10-Q (b8ce8652 e3fa 4e95 8a96 005f0b1abb7e)

SECURITIES AND EXCHANGE COMMISSION

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026 or

• TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

1173 Coleman Avenue San Jose, California 95110

(408) 556-9040

(Address, including zip code, and telephone number, including area code, of Registrant's principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

As of October 26, 2026, the registrant had outstanding 132,737,674 shares of Class A common stock, $0.0001 par value per share and 16,363,648 shares of Class B common stock, $0.0001 par value per share.

As used in this Quarterly Report on Form 10-Q ("Quarterly Report"), unless the context otherwise requires, references to the following terms have the respective meaning as defined below.

Ad-supported Video on Demand (AVOD): Streaming on-demand content supported by advertising that does not charge a fee to the viewer.

Apps: Primarily refers to the direct-to-consumer streaming applications on the Roku platform (e.g., The Roku Channel or Netflix). We also use "apps" to refer to mobile applications (such as our Roku mobile app).

Average Revenue per User (ARPU): Platform revenue for the trailing four quarters divided by the average of the number of Streaming Households at the end of the current period and the end of the corresponding period in the prior year.

Demand-side platform (DSP): Programmatic advertising technology that allows advertisers and advertising agencies to buy advertising inventory across multiple platforms and publishers through one interface.

FAST: Free, ad-supported linear streaming TV, which does not include on-demand content.

Licensed Roku TV partners: TV original equipment manufacturers ("OEMs") that license the Roku TV OS and leverage our smart TV reference designs to build TVs.

Premium Subscriptions: Subscription-based streaming services (e.g., Paramount+) from content partners offered through The Roku Channel.

Roku-made TVs: TVs powered by the Roku TV OS that are designed, made, and sold by Roku. Roku-made TVs include the Roku Select, Roku Plus, and Roku Pro Series TVs, as well as Hiro Roku TVs.

Roku Experience: The user experience on the Roku platform, representing all the features that Roku builds and operates to engage, delight, and help our viewers easily find great entertainment.

Roku Home Screen: The first screen the viewer sees when they begin streaming with a Roku streaming device. The viewer is also returned to the Roku Home Screen by pressing the home button on the Roku remote or when exiting apps.

Roku Home Screen Menu: The left-hand navigation bar on the Roku Home Screen.

Roku media: Ad inventory sold by Roku, either directly or indirectly, on our home screen, in our owned and operated streaming apps, or in third-party streaming apps.

Roku Originals: Original content programming created by Roku.

Roku TV OS (or Roku platform): Roku operating system that is purpose built for TV and powers Roku streaming devices.

Roku TV models: TVs powered by the Roku TV OS that are made and sold by our licensed Roku TV partners.

Supply-side platform (SSP): Programmatic advertising technology that enables publishers to sell their advertising inventory to multiple demand sources.

Streaming: The distribution of video, music, or other media content via the internet.

Streaming device: Any device that enables TV streaming. Roku streaming devices include Roku streaming players, Roku TV models, and Roku-made TVs.

Streaming Hours: The aggregate amount of time streaming devices stream on Roku's platform in a given period. See Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, Key Performance Metrics and Non-GAAP Measures, elsewhere in this Quarterly Report for additional detail.

Streaming Households: The number of distinct user accounts that have streamed on our platform within the last 30 days of the period.

Streaming platform: The technology that delivers the viewer experience and streaming apps (e.g., The Roku Channel and Netflix) over an internet connection to a user's TV.

Streaming players: A device that connects to a TV via an HDMI connection to enable TV streaming (such as the Roku Streaming Stick, Roku Ultra, and Roku Streambar SE).

Smart TV: A television that is connected to the internet through an operating system (e.g., the Roku TV OS).

Subscription Video on Demand (SVOD): Streaming content that is available on demand, requires a paid subscription, and can be ad-supported or ad-free.

TV streaming: The act of streaming content over the internet on a TV.

The Roku Channel (TRC): A Roku owned and operated streaming service. The Roku Channel aggregates three types of content-AVOD, FAST, and Premium Subscriptions-within The Roku Channel app and through viewing experiences integrated throughout the Roku platform (e.g., Live TV on the Roku Home Screen Menu).

This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts in this Quarterly Report, including statements regarding our future results of operations and financial condition, business strategy, and plans and objectives of management for future operations, are forward-looking statements. In some cases, forward-looking statements may be identified by words such as "aim," "anticipate," "believe," "continue," "could," "design," "develop," "estimate," "expect," "intend," "maintain," "may," "plan," "potential," "predict," "project," "seek," "should," "will," "would," "target," or similar expressions and their negatives. The foregoing may not encompass all of the forward-looking statements made in this Quarterly Report.

Forward-looking statements are based on our management's beliefs and assumptions and on information currently available. They are subject to a number of known and unknown risks, uncertainties, and assumptions, including risks described in the section titled "Risk Factors" and elsewhere in this Quarterly Report, regarding, among other things:

• our financial performance, including our revenue, cost of revenue, operating expenses, profitability, and key performance metrics;

• our expectations and statements regarding the proposed transaction with Fox Corporation, including the expected timing of the proposed transaction;

• the impact of business and macroeconomic conditions and uncertainties, such as volatility in financial markets, tariffs, inflation, interest rates, recessions, geopolitical conflicts, and changes in economic and government policies, on our business, operations, and the markets and communities in which we and our advertisers, partners, licensees, manufacturers, suppliers, retailers, and viewers operate;

• our ability to attract and retain viewers and increase Streaming Hours;

• our ability to attract and retain advertisers to purchase advertising on our streaming platform;

• our ability to attract and retain TV brands and manufacturing partners to license and deploy our technology;

