As the countdown to the $22 billion Fox acquisition begins, Roku (Roku.US)'s performance exploded! Q2 net profit soared more than 15 times, and both advertising and subscriptions increased by more than 25%

The Zhitong Finance App learned that the latest performance report released by US streaming set-top box leader Roku (Roku.US) after the US stock market on Thursday showed that the company continued to maintain a strong growth momentum in the streaming business in the second quarter of 2026, and its profit performance far exceeded the unanimous expectations of Wall Street analysts. In the second quarter, Roku's advertising and subscription business both grew sharply by more than 25%, and was driven by large-scale live streaming content such as the World Cup, highlighting Roku's evolution from simply receiving huge streaming TV operator-side traffic brought by “line cutters” to a high-margin platform that controls TV search, discovery, payment, and advertising budget allocation.

The company reported second-quarter revenue of $1.35 billion, up 22% year over year, higher than Wall Street analysts' average forecast of $1.3 billion. Roku's net profit reached a record $164.2 million, while net profit for the same period last year was only about $10.5 million, which meant a crazy increase of more than 15 times that of the same period last year; corresponding to the diluted earnings of 1.08 US dollars per share in the second quarter, double the analysts' expectations. After years of losing money, this is Roku's fifth straight quarter of net profit. Roku's free cash flow over the past 12 months reached $704 million, also a record high.

Roku's main business essentially does not focus on selling streaming media boxes, but rather operates a TV operating system, an exclusive content distribution portal, and a programmatic ad trading platform. Player and TV hardware, which operates at a low profit or even loss, is responsible for expanding the Roku OS installation scale; after more than 100 million households entered the company's streaming platform, Roku continued to monetize through home screen recommendations, video ads, The Roku Channel, subscription distribution, and transaction shares. The new home screen focuses on improving content discovery and household retention, while first-party viewing data enhances ad targeting and performance measurement, thus creating a bilateral network effect of “more installation and viewing time — more ad inventory and subscription transactions — higher platform revenue — continuing to subsidize hardware expansion”.

The advertising and subscription business both grew by more than 25%! Roku has been profitable for five consecutive quarters, and Fox is betting on “content+distribution” super collaboration

This performance report is the first financial report released by Fox after announcing the acquisition of Roku for $22 billion in mid-June. The deal is expected to close in the first half of 2027. On the grounds that the Fox deal has yet to be completed, Roku said that the company will not hold an earnings conference call or provide financial guidance on future prospects.

Anthony Wood, founder, chairman and CEO of Roku, and Dan Jada, chief financial officer and chief operating officer, wrote in the company's second-quarter letter to shareholders: “We believe that Roku's business scale, platform strategy, and financial strength will enable the company to continue to lead the evolution of the TV streaming industry while achieving sustainable long-term growth. “Fox's proposed acquisition is an extraordinary opportunity to accelerate the realization of our vision, enable us to scale faster, and innovate more actively for our audience, partners, and advertisers.”

After the Fox acquisition deal is completed, Wood will continue to hold an important role in the merged company and join the Fox board of directors. In announcing the deal, Fox said the company is “committed to continuing to operate Roku as an open and partner-friendly platform” while continuing to promote the “ubiquitous” distribution of Fox content.

In the second quarter, Roku's platform business revenue increased 25% year over year to US$1.22 billion, and gross margin was 53.0%. This included advertising revenue of US$673 million, an increase of 25% year over year; revenue from subscription business was approximately US$548 million, up 26% year over year.

In the second quarter, the total streaming time of Roku's platforms reached 37.9 billion hours, an increase of 7% over the previous year; its user base covered more than 100 million households.

In late May, the company began rolling out a new version of the Roku home screen and said it was the biggest update in over a decade. Roku executives say the home screen is “one of the most valuable streaming traffic entrances to TV,” and more than half of America's broadband households use it.

According to information, Wood and Jada wrote in the letter: “Our new home screen aims to maximize viewers' content discovery and personalized experience, while actively generating revenue for content partners and advertisers, and driving platform monetization growth.” The company completed the full rollout of Roku's new home screen in the US at the beginning of the third quarter and said “initial results are encouraging.” For example, according to two executives, the new home screen “enhances our ability to retain home users in the US, thereby increasing the number of users we can serve for a long time and reducing the overall growth cost of home streaming media users.”

In April of this year, Roku raised its adjusted EBITDA profit forecast for the full year 2026 to US$675 million from the previous one of US$635 million, and estimated net profit of approximately US$360 million. The company predicts that platform business revenue is expected to grow by nearly 21% to $5 billion, equipment business revenue of about US$535 million, and total net revenue of approximately US$5.5 billion, an increase of 16% over 2025.

