Roku, Inc. Q1 2026 Earnings Recap

Roku shares rallied 9.7% after the company delivered a Q1 result that outpaced expectations, highlighted by a 28% increase in platform revenue, substantial growth in ad and subscription businesses, and upside in both EBITDA and free cash flow margins. Management also guided higher on full-year platform revenue and EBITDA, while addressing investor concerns around device costs and memory pricing.

Key Takeaways

• Platform revenue rose 28% year over year in Q1, supported by the Olympics, Super Bowl, and 27% growth in advertising revenue.
• Subscription revenue accelerated 30%, boosted by new premium partners, including Apple TV and Peacock, and surpassing 100 million streaming households.
• EBITDA margin nearly doubled to almost 12%, with free cash flow of $148 million (free cash flow margin ~16%), the company’s second-highest on record.
• Full-year 2026 platform revenue guidance increased by over $100 million, raising expected growth by approximately three points to 21%; EBITDA and margin guidance also moved higher.
• Management indicated memory cost inflation is already reflected in device outlooks, with cost advantages helping to attract OEM partners; strategic flexibility is expected to sustain expanding margins despite market headwinds.