Roku Surges: Earnings Beat and Upgraded Guidance Shock the Street

Roku just flipped the script—again. The streaming underdog posted a surprise profit and bullish guidance, leaving analysts scrambling to update their models. Here’s why Wall Street might’ve underestimated the living-room disruptor.

The Profit Punch

No one saw this coming. After quarters of red ink, Roku swung to profitability—crushing estimates without breaking a sweat. Ad revenue? Resilient. Subscriber growth? Still climbing. The bears just got steamrolled.

Guidance Game-Changer

Management didn’t just beat—they raised the bar. Next quarter’s outlook blew past consensus, signaling confidence in ad-tech upgrades and international expansion. Cue the frantic price-target hikes from Wall Street’s late-to-the-party crew.

The Elephant in the Room

Let’s be real: Roku’s still trading like a meme stock with an identity crisis. Profitable now? Sure. But with Big Tech circling the streaming hardware space, this Cinderella story might need more than one quarter to keep the glass slipper from shattering. (Hey, at least it’s not another NFT play.)

Key Metrics

A Surprise Profit

(ROKU -9.78%) reported earnings per share of $0.07 in the second quarter, far above analyst expectations and a positive $0.31 swing from the same period in 2024. Overall revenue grew by 15% to $1.11 billion, driven by 18% growth for the high-margin platform segment. Devices revenue was down, but Roku managed to cut its losses and nearly break even on device sales on a gross profit basis. That, along with keeping operating expense growth in check, helped push the bottom line into positive territory.

Users streamed for 35.4 billion hours on Roku's platform during the second quarter, up 5.2 billion hours compared to the prior-year period. Strong performance from video ads helped Roku boost its platform revenue, as did the acquisition of subscription streaming service Frndly. In June, Roku announced a partnership with(AMZN 1.70%) that brings access to Roku's user base to Amazon DSP.

For the third quarter, Roku expects revenue of $1.2 billion, which represents year-over-year growth of 13%. Platform revenue is expected to grow at a quicker 16% rate, and the devices segment should contract slightly and generate a larger gross profit loss compared to the second quarter.

Roku boosted its full-year outlook for platform revenue to $4.075 billion, which represents growth of 16% over 2024. The devices segment is expected to decline slightly, with Roku blaming tariffs.

Immediate Market Reaction

After initially surging in after-hours trading on Thursday, shares of Roku later dipped by around 3%. While the company beat analyst expectations across the board, the big earnings beat was partly a fluke of timing. Some inbound TV units shifted to later in the year from the second quarter, which improved the gross margin for the devices segment. While Roku's results were solid and the company boosted its full-year outlook, that wasn't enough to push up the stock.

What to Watch

The impact of the deal with Amazon DSP could be a long-term winner for Roku, eventually driving up platform revenue. The partnership is showing good results for advertisers, with a 40% boost to unique viewers on the same budget in early tests. While it will take time for this integration to ramp up, Roku could see its platform revenue accelerate in 2026.

Helpful Resources

• Full earnings report
• Investor relations page