1. Roku’s turnaround gains momentum with a 17% increase in platform revenues in Q3 2025. Gross profit hits $525 million, with platform gross margin at 51.5%. Q4 revenue expected to grow 12%, platform revenues by 15%, and platform gross margin at 52%. Strong growth projections reinforce confidence in Roku’s profitability cycle.
2. Roku maintains market leadership as the top-selling TV operating system in the US, Canada, and Mexico. Its US TV unit share surpasses competitors. The platform’s scale creates a competitive advantage, with the Zacks consensus estimating 13.7% growth in streaming hours for Q4. Roku Channel’s high engagement further solidifies its position.
3. Advertising growth drives Roku’s platform revenues as automated ad buying expands. Integrations with third-party demand-side platforms and Roku Ads Manager attract new advertisers. The platform’s data-rich ecosystem supports measurable advertising formats, positioning Roku to capture incremental ad spend. Amazon’s expanding CTV advertising footprint signals industry relevance.
4. Subscription growth diversifies Roku’s revenue streams, supported by Premium Subscriptions and the Frndly TV acquisition. Content discovery enhancements and the Sports Experience drive subscription growth. Howdy, an ad-free service, expands Roku’s reach with efficient subscriber acquisition. The subscription ecosystem supports ongoing margin expansion for Roku.
5. Roku’s valuation remains attractive compared to industry and sector averages. With improving margins, rising free cash flow, and share repurchases, Roku’s forward twelve-month price-to-sales ratio of 2.98X is below industry average. Roku’s consistent outperformance in returns suggests investor confidence in its growth trajectory and margin potential.
6. Roku’s efficient monetization of owned inventories and expanding advertising ecosystem set it apart from competitors like Netflix and Warner Bros Discovery. Roku benefits from an asset-light model, faster margin expansion, and broader supply of CTV inventory. Roku’s ability to capture incremental ad spend while maintaining superior margins positions it competitively in the industry.
7. Roku’s improving margin profile, growing advertising engine, and expanding subscription ecosystem indicate a business regaining momentum at scale. With rising free cash flow and an attractive valuation, Roku presents a compelling opportunity for investors. The stock carries a Zacks Rank #2 (Buy), supported by strengthening fundamentals and performance trends.

Read more at Nasdaq: Roku’s Improving Margins Signal a Turnaround: Is the Stock a Buy Now?