• our ability to produce or acquire rights to distribute popular content on our streaming platform on favorable terms, or at all, including the renewals of our existing agreements with content partners;

• changes in TV viewing habits and the growth of TV streaming;

• the growth of our relevant markets, including the growth in advertising spend on TV streaming platforms, and our ability to successfully grow our business in those markets;

• our ability to adapt to changing market conditions and technological developments, including our ability to successfully incorporate artificial intelligence into our operations, products, and services;

• our ability to develop and launch new products and provide ancillary services and support;

• our ability to integrate and realize the anticipated benefits of acquired businesses, products, and technologies;

• our ability to expand our products and services into adjacent markets and profitably scale our operations;

• our ability to compete effectively with existing competitors and new market entrants;

• our ability to successfully manage domestic and international expansion;

• our ability to attract and retain qualified employees and key personnel;

• our ability to address potential and actual cybersecurity incidents and system failures involving our products, systems, and operations;

• our ability to maintain, protect, and enhance our intellectual property;

• our ability to obtain financing on favorable terms, or at all;

• our ability to manage the selling prices of our products to increase Streaming Households, and, in turn, increase Platform revenue and Platform gross profit; and

• our ability to comply with laws and regulations that currently apply or may become applicable to our business both in the United States and internationally, such as privacy and data protection regulations, among others.

Other sections of this Quarterly Report may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report or to conform these statements to actual results or to changes in our expectations. You should read this Quarterly Report, and the documents referenced in and filed as exhibits to this Quarterly Report, with the understanding that our actual future results, levels of activity, performance, and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (roku.com/investor), our blog (roku.com/blog), U.S. Securities and Exchange Commission ("SEC") filings, webcasts, press releases, and conference calls. We use these mediums to communicate with investors and the general public about our company, our products and services, and other issues. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors, the media, and others interested in our company to review the information that we post on our investor relations website. Roku, the Roku logo, and other trade names, trademarks, or service marks of Roku appearing in this report are the property of Roku. Trade names, trademarks, and service marks of other companies appearing in this report are the property of their respective holders. Information contained on or accessible through the websites listed above is not incorporated by reference nor otherwise included in this Quarterly Report, and any references to these websites are intended to be inactive textual references only.

‌Item 1. Financial Statements‌

PART I-FINANCIAL INFORMATION

ROKU, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of

September 30, 2026 December 31, 2025

Current assets:

Short-term investments 201,816 730,213

Accounts receivable, net of allowances of $61,976 and $80,448 as of September 30, 2026 and December 31,

2025, respectively

887,822

879,871

Inventories 169,776 114,642

Total current assets 3,951,541 3,401,510

Operating lease right-of-use assets 222,564 260,341

Intangible assets, net 38,932 50,207

Other non-current assets 77,375 70,534

Liabilities and Stockholders' Equity

Accounts payable $ 349,178 $ 158,640

Deferred revenue, current portion 118,758 120,912

Deferred revenue, non-current portion 26,018 28,848

Other long-term liabilities 83,274 73,256

Commitments and contingencies (Note 13)

Common stock, $0.0001 par value 15 15

Accumulated other comprehensive income (loss) (1,060) 1,039

Total stockholders' equity 3,035,302 2,657,945

See accompanying Notes to Condensed Consolidated Financial Statements

‌1

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Nine Months Ended

See accompanying Notes to Condensed Consolidated Financial Statements

2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

See accompanying Notes to Condensed Consolidated Financial Statements

3

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Common Stock

Additional Paid-in

Accumulated Other Comprehensive

Accumulated

Total Stockholders'

4

‌ Common Stock Additional Paid-in

Accumulated Other Comprehensive

Accumulated

Total Stockholders'

See accompanying Notes to Condensed Consolidated Financial Statements

5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

See accompanying Notes to Condensed Consolidated Financial Statements 6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED

Nine Months Ended

September 30, 2026 September 30, 2025

‌See accompanying Notes to Condensed Consolidated Financial Statements 7

ROKU, INC.

‌NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. THE COMPANY

   Organization and Description of Business

   Roku, Inc. (the "Company," or "Roku"), was formed in October 2002 as Roku LLC under the laws of the State of Delaware. On February 1, 2008, Roku LLC was converted into Roku, Inc., a Delaware corporation.

   Effective in the first quarter of 2026, the Company's reportable segments changed. The Company now manages and reports its operating results through three reportable segments defined by: Advertising, Subscriptions, and Devices. Previously, the Company reviewed and managed the new Advertising and Subscriptions segments as a combined Platform segment. This change was made to reflect the Company's ongoing evaluation and monitoring of its business, including changes made to both internal reporting and the information reported to the Chief Executive Officer, who serves as Chief Operating Decision Maker ("CODM"). Prior period segment financial information has been retrospectively adjusted to reflect these changes.

   Proposed Transaction with Fox Corporation

   On June 14, 2026, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among the Company, Fox Corporation ("Fox"), and two wholly owned subsidiaries of Fox, Falcon Merger Sub 1, Inc. and Falcon Merger Sub 2, LLC. Pursuant to the Merger Agreement, and subject to the satisfaction or waiver of the conditions specified therein, Merger Sub 1 will merge with and into the Company (the "First Merger"), with the Company surviving as a wholly owned subsidiary of Fox, and immediately thereafter and as the second step in a single integrated transaction, the Company will merge with and into Merger Sub 2, with Merger Sub 2 surviving as a wholly owned subsidiary of Fox (collectively, the "Mergers"). Capitalized terms used but not defined herein have the meanings specified in the Merger Agreement.

