Key Highlights

● Total net Revenue rose 22% to $1.35 billion, with platform revenue up 25%.

● Net Income reached $164.2 million, up sharply from $10.5 million a year earlier.

● A Tariff refund flattered devices gross margin, which would otherwise have been negative.

● Roku gave no financial outlook this quarter because of its pending Fox acquisition.

Roku, Inc. (NASDAQ:ROKU) reported second-quarter 2026 results on 6 August 2026 without a financial outlook or an earnings call, because it is subject to a pending acquisition. On 15 June 2026, Fox Corporation announced a definitive agreement to acquire Roku. The Shareholder letter gives no deal terms, price or closing timeline, although it describes the deal as an opportunity to scale faster.

How Roku earns its money

Roku operates a streaming platform built around connected-television software. It earns platform revenue from Advertising and from subscriptions and related services, and it also sells streaming devices. In its letter the company said it has more than 100 million households worldwide.

Platform revenue is the larger and more important segment. Devices are often sold at low or negative margins to grow the number of households, which in turn supports advertising sales. Advertisers are increasingly moving budgets from linear television to streaming, which is the industry trend on which Roku's model depends.

Second-quarter results

Total net revenue was $1.35bn, up 22% from a year earlier. Platform revenue was $1.22bn, up 25%, made up of advertising revenue of $672.8m, up 25%, and subscription revenue of $548.2m, up 26%. Devices revenue was $133.7m, down 1%.

Gross profit was $673.7m, up 35%, with a total gross Margin of 49.7%. Adjusted EBITDA was $254.3m, compared with $78.2m a year earlier, a margin of 18.8%. Net income was $164.2m, compared with $10.5m in the second quarter of 2025. Streaming hours reached 37.9bn in the quarter, up 7%.

Platform revenue made up roughly 90% of the total, which shows how little of the Business now depends on hardware sales. Advertising and subscriptions grew at similar rates, so neither alone drove the increase.

The company recorded $18.7m of merger-related costs in the quarter.

One-off items in the devices result

One item in the devices result flatters the figures. Roku said its devices gross margin of 20.1% included a refund of tariffs imposed under the International Emergency Economic Powers Act. Excluding that refund, the devices gross margin would have been negative 7.6%, and net income would have been about $127m rather than $164.2m. The refund therefore accounts for a meaningful part of the profit improvement, although the underlying platform growth is substantial on its own. The refund is a discrete item, so comparisons with later quarters should allow for it.

Risks and uncertainties

The letter identifies several risks. Tightening Supply of memory chips is putting pricing pressure on devices, and sales and Marketing expense is expected to rise in the second half of 2026 as Roku TV shipment volumes increase. Its forward-looking statements also cover the rollout of a new Home Screen, political advertising momentum, devices growth and the Fox transaction.

More broadly, advertising revenue is sensitive to economic conditions and to the strength of competition from other streaming platforms, large technology groups and television manufacturers. Tariff policy remains a variable for a company that sells hardware. Completion of the Fox transaction will depend on conditions that the companies have not detailed in the letter, and the company refers readers to its filings with the US Securities and Exchange Commission for the full list of risk factors.

What the Fox Deal Leaves Unanswered

Developments to follow include further announcements about the Fox agreement, including any regulatory process and timetable, the performance of platform revenue in the second half of the year, and the effect of memory costs on devices. As Roku has chosen not to provide guidance while the deal is pending, reported results and regulatory filings are likely to be the main sources of information.