Earlier on Thursday, during Fox's earnings call, CEO Lachlan Murdoch reiterated his reasons for pushing the deal.

Murdoch said, “Roku brings large-scale streaming capabilities through its open, partner-friendly platform, making it one of the leading TV streaming platforms in the US. “The merger of Fox and Roku will combine high-quality live streaming content, deep market relationships, large-scale distribution capabilities, and leading platform capabilities, including subscription services, to meet the changing needs of consumers and advertisers.”

Fox Chief Financial Officer Steve Tomcic pointed out that Fox expects the company's expected net leverage ratio of about 2.8 times after the merger, that is, net debt divided by profit before interest, tax, depreciation, and amortization (EBITDA). Therefore, Tomcic said, “The structure of this transaction provides us with great flexibility in capital allocation, so everyone should expect that our share repurchase plan will continue to accelerate unaffected while the transaction is pending completion and after the transaction is completed.”

According to the terms of the deal, Fox will pay approximately US$14.2 billion in cash of US$96.00 per share and provide 0.9693 Fox Class A common shares for each Roku Class A and Class B common stock in circulation. After the transaction is completed, Fox's current shareholders are expected to hold about 73% of the merged company's shares, while the original Roku shareholders will hold about 27% of the shares. By the close of the US stock market on Thursday, Roku's stock price closed around $150, with a market capitalization of about $22.2 billion.

Fox previously held 5% of Roku's shares, but sold that portion when it bought Tubi for $440 million in 2020.

From selling hardware to imposing a “TV traffic tax”: Roku's net profit soared more than 15 times, and the 10 billion home screen entrance value was revalued

The company not only “exceeded expectations in revenue” in the second quarter, but profit quality and operating leverage jumped at the same time: revenue of US$1.35 billion, up 21.6% year on year, about 3.8% higher than the LSEG consensus of US$1.3 billion, and about 4.2% higher than the company's previous guidance of US$1,295 million; net profit increased from US$10.5 million to US$164.2 million in the same period last year, and diluted EPS rose from US$0.07 to US$1.08, about 77% higher than FactSet's estimate of US$0.61.

Among them, Roku's overall platform revenue increased 25% to US$1.22 billion, and the platform's gross margin reached 53%; advertising revenue of US$673 million and subscription revenue of US$548 million, up 25% and 26% respectively, while 37.9 billion hours of broadcast volume increased by only 7%, which is enough to indicate that the company's revenue growth was significantly faster than usage time, reflecting simultaneous improvements in monetization capacity per unit traffic, advertising prices and subscription conversion rates. The company originally estimated net profit of only about 90 million US dollars for the second quarter, and the actual results were about 82% higher. Free cash flow reached a record high of 704 million US dollars in the past 12 months. The inflection point of profit has been upgraded from short-term cost reduction to sustainable cash generation.

Both advertising and subscription businesses have grown by more than 25%, and are driven by large-scale live streaming content such as the World Cup, which shows that Roku is evolving from simply receiving “line cutters” traffic to a high-margin platform that controls TV search, discovery, payment, and advertising budget allocation.

This latest quarterly earnings report is a major advantage for Roku's basic outlook, but to a certain extent, the increase in stock prices needs to be viewed differently. The last official 2026 full-year outlook before Fox initiated the acquisition is still total revenue of approximately US$5.535 billion in 2026, platform revenue of approximately US$5 billion, adjusted EBITDA of approximately US$675 million, net profit of approximately US$360 million, and strives to achieve free cash flow of US$1 billion by 2028 at the latest.

Since the $10 billion acquisition initiated by Fox (that is, Fox) has yet to be completed, Roku has not updated the performance outlook range. The terms of the transaction are 96 US dollars in cash plus 0.9693 Fox Class A shares. Based on the latest calculation of Fox A shares of about 61.79 US dollars, the current implied consideration is about 155.89 US dollars. As of Thursday, the stock price of Roku is about 150.07 US dollars, and the remaining price difference is about 3.9%. This also means that strong financial reports have raised the fundamental safety cushion before the transaction is completed and reduces downside risks under independent management. However, Roku's short-term stock price is already mainly determined by Fox's stock price, regulatory approval, and transaction completion probability, rather than profit improvement and valuation expansion in the traditional sense; what actually gains long-term management collaboration and valuation flexibility will gradually shift to the merged Fox-Roku platform.