   At the effective time of the First Merger (the "Effective Time"), each share of Class A common stock, par value $0.0001 per share, and Class B common stock, par value $0.0001 per share, of the Company (together, "Company common stock"), outstanding immediately prior to the Effective Time (subject to certain exceptions, including shares of Company common stock owned by stockholders of the Company who have properly exercised appraisal rights in accordance with Section 262 of the Delaware General Corporation Law ("Dissenting Shares")) will be converted into the right to receive (i) 0.9693 (the "Exchange Ratio") of a share of Class A common stock, par value $0.01 per share, of Fox ("Fox Class A common stock"), without interest, and (ii) $96.00 in cash (the "Per Share Cash Amount"), without interest, subject to applicable withholding taxes (clauses (i) and (ii), collectively, the "Merger Consideration"). Pursuant to the Merger Agreement, the Exchange Ratio will be increased and the Per Share Cash Amount correspondingly decreased if and to the extent necessary to account for any Dissenting Shares, such that the aggregate value (as determined in accordance with the Merger Agreement) of the stock portion of the Merger Consideration is equal to 40% of the aggregate value of the Merger Consideration (including, for such purpose, the aggregate value of the Merger Consideration that would have been payable in respect of any Dissenting Shares), as calculated pursuant to the Merger Agreement. No fractional shares of Fox Class A common stock will be issued to the Company's stockholders in connection with the Mergers, but instead a whole number of shares of Fox Class A common stock equal to the sum of all fractional shares of Fox Class A common stock that would have been issued in connection with the Mergers will be issued to the exchange agent and sold on behalf of the Company's stockholders, and the Company's stockholders will receive cash in lieu of any fractional shares of Fox Class A common stock.

   If the Mergers are consummated, the Company's Class A common stock will be delisted from The Nasdaq Global Select Market and deregistered under the Exchange Act. It is anticipated that, based on the Exchange Ratio, former Company stockholders will own approximately 27% of the combined company on a pro forma basis upon the completion of the Mergers.

   Completion of the Mergers is subject to certain closing conditions, including the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act") and the satisfaction of other customary closing conditions.

   ‌8

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation

   The condensed consolidated financial statements, which include the accounts of Roku and its wholly-owned subsidiaries, have been prepared in conformity with accounting principles generally accepted in the United States ("U.S. GAAP") and applicable rules and regulations of the SEC regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on February 13, 2026 (the "Annual Report"), and the Form 8-K filed with the SEC on June 18, 2026, which recasts applicable disclosures of the 2025 Annual Report to reflect changes in the Company's reportable segments.

   The condensed consolidated balance sheet as of December 31, 2025 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes included in the Company's Annual Report. The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the operating results to be expected for the full year or any future periods.

   All intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts reported in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period presentation.

   There have been no material changes to the accounting policies disclosed in the audited consolidated financial statements and the related notes for the year ended December 31, 2025.

   Use of Estimates

   The preparation of the Company's condensed consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses. Significant items subject to such estimates and assumptions include:

   • revenue recognition: determining the nature and timing of satisfaction of performance obligations, variable consideration, determining the standalone selling prices of performance obligations, and evaluation of customer versus vendor relationships;

   • the impairment of long-lived assets;

   • inventory reserves;

   • valuation of consideration transferred, assets acquired, and liabilities assumed in connection with business combinations (see Note 4);

   • valuation of strategic investments (see Note 9);

   • useful lives of tangible and intangible assets;

   • allowances for sales returns and sales incentives; and

   • the valuation of deferred income tax assets.

   The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ from the Company's estimates and assumptions.

   Inventories

   The Company's inventories consist primarily of finished goods and are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out basis. Provisions are made if the cost of the inventories exceeds their net realizable value. The Company evaluates inventory levels for excess and obsolete products, based on its assessment of future demand and market conditions. The Company recognized inventory provisions charged to the Cost of revenue, devices, of $41.1 million and $17.0 million for the three months ended September 30, 2026 and 2025, respectively, and $81.9 million and $27.4 million for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026 and December 31, 2025, the ending inventory reserve was $36.9 million and $29.3 million, respectively.

   9

   Recently Adopted Accounting Pronouncements

   In July 2025, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025-05"), which introduces a practical expedient for the application of the current expected credit loss model to current accounts receivable and contract assets. The Company adopted this guidance prospectively effective January 1, 2026 and elected the practical expedient provided by ASU 2025-05. In accordance with this practical expedient, for current accounts receivable and contract assets, the Company assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The adoption did not have a material impact on the Company's consolidated financial statements.

   Recent Accounting Pronouncements

   In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which simplifies the capitalization guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. The guidance is effective for fiscal years beginning after December 15, 2027 and interim periods within those fiscal years on a retrospective, modified, or prospective basis. The Company is currently in the process of evaluating the effects of the new guidance.

   ‌In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) - Disaggregation of Income Statement Expenses, which requires additional disclosures of specific expense categories in the notes to the financial statements on an annual and interim basis. The guidance is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027 on a retrospective or prospective basis. The Company is currently in the process of evaluating the effects of the new guidance.

3. REVENUE

   The Company's disaggregated revenue is represented by the three reportable segments discussed in Note 16. The contract balances include the following (in thousands):

   As of

   September 30, 2026 December 31, 2025

   Accounts receivable, net	$	887,822	$	879,871
   Contract assets (included in Prepaid expenses and other current assets)		2,999		995
   Deferred revenue:
   Deferred revenue, current portion		118,758		120,912
   Deferred revenue, non-current portion		26,018		28,848
   Total deferred revenue	$	144,776	$	149,760

   The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets are created when invoicing occurs subsequent to revenue recognition. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. The Company's contract assets are current in nature and are included in Prepaid expenses and other current assets. Contract assets increased by $2.0 million during the nine months ended September 30, 2026 due to the timing of billing to customers.

