Roku Inc at Bank of America Media, Communications & Entertainment Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brent Navon - BofA Securities Inc - Analyst : Maybe we can just start level set, big focus of you guys in past few years monetization, high-level update on some of the monetization initiatives that you have going on at the company right now.

Question: Brent Navon - BofA Securities Inc - Analyst : That's a great overview and a lot of topics that we will dive into a little bit deeper. So I guess on your platform segment, now makes up 90% of your revenues and really sits at the core of the Roku story. You're approaching 100 million households. You're rapidly growing engagement, especially at Roku Channel. What do you view as Roku's greatest asset? And what do you think investors most underappreciate about the Roku platform?

Question: Brent Navon - BofA Securities Inc - Analyst : And just sticking with the power of the platform, I mean, that's a great segue to the Roku Channel, right, and how the platform can really drive that. And so here you have the Roku Channel. You're growing engagement over 80%. You're delivering great revenue growth but not quite keeping up. So I guess two parts here is how sustainable is that pace of engagement growth going forward? And what levers do you have to pull to sort of drive convergence there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 3:20PM, ROKU.OQ - Roku Inc at Bank of America Media, Communications & Entertainment Conference

Question: Brent Navon - BofA Securities Inc - Analyst : Yes, so I guess on the demand side, right, when you think about your integrations, right, so you first integrated with Trade Desk, then you did ACR data, then you did UID 2.0. Now you're doing this platform level data with Amazon. When you say deeper, what could the next -- what could deeper look like from here? What more could there potentially be to go? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 3:20PM, ROKU.OQ - Roku Inc at Bank of America Media, Communications & Entertainment Conference

Question: Brent Navon - BofA Securities Inc - Analyst : And it's not as though it's like flipping a switch, right? Like these are gradual builds. And so like you think about Trade Desk. This has been an ongoing relationship for a while. I mean, do you -- you're still not fully ramped there, right? There's still more runway there. I mean, as you think about Amazon, you said that it will ramp in 4Q, but these are gradual type of builds.

Question: Brent Navon - BofA Securities Inc - Analyst : And I guess on that point on performance, I mean, historically, Roku did about $1 billion in advertising sales at upfronts. And so I'd be curious, there's a lot of debate about shift from brand to performance. How has your direct brand advertising trended over the last few years? Where do you see it going from here, especially versus more programmatic or performance-based advertising?

Question: Brent Navon - BofA Securities Inc - Analyst : That's great. And I guess just that 75% programmatic target, I guess, just curious. Where does that sit today in terms of how big is programmatic as a percentage of your business today?

Question: Brent Navon - BofA Securities Inc - Analyst : Got it. Shifting gears a bit, I think another interesting opportunity for you guys is self-serve, and it really has the potential to unlock this new class of advertiser that historically couldn't access TV. I think this has been the promise of media companies for a while, but it feels like maybe we might finally be at that point where it can happen. So just kind of curious how material you view this, can be over the next few years, and what you guys -- what your plans are in that market?

Question: Brent Navon - BofA Securities Inc - Analyst : And so I guess just to follow up on that, right? I guess, customer awareness, SMBs have to be made aware of that this product and obviously, the simplicity of the product, especially for an SMB that may not have the sophistication, right? So I guess, -- what's the plan to make the SMB market aware of this offering? And what's -- how does -- what's your plan for that?

Question: Brent Navon - BofA Securities Inc - Analyst : Interesting. I mean, is this more of like a multiyear needle? Like is this a potential '26 needle mover?

Question: Brent Navon - BofA Securities Inc - Analyst : Right. Shifting over to M&E, so Roku's M&E business has faced headwinds, but we are seeing some encouraging signs. Sticking on to the sports, there have been some several new large sports streaming services launching. And I can personally say I've seen some advertisements on my own Roku home screen. So how do you see this segment evolving, and could this potentially return to growth in '26 and beyond?

Question: Brent Navon - BofA Securities Inc - Analyst : Got it. So shifting to subscription, that's another part of the business you're very bullish on. So what are the key drivers for subscription growth? And you obviously just did the Frndly acquisition. You announced Howdy. How does that fit into the strategy there?

Question: Brent Navon - BofA Securities Inc - Analyst : Interesting. Shifting over to costs, so that's been a big focus of you since you've come -- since you've been at Roku. You've targeted being operating income positive in '26. You're also well on track to do operating expense growth of mid-single digits. Longer term, where do you see margins of this business going?

Question: Brent Navon - BofA Securities Inc - Analyst : And I guess with that, you have inflection in free cash flow as well. I know that that's -- you've said multiple times that's your North Star. You've recently announced a buyback program, I guess, in addition to what you've normally done on net share settlement, but you've also been active in M&A. So how should we think about your capital allocation priorities from here?

Question: Brent Navon - BofA Securities Inc - Analyst : Great. I want to sneak in at least one hardware question. So you guys have built this really strong position, approximately half broadband households in the US, Walmart acquiring VIZIO. How should we think about Roku's share of new TV shipments today, given that you guys are now the incumbent in many cases and implications for market share going forward? How should we think about that?

Question: Brent Navon - BofA Securities Inc - Analyst : Well, like Walmart, VIZIO is selling TVs, yes.

Question: Brent Navon - BofA Securities Inc - Analyst : Great. We got 30 seconds left. So I guess we'll sneak last one in here. I guess, putting all this together, a lot of irons in the fire. We're sitting back here in three years. Which of these opportunities that we discussed are -- you think were going to be the biggest surprise to all of us? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 04, 2025 / 3:20PM, ROKU.OQ - Roku Inc at Bank of America Media, Communications & Entertainment Conference

Question: Brent Navon - BofA Securities Inc - Analyst : That's great. I'll end it on that and thank you so much.