01—Abstract
Summary
Summary of the 10-Q filed November 2, 2026. Cited figures are marked; the original filing is the authoritative source.
Roku, Inc. reported third-quarter 2026 total net revenue of $1.50 billiona, up from $1.21 billion a year earlier, with Platform revenue of $1.31 billion (Advertising $727.4 million, Subscriptions $580.9 million) and Devices revenue of $193.7 million.
Income from operations was $164.1 millionb versus $9.5 million a year earlier, and net income was $183.3 million, or $1.20 per diluted share, compared with $24.8 million, or $0.16 per diluted share. Adjusted EBITDA, a non-GAAP measure, was $248.8 million versus $116.9 million. The quarter included a $22.3 million net credit from terminating a portion of a previously impaired corporate lease and $13.6 million of merger-related costs.
The company ended the quarter with cash and cash equivalents of $2.52 billionc and short-term investments of $201.8 million, and had not borrowed under its $300.0 million revolving Credit Agreement. Nine-month operating cash flow was $703.2 million, and repurchases of common stock totaled $162.7 million before the program was suspended in connection with the pending merger. Devices gross profit remained negative at $(48.6) million for the quarter.
The dominant event in the filing is the proposed merger with Fox Corporation under an agreement signed June 14, 2026. Each Roku share would receive 0.9693 of a Fox Class A share plus $96.00d in cash, with former Roku stockholders expected to own about 27% of the combined company.
The U.S. Department of Justice issued a Second Request on September 8, 2026, which extends the HSR waiting period. Termination fees are $866.1 million payable by Roku and $1.2 billion payable by Fox in specified circumstances.
02—Key points
Key Highlights
- Total net revenue of $1,502.0 million in Q3 2026, up from $1,210.6 million in Q3 2025; nine-month revenue of $4,105.6 million.
- Advertising revenue of $727.4 million in the quarter, up 23%, driven by video impressions up 33% offset by a 7% decline in average price per impression.
- Subscriptions revenue of $580.9 million in the quarter, up 23%, with subscriptions up 7% and average price per subscription up 27%.
- Income from operations of $164.1 million in Q3 2026 versus $9.5 million in Q3 2025; net income of $183.3 million, or $1.20 diluted EPS.
- Adjusted EBITDA (non-GAAP) of $248.8 million in Q3 2026 versus $116.9 million; Free Cash Flow (TTM, non-GAAP) of $795.7 million.
- Pending Fox merger: $96.00 cash plus 0.9693 Fox Class A shares per Roku share; DOJ Second Request received September 8, 2026; $866.1 million termination fee payable by Roku in specified circumstances.
- Cash and cash equivalents of $2,518.8 million and no borrowings under the $300.0 million revolving Credit Agreement as of September 30, 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Roku kept $0.12.
- Revenue$1.50B100.0%
- Cost of revenue−$853.5M56.8%
- Gross profit$648.5M43.2%
- Operating costs−$484.4M32.3%
- Operating income$164.1M10.9%
- Interest, other & tax$19.3M1.3%
- Net income$183.3M12.2%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed November 2, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $1.50B$1.21B | +24.1% |
| Cost of Revenue | $853.50M$685.74M | +24.5% |
| Gross Profit | $648.52M$524.90M | +23.6% |
| R&D Expenses | $186.87M$182.24M | +2.5% |
| Operating Expenses | $484.44M$515.43M | −6.0% |
| Operating Income | $164.09M$9.47M | +1633.4% |
| Net Income | $183.34M$24.81M | +638.9% |
| EPS (Basic) | $1.23$0.17 | +623.5% |
| EPS (Diluted) | $1.20$0.16 | +650.0% |
| Shares Outstanding (Basic) | 148.65M147.47M | +0.8% |
| Shares Outstanding (Diluted) | 152.64M151.58M | +0.7% |
05—Questions
Frequently Asked Questions
How did Roku's core revenue streams perform in the third quarter of 2026?
Platform revenue reached $1,308.3 million, up from $1,064.6 million, led by Advertising at $727.4 million (up 23%) and Subscriptions at $580.9 million (up 23%). Devices revenue rose to $193.7 million from $146.0 million, up 33%, with shipment volume down 21% and average selling price up 71%.
What drove the swing to higher operating income?
Total operating expenses fell to $484.4 million from $515.4 million, mainly because sales and marketing dropped $51.2 million, including a $19.2 million credit tied to a corporate office floor buyout. Gross profit also rose to $648.5 million from $524.9 million, with Platform gross profit up 27%.
What are the key terms and status of the proposed Fox merger?
Under the June 14, 2026 Merger Agreement, each Roku share converts into 0.9693 of a Fox Class A share and $96.00 in cash, subject to adjustment so the stock portion equals 40% of total consideration. The DOJ issued a Second Request on September 8, 2026, which extends the HSR waiting period, and the filing states there is no assurance on the timing of clearance. The company also states that the Merger Agreement may be terminated if the Mergers are not completed by June 14, 2027, subject to extensions.
How strong is the company's liquidity position?
Cash and cash equivalents were $2,518.8 million and short-term investments were $201.8 million at September 30, 2026. The company had not borrowed under its Credit Agreement, had $32.2 million of outstanding letters of credit, and stated it was in compliance with all covenants.
What risks should investors note regarding Devices and capital returns?
Devices gross profit was negative at $(48.6) million for the quarter, and the company states Devices gross margins may remain negative. Share repurchases totaled $162.7 million in the first nine months of 2026, but the repurchase program was suspended in connection with the Merger Agreement and may not resume.
06—Continue