   Deferred revenue reflects consideration invoiced prior to the completion of performance obligations and revenue recognition. Deferred revenue decreased by $5.0 million during the nine months ended September 30, 2026 primarily due to timing of fulfillment of performance obligations related to advertising arrangements.

   Revenue recognized during the three and nine months ended September 30, 2026 from amounts included in total deferred revenue as of December 31, 2025 was $32.5 million and $110.8 million, respectively. Revenue recognized during the three and nine months ended September 30, 2025 from amounts included in total deferred revenue as of December 31, 2024 was $13.9 million and $74.1 million, respectively.

   Revenue allocated to remaining performance obligations represents estimated contracted revenue that has not yet been recognized which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Remaining performance obligations exclude contracts with original expected terms of one year or less. Estimated contracted revenue for these remaining performance obligations was $479.8 million as of September 30, 2026, of which the Company expects to recognize approximately 56% over the next 12 months and the remainder thereafter.

   Revenue recognized from performance obligations that were satisfied in previous periods due to changes in the estimated transaction price of the Company's revenue contracts was not significant during the three and nine months ended September 30, 2026 and 2025.

   10

   Customer J accounted for 11% of total net revenue during the three and nine months ended September 30, 2026 and 2025, which was primarily attributable to the Advertising segment.

   Revenue by geography is determined based on the location where the Company's products and services are delivered. Revenue in international markets was less than 10% in each of the periods presented.

4. ‌BUSINESS COMBINATION

   On May 9, 2025 (the "Acquisition Date"), the Company acquired all of the outstanding shares of Frndly TV, Inc. ("Frndly TV"), a subscription streaming service that offers live TV, on-demand video, and cloud-based DVR for an affordable price. The total purchase consideration (the "Purchase Consideration") was $169.8 million, consisting primarily of cash of $103.6 million and the fair value of contingent consideration of $65.8 million. The acquisition supports the Company's focus on growing Subscriptions revenue and Roku-billed subscriptions.

   The Company will pay contingent consideration of up to $75.0 million in cash upon the achievement of certain performance metrics and milestones over the two years following the Acquisition Date. See Note 9 for details on the fair value of the contingent consideration.

   The allocation of the Purchase Consideration primarily consisted of $147.9 million of goodwill, $46.0 million in intangible assets, and $24.1 million of other assets acquired and liabilities assumed. The operations of Frndly TV are included in the Company's operating results beginning on the Acquisition Date. Historical and pro forma disclosures are not provided as the historical operating results of Frndly TV were not material.

5. ‌GOODWILL AND INTANGIBLE ASSETS

Goodwill represents the excess of purchase consideration in a business combination over the fair value of tangible and intangible assets acquired net of the liabilities assumed. As of September 30, 2026 and December 31, 2025, the Company has $188.8 million of goodwill related to the Advertising segment and $120.6 million of goodwill related to the Subscriptions segment.

The following tables summarize the Company's intangible assets for the periods presented (in thousands, except years):

As of September 30, 2026

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

Weighted-Average Useful Lives

(in years)

The Company amortizes the fair value of intangible assets over their estimated useful lives in proportion to the economic benefits received. Amortization expense related to intangible assets was approximately $3.6 million and $8.0 million for the three months ended September 30, 2026 and 2025, respectively, and $11.3 million and $17.0 million for the nine months ended September 30, 2026 and 2025, respectively.

11

The Company recorded amortization of developed technology in Cost of revenue, advertising, recorded amortization of customer relationships and tradename in Sales and marketing expenses, and recorded amortization of patents in General and administrative expenses in the condensed consolidated statements of operations for all periods presented.

As of September 30, 2026, the estimated future amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands):

Year Ending December 31,

Accounts Receivable, net: Accounts receivable, net consisted of the following (in thousands):

Customers J and B accounted for 12% and 11%, respectively, of the Company's accounts receivable, net balance as of September 30, 2026, and each accounted for 11% of the Company's accounts receivable, net balance as of December 31, 2025.

Property and Equipment, net: Property and equipment, net consisted of the following (in thousands):

As of

September 30, 2026 December 31, 2025

Depreciation and amortization expense for property and equipment assets was approximately $10.7 million and $11.5 million for the three months ended September 30, 2026 and 2025, respectively, and $35.0 million and $34.6 million for the nine months ended September 30, 2026 and 2025, respectively.

Impairment charges for property and equipment assets were $2.7 million during the three and nine months ended September 30, 2026. See Note 10 for details. There were no property and equipment impairment charges during the three and nine months ended September 30, 2025.

12

Accrued Liabilities: Accrued liabilities consisted of the following (in thousands):

Amortization of content assets is primarily included in Cost of revenue, advertising in the condensed consolidated statements of operations and is as follows (in thousands):

Three Months Ended Nine Months Ended

September 30, 2026 September 30, 2025 September 30, 2026 September 30, 2025

‌13

1. STRATEGIC INVESTMENTS Investment in Convertible Promissory Notes

   In June 2022, the Company agreed to provide financing of up to $60.0 million in the aggregate in the form of an investment in the convertible promissory notes of a counterparty with whom the Company has a commercial relationship. The convertible promissory notes accrued interest at 5% per annum. During the year ended December 31, 2025, the Company received repayment in full from the counterparty totaling $50.0 million plus interest.

   The convertible promissory notes contained certain redemption features that met the definition of embedded derivatives and required bifurcation. The Company elected to apply the fair value option and account for the hybrid instrument containing the host contract and the embedded derivatives at fair value as a single instrument, with any subsequent changes in fair value included in Other income, net in the condensed consolidated statements of operations. See Note 9 for additional details on the fair value of the convertible promissory notes.

