Roku reports Q4 Numbers

2020 Highlights

• Total net revenue grew 58% YoY to $1,778 million;

• Platform revenue increased 71% YoY to $1,268 million;

• Gross profit was up 63% YoY to $808 million;

• Roku added 14.3 million incremental active accounts (up 39%) in 2020 to reach 51.2 million

• Streaming hours increased by 20.9 billion hours YoY to a record 58.7 billion;

• Average Revenue Per User (ARPU) increased $5.62 YoY to $28.76 (trailing 12-month basis);

• In 2020, 38% of all smart TVs sold in the U.S. were Roku TV models


We are pleased with our 2020 results and the resilience of our business, and are optimistic about the year ahead. We believe we have sufficient visibility in the short-term to provide formal outlook for Q1. However, as we look farther ahead, the level of uncertainty compounds when trying to assess the net impact of a variety of factors such as the timing of the vaccine rollouts,
emergence of new COVID-19 variants as well as the lasting economic impacts of the pandemic. Consequently, instead of providing a formal outlook for the full year, we will provide some directional perspective.
Historically, Q1 is our seasonally softest quarter from a revenue perspective (typically revenue has been roughly 25% lower sequentially than our seasonally strong Q4). Our Q1 outlook calls for similar seasonality with the midpoint of total net revenue Roku Q4 and Full Year 2020 Shareholder Letter
of $485 million (up 51% year-over-year). We anticipate total gross profit of roughly $238 million at the midpoint. Strong gross profit growth outpacing OPEX growth is expected to result in adjusted EBITDA of $31 million at the midpoint.

Wood also noted a difficult comps to last year’s results:

We are mindful that in 2021 year-over-year comparisons will be quite volatile. In the first half of the year, we expect strong financial comparisons as compared to the first half of 2020 which includes early impacts from COVID-19 and the resulting economic lockdown. While in the second half of the year, we anticipate much tougher comparisons thanks to our exceptional performance in 2H20, and Q3 in particular, as consumer interest in streaming surged and our monetization efforts rebounded from slower Q2 growth levels.

Shareholder Letter:…



Really like this quarter. For me, its all about their platform revenue. That grew at a very healthy 81% YoY. Accelerated from 78% last quarter. As long as this keeps up, their revenue growth numbers will continue to beat because as of this Q, platform currently makes up 72% of total revenue. Up from 70% last quarter and 63% YoY.

I especially love that platform revenue this quarter was MORE than total revenue the previous quarter. 3 years ago, the player revenue was a bigger portion of overall revenue. Very impressive execution.


tremendous quarter…

platform revenue y/y growth - i.e. everything non-device (advertise revenue, sharing with SVOD subscribed through Roku devices and other fees they charge to content partners) - at 82%; accelerated from 78% last Q and 48% at the bottom of 2020… enabled them to deliver $40M free cash flow in the quarter… and they said next Q will also see positive adj EBITDA… in a seasonally weakest quarter…

Similar to PINS, I like this management who does not just show rosy picture and always points out potential head winds, in this case expected tough comp in 2nd half of 2021… this is being conservative as I believe the CTV ad spend will accelerate in the 2nd half of 2021 as ad budgets increase due to re-opening and thus overcome tough comp…

ROKU is up 41% YTD compared to CRWD at 14% and NET at 8%…
And holding well after yesterday’s results. This is significant because this stock had tendency in the past to sell off after earnings… and now its changed, market is starting to treat it with more respect… which I hope means that its likely to sustain or grow from here…

ROKU to me is next NFLX or better because ROKU is not dependent on investing in original content… so its business is more akin to YouTube or Apple App store… therefore, has a potential to eventually hit market cap of $200B to $500B (compared to its $62B market cap right now.)

Thankfully I moved my ZM proceeds last quarter to ROKU, its 2nd largest position at ~10% for me now (after CRWD at ~24%)… its been a big contributor to my portfolio YTD gain of ~23%… (on top of 200% last year… it is still unbelievable)…

long CRWD, ROKU, PINS, TDOC, SQ, NARI DDOG, NET, ASAN… in that order

Just a couple of additions to the points made above:
1. Platform revenue as % of the total revenue is still growing. May eventually end up at 80-85% especially ROKU continues down the path of services and AVOD more?
2. The gross margin for Platform revenue is growing at a fair clip. It currently stands at 63.8% which is significantly higher than the overall gross margin of 47%. So if the platform revenue continues gaining share of the overall revenue, the margins for this can grow high fast.

Metric	  Q4’19	Q1’20	Q2’20	Q3’20	Q4’20	YoY 
Tot. Rev  411	321  	356  	452 	649	58%
Plt Rev	  259	233	245	319	471	81%
Plt Rev%  63%	72.6%	68.8%	70.6%	72.6%	+200bps
Plt GM%	  62%	56%	56.6%	61%	63.8%	+280bps
Tot. GM%  39%	44%	41%	47.6%	47%	

Plt.: Platform
Plt Rev%: Platform revenue as fraction of overall revenue.
GM: Gross Margin

Besides the Quibi purchase, there have been some rumblings recently that Roku is possibly looking to get into making it’s own content so it may eventually butt heads a bit with Amazon, Disney, Apple, etc.
They recently listed a job for a Lead Production Attorney “to work on its expanding slate of original content.”

See the articles below for more details:……


Besides the Quibi purchase, there have been some rumblings recently that Roku is possibly looking to get into making it’s own content so it may eventually butt heads a bit with Amazon, Disney, Apple, etc.
They recently listed a job for a Lead Production Attorney “to work on its expanding slate of original content.”

Producing content outright is something that would concern me and something I tried to pay attention to on the call. CEO Anthony Wood was asked about it twice and both times specifically used the words “licensing” and “acquisition” when addressing it. This is purely trying to read between the lines so take it for what it’s worth, but it sounds like Roku would explore buying more content on the cheap they think they can monetize on The Roku Channel before any pivot into full-fledged production of their own content. Not that they’ll never get there like NFLX did, but my impression coming out of the call was it’s not as big a short-term focus as the job postings might initially imply. I’m open to hearing other opinions.

As it was, I thought this was a great quarter and bodes well for the foreseeable future.


Thx for the detailed summary.

I witnesses the ROKU TVs pour out of retail chains this Xmas with cares act $$$ so I’m not surprised. Plus the major retail relationships were mentioned in Q3 discussions. Negotiating with big box chain electronics buyers is tough business. Kudos to Roku sales soldiers cracking those tough nuts.

Glad I bought in at $50🤑 I see similar phenom with FUBO which is also available on ROKU.Do you? As more Americans learn to live on less, more cords will be cut.

Another ancillary ROKU play is MGNI which is making quick gains on TV ad sales sell side—and what company wants to pay ad sales reps? Zero. These guys make way too much money for “relationships”. MGNI and TTD put the kibosh on those expenses and become deeply embedded with customers across a variety of platforms. Very easy sales pitch for MGNI.

Huzzah to a brief gritty forecast from ROKU CEO. Tis far preferable to a slimy long answer from a charmer any day.

The power hungry cancel culture and fear-driven herds may change channels. I’m staying tuned to watch ROKU digest this elephantine market byte by byte.