By Mark Maurer
Roku's push into advertising and subscription services has helped the streaming platform return to full-year profitability for the first time since the days when pandemic lockdowns gave its business a boost.
Cost cuts have also helped Roku's bottom line, as the San Jose, Calif.-based company has addressed overinvestment in certain smart-home products like security cameras and the hiring of too much staff during the pandemic-fueled streaming boom.
Charlie Collier, president of Roku Media, and Chief Financial Officer and Chief Operating Officer Dan Jedda, who joined in 2022 and 2023, respectively, have reined in wasteful spending and shifted toward areas with bigger returns. And after a three-year stretch of sizable losses, Roku posted a full-year profit for 2025.
"We're being very intentional with our trade-offs and we're prioritizing initiatives that move the needle on both revenue and profitability," Jedda said in an interview.
Roku brought in more advertising revenue through new and expanded partnerships with demand-side platforms such as Amazon Ads and FreeWheel, allowing advertisers to buy premium streaming ad inventory. The company plans to finish redesigning the Roku homescreen this year, a move aimed at getting users to spend more time watching content on the platform. The number of ad placements isn't set to change as part of the redesign, the company said.
The company, which primarily makes money from selling digital ads and recommending streaming services to users who subscribe to them on the platform, booked a profit of $88.4 million last year, compared with net losses of $498 million, $709.6 million and $129.4 million in 2022, 2023 and 2024, respectively.
Roku, which went public in 2017, last saw an annual profit in 2021, at $242.4 million. But analysts say that year deserves an asterisk because millions of people spent more time at home during the pandemic while Roku temporarily pulled back on international expansion and other spending.
"You could argue 2021 was a happenstance because that profitability was very much Covid-driven, whereas in 2025, there was a lot of hard work to get there," said Jason Helfstein, head of internet research at Oppenheimer & Co., referring to the company's $421 million of adjusted earnings before interest, taxes, depreciation and amortization last year.
On a quarterly basis, Roku turned a profit in the second quarter of 2025, the first time since the fourth quarter of 2021.
The company said it expects to reach $1 billion in annual free cash flow by 2028. Roku booked its largest quarter for net additions of premium subscriptions on the platform in the fourth quarter, but didn't disclose the number.
Jedda said he hopes to increase subscriptions from two options it now owns and operates: Frndly TV, a live-TV service it purchased last May, and the ad-free Howdy, an on-demand streamer it launched in August. Its flagship service is the Roku Channel, a free, ad-supported TV and movie streamer.
Roku said it is close to having 100 million streaming households as users globally, though that growth is slowing in the U.S. The company is expanding internationally, especially in Canada, Mexico and Brazil.
"We're in over half of broadband households in the U.S., and we spent a lot of money getting that scale," Jedda said.
Roku expects its operating expenses to grow by a mid-single-digit percentage this year, from a base of $2.08 billion, he said.
Roku shouldn't have much trouble maintaining full-year profitability, analysts say. The slew of new ad products should all be high-margin, even though they're still in the early stages, said Alicia Reese, a senior vice president of equity research at Wedbush Securities.
"The technology that they're adding is highly efficient, and so it should increase margin for at least the next few years," Reese said.
As part of the efficiency push, Roku is applying artificial intelligence more broadly across the workplace. For example, the company has begun using AI to analyze weekly trends in ad-related metrics, in place of analysts spending time trying to determine trends, Jedda said.
The AI tool tracks up to 50 metrics weekly, far more than the roughly 10 that analysts were previously reviewing, Jedda said. The tool will expand to cover more performance metrics for the company, he said.
"We can come in Monday morning and actually see the trends and start understanding them right from the get-go rather than trying to figure them out," Jedda said.
Write to Mark Maurer at mark.maurer@wsj.com
(END) Dow Jones Newswires
February 24, 2026 06:00 ET (11:00 GMT)
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