   Investment in Preferred Stock

   ‌In September 2024, the Company invested $20.0 million in cash in exchange for preferred stock in a privately-held company. The Company elected to apply the measurement alternative for equity securities without readily determinable fair values as there are no quoted market prices for the preferred stock. The investment is measured at cost and adjusted to fair value when there is an observable price change from orderly transactions of identical or similar investments, and assessed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. There were no adjustments recognized in the three and nine months ended September 30, 2026. As of September 30, 2026, the carrying value of the investment was $20.0 million, and is included within Other non-current assets on the condensed consolidated balance sheets.

2. FAIR VALUE DISCLOSURE

   The Company's financial assets and liabilities measured at fair value on a recurring basis are as follows (in thousands):

   As of September 30, 2026

   Fair Value

   Level 1

   Level 2

   Level 3

   Assets:

   Cash and cash equivalents:

   Cash $ 1,408,753	$ 1,408,753	$ -	$	-
   Money market funds 1,110,000	1,110,000	-		-
   Short-term investments:
   Time deposits 201,816	-	201,816		-
   Total assets measured and recorded at fair value $ 2,720,569	$ 2,518,753	$ 201,816	$	-

   Liabilities:

   Accrued liabilities:

Contingent consideration $ 33,944 $ - $ - $ 33,944

14

As of December 31, 2025

Fair Value

Level 1

Level 2

Level 3

Assets:

Cash and cash equivalents:

Liabilities:

Contingent consideration $ 28,110 $ - $ - $ 28,110

The following table reflects the changes in the fair value of the contingent consideration measured using Level 3 inputs (in thousands):

Three Months Ended Nine Months Ended

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal market (or most advantageous market, in the absence of a principal market) for the asset or liability in an orderly transaction between market participants at the measurement date. Further, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs in measuring fair value, and utilizes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value.

The three levels of inputs used to measure fair value are as follows:

Level 1-Quoted prices in active markets for identical assets or liabilities. Financial assets and liabilities measured using Level 1 inputs include cash, cash equivalents, restricted cash, accounts receivable, prepaid expenses, accounts payable, and accrued liabilities.

Level 2-Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means. Financial assets measured using Level 2 inputs include time deposits as of September 30, 2026 and December 31, 2025.

Level 3-Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities and reflect the Company's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The Company measured its strategic investment in convertible promissory notes using Level 3 inputs. The fair value of the strategic investment in convertible promissory notes on the date of purchase was determined to be equal to its principal amount. The Company recorded an unrealized gain of $2.8

million and an unrealized loss of $0.3 million in Other income, net related to the change in the fair value of the strategic investment in convertible promissory notes for the three and nine months ended September 30, 2025, respectively.

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‌The Company classified the strategic investment in convertible promissory notes as Level 3 due to the lack of relevant observable market data over fair value inputs. The fair value of the strategic investment in convertible promissory notes was estimated using a scenario-based probability weighted discounted cash flow model. Significant assumptions include the discount rate, and the timing and probability weighting of the various redemption scenarios that impact the settlement of the strategic investment in convertible promissory notes.

The contingent consideration is related to the Company's acquisition of Frndly TV in May 2025 (refer to Note 4). As of the Acquisition Date, the Company measured its contingent consideration using Level 3 inputs. The fair value of the contingent consideration on the Acquisition Date was determined to be $65.8 million. The contingent consideration is subsequently remeasured to fair value at each reporting date until the contingency is resolved, with any changes in fair value included in General and administrative expenses in the condensed consolidated statements of operations.

The Company classified the contingent consideration as Level 3 due to the lack of relevant observable market data over fair value inputs. The fair value of the contingent consideration was estimated using a probability weighted discounted cash flow model. Significant assumptions include the probability of achieving certain performance metrics and milestones and the discount rate. The estimated fair value is based upon assumptions believed to be reasonable but which are uncertain and involve significant judgment by management. Favorable or unfavorable changes in expectations of achieving the performance metrics and milestones would result in corresponding increases or decreases in the fair value measurement, while increases or decreases in discount rates would have inverse impacts on the fair value measurement.

Assets and liabilities that are measured at fair value on a non-recurring basis

Non-financial assets such as goodwill, intangible assets, property and equipment, operating lease right-of-use assets, and content assets are evaluated for impairment and adjusted to fair value using Level 3 inputs, only when impairment is recognized.

The Company measured the intangible assets acquired from the Frndly TV acquisition at fair value using Level 3 inputs. The fair value of the customer relationships has been estimated using the multi-period-excess-earnings method. The key valuation assumptions include the Company's estimates of customer attrition rates, expected future revenue, profit margins, and discount rate. The fair value of the tradename has been estimated using the relief-from-royalty method. The key valuation assumptions include the Company's estimates of expected future revenue, royalty rate, and discount rate.

The fair value of the impaired operating lease right-of-use assets and property and equipment were estimated using discounted cash flow models, or the income approach, based on market participant assumptions with Level 3 inputs. The significant assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods, and discount rates that reflect the level of risk associated with the expected future cash flows.

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1. LEASES

   The Company has entered into operating leases primarily for office real estate. The leases have remaining terms ranging from less than one year to seven years and may include options to extend or terminate the lease. The depreciable life of operating lease right-of-use assets is limited by the expected lease term.

