Roku earned more than $1 billion from its platform business alone, which includes subscription sales and advertisements from its streaming video devices, the company revealed on Thursday.
The revelation comes weeks after the company revealed it had nearly 90 million customers who were using Roku smart TVs and streaming devices around the world, which helps bolster its flourishing platform business.
Sales from subscriptions and advertisements on Roku devices clocked in at $1.035 billion during Q4 2024, an increase of 25 percent compared to the prior year. Total revenue was $1.201 billion, up 22 percent. Hardware sales jumped to $165.7 million during the retail holiday shopping period, up 7 percent.
Roku specializes in low-cost devices that provide access to popular services like Netflix, Disney Plus, Prime Video and YouTube, as well as its own free, ad-supported streaming TV (FAST) platform, The Roku Channel.
Over time, Roku’s hardware sales have taken a back seat to its subscription and advertising business, with the company opting to charge less for its streaming devices and smart TVs relative to some of its competitors.
That strategy resulted in Roku losing $47 million from its device business, but the company didn’t sweat those details, as its subscription and advertising business fully covered it with $559.9 million in pure profit.
Overall, Roku’s operational profit climbed 17 percent to $512.6 million during Q4. Roku ended the quarter with $203.2 million in free cash flow, up 16 percent on a year-over basis.
Average revenue per user was $41.49 for the quarter, up 4 percent compared to the prior year and 39 cents higher than Q3.
The Roku Channel’s linear and video on-demand content now reaches 145 million households across the U.S., a number that includes the installation of Roku apps on phones, tablets and smart TVs made by its competitors. Roku supports Android TV (Google TV) and Amazon Fire TV through dedicated apps on those platforms, which offer access to The Roku Channel’s content library.
“We continue to make progress growing ad demand through deeper third-party platform integrations, improving the Roku Experience — which starts at our home screen — to expand monetization, and growing Roku-billed subscriptions,” Roku executives wrote in a letter to shareholders on Thursday.
Roku is one of the most-dominant platforms in the United States and Canada, account for a 40 percent share of the streaming platform marketplace. It closely competes with Amazon, whose Android-powered Fire TV sticks and smart TVs have a near-identical share of the market there.
In the United States, Roku ended 2024 as the number one streaming TV operating system by sales for a sixth consecutive year. It was also the top-selling TV operating system in the United States and Canada during Q4, and the company continues to focus on the build-out of its smart TV business in other regions like Brazil, Colombia, Chile, Peru and the United Kingdom.
