Key Highlights

● Fox agreed to buy Roku at an enterprise value of about $22 billion.

● Each Roku share would receive $96.00 in cash plus 0.9693 Fox Class A shares.

● Roku reported revenue of $1,354.7 million, up 22%, without an earnings call.

● Completion is expected in the first half of 2027.

Roku, Inc. (NASDAQ:ROKU) published second-quarter 2026 results on 6 August 2026 without hosting an earnings call or giving a financial outlook. The reason is a pending acquisition: on 15 June 2026, Fox Corporation (NASDAQ:FOXA) announced a definitive agreement to buy the streaming platform in a transaction with an enterprise value of about $22 billion.

The Fox agreement

Under the terms published by Fox, each Roku Class A and Class B share would receive $96.00 in cash plus 0.9693 shares of Fox Class A common stock. Fox valued the stock element at $64.00 using a reference price of $66.03, the ten-day volume-weighted average price to 10 June 2026, making the headline value $160.00 per share. After completion, Fox shareholders would own about 73% of the combined company and Roku shareholders about 27%.

Fox plans to fund the cash portion with new debt and cash on hand, supported by a $12.0 billion committed bridge facility from Morgan Stanley Senior Funding, and expects pro forma net leverage of about 2.8 times. Completion is expected in the first half of 2027, subject to approval by both companies' shareholders and by United States and certain non-US regulators. Roku founder Anthony Wood and related entities, holding at least a majority of Roku's voting power, signed a voting and support agreement. Wood is expected to join the Fox board after closing.

Business and sector

Roku operates a television streaming platform, earning platform revenue from advertising and subscriptions and selling streaming devices. Its report states that more than 100 million households worldwide use Roku.

Latest results

Total net revenue for the second quarter was $1,354.7 million, up 22% from $1,111.0 million. Platform revenue was $1,221.0 million, up 25%, comprising $672.8 million of advertising, up 25%, and $548.2 million of subscriptions, up 26%. Devices revenue fell 1% to $133.7 million. Streaming hours rose 7% to 37.9 billion.

Financial performance and industry context

Gross profit was $673.7 million, a gross margin of 49.7%, and platform gross margin rose 2.0 percentage points to 53.0%. Operating income was $146.2 million, compared with a loss of $23.3 million a year earlier. Net income was $164.2 million, or $1.08 per diluted share, against $10.5 million. Adjusted EBITDA was $254.3 million.

Two items affected the comparison. Devices gross margin of 20.1% included a refund of tariffs imposed under the International Emergency Economic Powers Act; excluding it, the margin was negative 7.6%. Excluding the refund, free cash flow for the quarter would have been $242 million. Merger-related costs were $18.7 million. At 30 June 2026 Roku held $2,001.8 million in cash and cash equivalents and $555.4 million in short-term investments, and it repurchased $162.7 million of shares in the first half.

Risks and uncertainties

The transaction still requires shareholder and regulatory approvals, and its terms include a fixed share exchange ratio, so the value delivered will depend on the Fox share price. Without guidance, outside observers have less company-provided visibility into near-term trading. Devices remain a low-margin business sensitive to tariffs, and advertising revenue is exposed to the broader market.

Approvals and the closing timetable

Key milestones include shareholder meetings, regulatory reviews, any financing steps by Fox and Roku's next quarterly report. Whether the closing timetable of the first half of 2027 holds will be the central question. Observers will also look at how Fox describes its plans for Roku's advertising, subscription and device businesses, and at the Department of Justice review, extended on 8 September 2026 when it formally issued a second request for documents to both Fox and Roku. Quarterly letters will show whether platform revenue growth continues while the transaction is pending.