   The components of lease expense are as follows (in thousands):

   Three Months Ended Nine Months Ended

   	September 30, 2026	September 30, 2025		September 30, 2026	September 30, 2025
   Operating lease expense	$ 17,254	$ 18,364		$ 52,404	$ 54,584
   Variable lease expense	6,595	6,944		19,604	19,026
   Sublease income	(5,994)	(6,200)		(18,368)	(17,302)
   Total operating lease expense	$ 17,855	$ 19,108		$ 53,640	$ 56,308

   Supplemental cash flow information related to leases is as follows (in thousands):

   Three Months Ended Nine Months Ended

   September 30, 2026

   September 30, 2025

   September 30, 2026

   September 30, 2025

   Cash paid for amounts included in the measurement of lease liabilities:

   Operating cash outflows from operating leases (1) $ 50,637 $ 27,462 $ 116,138 $ 77,749

   Right-of-use assets obtained in exchange for lease obligations:

Operating leases $ 2,812 $ 53 $ 9,908 $ 7,927

(1) Includes any termination payments associated with lease exits.

During the three months ended September 30, 2026, the Company terminated a portion of a previously impaired corporate office lease and recorded an impairment credit of $22.3 million within operating expense on the condensed consolidated statements of operations and comprehensive income. This credit was comprised of a $56.6 million removal of the remaining lease liability, partially offset by $5.4 million of additional right-of-use asset impairment charges, $2.7 million of property and equipment impairment charges, and $26.2 million of termination fees and other charges. There were no right-of-use asset impairment charges during the three months ended September 30, 2025.

The Company recorded operating lease right-of-use asset impairment charges of $10.3 million and $2.9 million related to the ceased use of certain of its corporate facilities during the nine months ended September 30, 2026, and 2025, respectively.

Supplemental balance sheet information related to leases is as follows (in thousands, except lease term and discount rate):

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Future lease payments under operating leases as of September 30, 2026 are as follows (in thousands):

(1) Non-cancelable sublease proceeds for the fiscal years ending December 31, 2026 (remaining 3 months), 2027, 2028, and 2029 of $4.1 million, $16.7 million, $16.7 million, and $10.6 million, respectively, are not included in the table above.

1. ‌DEBT

   On September 16, 2024, the Company entered into a Credit Agreement, by and among the Company, as borrower, certain of the Company's subsidiaries, as guarantors, the lenders and issuing banks party thereto, and with Citibank N.A., as administrative agent (the "Credit Agreement"), which provides for (i) a five-year revolving credit facility in an aggregate principal amount of up to $300.0 million, and (ii) an uncommitted increase option of up to an additional $300.0 million exercisable upon the satisfaction of certain customary conditions. The Credit Agreement provides for a $100.0 million sub-facility for the issuance of letters of credit, and certain existing letters of credit were deemed outstanding under this facility. The Credit Agreement will mature on September 16, 2029. Proceeds from the Credit Agreement may be used for general corporate purposes, including to finance working capital requirements.

   The Company's obligations under the Credit Agreement are secured by substantially all the assets of the Company and its subsidiaries that are guarantors under the Credit Agreement. The Company may prepay, and in certain circumstances, would be required to prepay, loans under the Credit Agreement without payment of a premium. The Credit Agreement also contains customary representations and warranties, customary affirmative and negative covenants, financial covenants requiring the maintenance of a minimum interest coverage ratio and a maximum total net leverage ratio, as well as customary events of default, the occurrence of which could result in amounts borrowed under the Credit Agreement becoming due and payable and remaining commitments terminated prior to its scheduled September 16, 2029 termination date.

   Debt issuance costs incurred in connection with the Company's Credit Agreement, which are recorded in Prepaid expenses and other current assets and Other non-current assets, are amortized over the five-year term and recognized as a component of interest expense in the condensed consolidated statements of operations.

   The Company had outstanding letters of credit secured by the Credit Agreement of $32.2 million as of September 30, 2026. As of September 30, 2026, the Company had not borrowed against the Credit Agreement, and the Company was in compliance with all of the covenants of the Credit Agreement.

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2. STOCKHOLDERS' EQUITY

The Company has 10 million shares of undesignated preferred stock authorized but not issued with rights and preferences determined by the Company's Board of Directors (the "Board") at the time of issuance of such shares. As of September 30, 2026 and December 31, 2025, there were no shares of preferred stock issued and outstanding.

The Company has two classes of authorized common stock, Class A common stock and Class B common stock. Holders of Class A common stock are entitled to one vote for each share of Class A common stock held on all matters submitted to a vote of stockholders and holders of Class B common stock are entitled to ten votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Except with respect to voting, the rights of the holders of Class A and Class B common stock are identical. Shares of Class B common stock are voluntarily convertible into shares of Class A common stock at the option of the holder and are generally automatically converted into shares of the Company's Class A common stock upon sale or transfer. Shares issued in connection with exercises of stock options or vesting of restricted stock units are generally automatically converted into shares of the Company's Class A common stock.

In August 2025, the Company began repurchasing shares of the Company's Class A common stock under a stock repurchase program approved by the Board pursuant to which the Company was authorized to repurchase up to $400 million of the Company's Class A common stock through December 31, 2026. The program did not obligate the Company to acquire any amount of Class A common stock, and the timing and total amount of share repurchases depended on general market conditions, the trading price of the Company's Class A common stock, corporate and regulatory requirements, the availability of funds, other investment opportunities, and other considerations. Repurchases could be executed through open market transactions at prevailing market prices, including pursuant to trading plans that comply with the requirements of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, or through other means.

All repurchases were made using cash resources, and shares purchased were immediately retired. In connection with its entry into the Merger Agreement, the Company suspended its stock repurchase program during the second quarter of fiscal 2026.

The following table summarizes the share repurchase activity under the Company's stock repurchase program during the nine months ended September 30, 2026 (in thousands, except share and per share data):

Total Number of Shares

Purchased Average Price Per Share Amount

As of September 30, 2026, the Company's common stock reserved for issuance in the future is as follows (in thousands):

* The Company has not issued any common stock pursuant to the 2017 Employee Stock Purchase Plan.

