fox. In June, the two companies agreed to a transaction valuing Roku at $22 billion. Fox will pay $160 per share using a combination of cash and its Class A common stock. The deal follows a strategic review conducted by Roku, which identified Fox as its preferred bidder. The merger combines Fox’s sports, news, and Tubi streaming services with Roku’s connected TV platform.

CEO Anthony Wood described the price as favorable in a June statement. He said the deal is the best way to accelerate the company’s long-term strategy. In the latest shareholder letter, Wood stated that the company remains on track for its second half 2026 forecast. He called the acquisition an opportunity to scale faster and innovate more aggressively for viewers and partners.

Fox reported its own earnings on Monday, with CEO Lachlan Murdoch stating that the company is working constructively with the Department of Justice to close the deal. Shareholders and foreign regulatory bodies have already approved the transaction. Because of the pending sale, Roku did not provide a financial outlook for future quarters. The company also skipped its regular earnings call to discuss the results.

Roku is currently expanding the new home screen interface to international markets. The company reported that this update has already reduced cancellations for premium subscriptions in the United States. The platform continues to see increased investment from media companies promoting their content through the Roku system.