On the Road With Roku: Home Screen, DSPs, & Political in 2H

Research evidence excerpt

On the Road With Roku: Home Screen, DSPs, & Political in 2H

ave been generally surprised at the size of Avg Daily Vol (000) 3,294 ◦Management

subscriptions revenue at ~40%+ within platform while gross margin strength of Book Value/Share US$17.13

advertising has held in at ~60%. Price/Book 745%

called FCF/sh the North Star with a goal of managing or reversing Net Cash Per Share US$14.84 ◦Management Div Yield 0.00% dilution. They talked to the process of lowering SBC by $25MM in ’25, with a further

Fiscal Year End Dec

$25MM projected in ’26 based on guidance.

Market is holding up well. Management made the point that the 20% 2Q guide Price Performance - 1 Year ◦Ads

was consistent with 1Q ex-Frndly at 23%. ROKU now has a significant amount of USD

data on what to expect out of month 1, 2, & 3, of 2Q and Bookings and commits 140

are coming through and the pipeline is performing well. 130

PSC take would be that ROKU is willing to underwrite an organic double 120 ◦Our

digit growth rate (e.g. ex-Political) on a multi-year basis, plus holding expenses to 110

MSD growth. We think investors love the margin expansion and steady-to-declining 100

share count but are pushing for revenue growth closer to mid-to-high teens. This 90

seems achievable, but management is not yet endorsing this target. 80

• New Home Screen To See Broad Adoption Into ’27: Management discussed and May-2560 Jul-25 Sep-25 Nov-25 Jan-26 Mar-26 May-26

demoed the new home screen to investors saying that they have tested several versions

Source: Bloomberg but will move forward with one towards the end of the year. [see continued in note].

RISKS TO ACHIEVEMENT OF PT & RECOMMENDATION

Limited Profitability History, Macroeconomic Cycles, Technology Innovation, Competition

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