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The Company currently grants equity awards under the Amended and Restated 2017 Equity Incentive Plan (the "2017 Plan"). The 2017 Plan became effective September 2017 in connection with the Company's initial public offering ("IPO"). The 2017 Plan provides for the grant of incentive stock options to the Company's employees and for the grant of non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance stock awards, performance cash awards, and other forms of equity compensation to the Company's employees, directors and consultants. The outstanding equity relates to the 2017 Plan and the 2008 Equity Incentive Plan ("2008 Plan"), a pre-IPO plan. No additional equity grants have been made pursuant to the 2008 Plan subsequent to the IPO.

The equity awards granted under the 2017 Plan vest subject to continuous service. Stock options granted under the 2017 Plan generally are granted at a price per share equivalent to the fair market value on the date of grant. Recipients of incentive stock option grants who possess more than 10% of the combined voting power of the Company are subject to certain limitations, and incentive stock options granted to such recipients are at a price no less than 110% of the fair market value at the date of grant.

Restricted stock unit activity for the nine months ended September 30, 2026 is as follows (in thousands, except per share data):

Number of Shares

Weighted-Average Grant Date Fair Value per Share

Awarded 2,259 151.08

Forfeited (399) 80.95

Balance as of September 30, 2026 5,066 $ 109.46

As of September 30, 2026, the Company had $510.5 million of unrecognized stock-based compensation expense related to unvested restricted stock units that is expected to be recognized over a weighted-average period of approximately 1.9 years.

Stock option activity for the nine months ended September 30, 2026 is as follows (in thousands, except per share data and years):

Weighted-Average

As of September 30, 2026, the Company had $18.7 million of unrecognized stock-based compensation expense related to unvested stock options that is expected to be recognized over a weighted-average period of approximately 1.2 years.

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The Company measures the cost of employee services received in exchange for an equity award based on the grant date fair value of the award. Stock options granted to employees generally vest over one to four years and have a term of ten years. Restricted stock units generally vest over one to four years.

The following table presents the total stock-based compensation expense for the three and nine months ended September 30, 2026 and 2025 (in thousands):

Three Months Ended Nine Months Ended

The Company has purchase commitments with various parties to purchase products and services such as licensed intellectual property and content, manufacturing supplier agreements, and data center capacity and other goods and services.

The following table presents details of the aggregate future purchase commitments as of September 30, 2026 (in thousands):

Years Ended December 31,

The Company accounts for loss contingencies, including liabilities for intellectual property licensing and other claims, when it believes such losses are probable and reasonably estimable. These contingencies are reviewed at least quarterly and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel, and other information and events. The resolution of these contingencies and of other legal proceedings can be, however, inherently unpredictable and subject to significant uncertainties.

The Company is, and may become, subject to various lawsuits, stockholder derivative actions, class action lawsuits, individual or mass arbitration proceedings, and other types of legal proceedings, as well as other disputes, claims, and regulatory or governmental inquiries and investigations in the ordinary course of business, relating to commercial, contract, consumer protection, privacy, data protection, intellectual property, tax, employment, corporate governance, and other matters. Although the results of these legal proceedings, disputes, claims, and inquiries and investigations cannot be predicted with certainty, the Company does not believe that the final outcome of any matters that it is currently involved in is reasonably likely to have a material adverse effect on its business, financial condition, or results of operations. Regardless of the outcome, such legal proceedings, disputes, claims, and inquiries and investigations can have an adverse impact on the Company because of legal fees, other litigation costs, and settlement costs, diversion of management resources, reputational harm, and other factors. During the three and nine months ended September 30, 2026 and 2025, the Company did not have any loss contingencies that were material.

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In the ordinary course of business, the Company has entered into contractual arrangements which provide indemnification provisions of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company's breach of such agreements and out of intellectual property infringement claims made by third parties. The Company's obligations under these agreements may be limited in terms of time or amount, and in some instances, the Company may have recourse against third parties for certain payments. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers that will require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers.

It is not possible to determine the maximum potential amount under these indemnification obligations due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each agreement. To date, the Company has not incurred any material costs as a result of such obligations and has not accrued any liabilities related to such obligations in the condensed consolidated financial statements.

1. ‌INCOME TAXES

   Income tax expense was $4.0 million and $13.2 million for the three months ended September 30, 2026 and 2025, respectively. Income tax expense was $12.1 million and income tax benefit was $5.7 million for the nine months ended September 30, 2026 and 2025, respectively.

   The decrease in income tax expense for the three months ended September 30, 2026, as compared to the three months ended September 30, 2025, was primarily attributable to a cumulative estimated annual effective rate adjustment recorded in the third quarter of 2025 following the enactment of the One Big Beautiful Bill Act. The increase in income tax expense for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, was primarily attributable to higher pre-tax book income.

   ‌A valuation allowance must be established for deferred tax assets when it is more likely than not that they will not be realized. As of September 30, 2026, the Company has a full valuation allowance against its net deferred tax assets in the United States. Given the Company's current and anticipated future earnings, the Company believes that there is a reasonable possibility that the valuation allowance against these net deferred tax assets may be reversed within the next twelve months. The exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that the Company actually achieves.

2. NET INCOME PER SHARE

   The Company's basic net income per share is calculated by dividing the net income by the weighted-average number of shares of common stock outstanding for the period. The Company uses the two-class method to calculate net income per share. Except with respect to certain voting, conversion, and transfer rights and as otherwise expressly provided in the Company's amended and restated certificate of incorporation or required by applicable law, shares of the Company's Class A common stock and Class B common stock have the same rights and privileges and rank equally, share ratably, and are identical in all respects as to all matters. Accordingly, basic and diluted net income per share are the same for both classes.

