0001628280-26-029310
SEC filingPlatform revenue grew 28% YoY to $1.13B, driving overall revenue up 22%.
Total net revenue for Q1 2026 reached $1.249 billion, a 22% increase from $1.021 billion in Q1 2025. The growth was primarily driven by the Platform segment (Advertising + Subscriptions), which surged 28% to $1.131 billion, now representing 91% of total revenue versus 86% a year ago. Gross profit improved 27% to $564.9 million, with gross margin expanding 200 basis points to 45.0% (from 43.0%). This margin expansion was largely due to a favorable mix shift toward higher-margin Platform revenue and improved Advertising segment margins. Net income swung to $85.7 million from a net loss of $27.4 million in the prior year period, reflecting strong operational performance and a $13.4 million gain on the sale of strategic investments. Adjusted EBITDA more than doubled to $148.4 million from $56.0 million, demonstrating significant operating leverage.
The new segment reporting structure highlights the growing importance of Platform. Advertising revenue grew 27% to $612.7 million, fueled by a 59% surge in video ad impressions, though partially offset by a 14% decline in average price per impression due to product and country mix changes. Subscriptions revenue rose 30% to $518.5 million, driven by a 12% increase in subscription count and a 22% rise in average price per subscription, with contributions from the acquisition of Frndly TV and the launch of Howdy. Devices revenue declined 16% to $117.6 million, as volume fell 15% and average selling price decreased 3%, consistent with the company's strategy to prioritize streaming household growth over device profitability. Despite the Devices revenue decline, the segment's gross loss remained stable at $(19.1) million, while Platform gross profit increased 26% to $584.1 million, further underscoring the strategic shift.
Management did not provide explicit forward guidance but emphasized strategic priorities: growing Platform revenue and profitability, increasing Adjusted EBITDA, and maximizing Free Cash Flow. The company expects to continue managing device pricing to drive Streaming Household growth, which should lead to higher long-term Platform revenue. Macroeconomic risks, including tariffs, inflation, and geopolitical uncertainties, remain, but management believes current cash and credit facilities are sufficient for the next twelve months. The recent enactment of the One Big Beautiful Bill Act impacted income taxes favorably, though the exact timing of a potential valuation allowance release remains uncertain. Overall, the MD&A conveys confidence in the platform model and the ability to generate sustainable cash flows.
As of March 31, 2026, Roku held $1.65B in cash and cash equivalents and $0.73B in short-term investments (time deposits), totaling $2.38B in highly liquid assets. The company has no outstanding debt under its $300M revolving credit facility (undrawn), with only $39.5M in letters of credit issued. Shareholders' equity stood at $2.67B, and inventory was $101.3M, down from $114.6M at year-end 2025. The current ratio (current assets/current liabilities) is approximately 2.9x, indicating strong liquidity.
Total purchase commitments as of March 31, 2026 were $886.2M, consisting of content ($157.5M), manufacturing ($353.4M), and other obligations ($375.3M, including data center capacity). Of this, $582.3M is due within the next nine months (through December 31, 2026), $289.9M in 2027-2028, and $13.9M thereafter. The manufacturing commitments are concentrated in the near term, reflecting hardware procurement for Devices.
During Q1 2026, Roku repurchased 1,014,873 shares of Class A common stock for $100M at an average price of $98.53, under the $400M authorization approved in August 2025. As of March 31, 2026, $150M remains available. The company did not pay dividends or issue/repay debt. Capital expenditures were $3.1M (0.3% of revenue), primarily for property and equipment.
Roku reorganized its segments in Q1 2026, disaggregating the former Platform segment into Advertising and Subscriptions. Advertising revenue grew 26.9% YoY to $612.7M, with gross profit of $371.0M (60.6% margin). Subscriptions revenue grew 30.3% to $518.5M, with gross profit of $213.1M (41.1% margin). Devices revenue declined 15.9% to $117.6M, generating a gross loss of $19.1M. International revenue was less than 10% of total. Customers J and B each represented 13% of accounts receivable; Customer J accounted for 11% of total revenue.
Operating cash flow of $199.1M significantly exceeded net income of $85.7M, indicating strong cash generation driven by non-cash charges (depreciation, stock-based compensation) and working capital benefits. Capex intensity is low at 1.6% of CFO, yielding free cash flow of approximately $196M. The company returned $100M via share repurchases, fully covered by FCF. Notable working capital swings include a $126.9M decrease in accounts receivable and a $35M decrease in accounts payable, partially offset by accrued liabilities decreases. An impairment of $4.9M was recorded. Overall, cash flow quality is solid with ample liquidity ($1.65B cash end of period).