   For purposes of the calculation of diluted net income per share, options to purchase common stock and restricted stock units are considered common stock equivalents. Dilutive shares of common stock are determined by applying the treasury stock method.

   22

   The following table presents the calculation of basic and diluted net income per share (in thousands, except per share data):

   Three Months Ended Nine Months Ended

   		September 30, 2026		September 30, 2025			September 30, 2026		September 30, 2025
   Numerator:
   Net income	$	183,339	$	24,812		$	433,255	$	7,884
   Denominator:

   Basic net income per share:

   Weighted-average common shares outstanding - basic	148,646		147,466		148,047			146,855
   Dilutive effect of common stock equivalents	3,990		4,114		3,809			3,594
   Weighted-average common shares outstanding - diluted	152,636		151,580		151,856			150,449
   Net income per share - basic	$	1.23	$	0.17		$	2.93	$	0.05
   Net income per share - diluted	$	1.20	$	0.16		$	2.85	$	0.05

   ‌Common stock equivalents (comprised of stock options and restricted stock units) excluded from the calculation of diluted net income per share because of their anti-dilutive effect were 2.0 million and 1.6 million for the three months ended September 30, 2026 and 2025, respectively, and 1.5 million and 2.9 million for the nine months ended September 30, 2026 and 2025, respectively.

3. SEGMENT INFORMATION

An operating segment is defined as a component of an entity for which discrete financial information is available that is evaluated regularly by the CODM for purposes of allocating resources and evaluating financial performance. The Company's CODM is its Chief Executive Officer. The CODM evaluates performance and makes decisions about allocating resources to its operating segments based on financial information presented on a consolidated basis and on gross profit for each operating segment.

Beginning in the first quarter of 2026, the Company changed its internal reporting structure and the CODM began receiving disaggregated financial information that allows him to allocate resources and evaluate performance between three operating segments: Advertising, Subscriptions, and Devices. As such, the Company now has three reportable segments. The Company's prior period amounts have been retrospectively adjusted to reflect the disaggregation of the Company's previous Platform operating segment into the Advertising and Subscriptions operating segments. There are no changes to the consolidated financial statements for any prior periods.

Descriptions of the Company's three reportable segments are as follows:

Advertising revenue is generated from the sale of digital advertising, including direct and programmatic video advertising, ads integrated into the Company's user interface ("UI"), and related services.

Subscriptions revenue is generated from the sale of subscriptions to end users, including the sale of Premium Subscriptions, the sale of owned and operated subscription services, and revenue from content distribution arrangements, which primarily includes subscription revenue shares from content partners and the sale of branded app buttons on remote controls.

Devices revenue is generated from the sale of streaming players, Roku-made TVs, smart home products and services, audio products, and related accessories.

For all reportable segments, Cost of revenue is the significant segment expense that is regularly provided to the CODM. The Company reports its financial results consistent with the manner in which financial information is viewed by management for decision-making purposes. The Company does not manage operating expenses such as research and development, sales and marketing, and general and administrative expenses at the segment level. The Company does not allocate property and equipment or any other assets or capital expenditures to reportable segments.

The following table presents financial information for each of the Company's reportable segments (in thousands):

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Three Months Ended Nine Months Ended

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report and with our audited consolidated financial statements included in our Annual Report for the year ended December 31, 2025, filed on February 13, 2026 with the SEC (the "Annual Report"). In addition to historical financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, beliefs, and expectations, and involve risks and uncertainties. Factors that could cause or contribute to these differences include those discussed below and in our Annual Report.

Effective in the first quarter of 2026, our reportable segments changed. We now manage and report our operating results through three reportable segments: Advertising, Subscriptions, and Devices. Previously, we reviewed and managed the new Advertising and Subscriptions segments as a combined Platform segment. This change was made to reflect our ongoing evaluation and monitoring of our business, including changes made to both our internal reporting and the information reported to the CODM. Prior period segment financial information has been retrospectively adjusted to reflect these changes.

Advertising revenue is generated from the sale of digital advertising, including direct and programmatic video advertising, ads integrated into our user interface ("UI"), and related services.

Subscriptions revenue is generated from the sale of subscriptions to end users, including the sale of Premium Subscriptions, the sale of owned and operated subscription services, and revenue from content distribution arrangements, which primarily includes subscription revenue shares from content partners and the sale of branded app buttons on remote controls.

"Platform" revenue, cost of revenue, and gross profit reflect the combined revenue, cost of revenue, and gross profit attributable to our Advertising and Subscriptions segments.

Devices revenue is generated from the sale of streaming players, Roku-made TVs, smart home products and services, audio products, and related accessories. We expect to continue to manage the average selling prices of Roku streaming devices in an effort to sell more devices, which we believe will increase our Streaming Households. We expect that this trade off from Devices gross profit or loss to grow Streaming Households should result in increased total Platform revenue and total Platform gross profit over time.

On June 14, 2026, we entered into the Merger Agreement with Fox. Refer to Note 1 of the Notes to Condensed Consolidated Financial Statements for additional information regarding the transaction.

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Our business is subject to risks related to the evolving macroeconomic environment, including the effects of increased volatility in financial markets, higher inflation and interest rates, potential economic slowdown or recession, geopolitical developments, such as the conflict in the Middle East, changes in economic or government policies, including the unknown impact of tariffs, changing global regulations, global supply chain constraints, including the scarcity of, or increased prices for, key components such as memory chips, and the overall uncertainty surrounding international trade relations. While we intend to remain vigilant in monitoring the impacts of these circumstances on our business and adapt accordingly, the effects of these macroeconomic factors on our business, results of operations, and financial condition remain largely uncertain. See Item 1A, Risk Factors, and the Note Regarding Forward Looking Statements elsewhere in this Quarterly Report for additional details.

Since our IPO in 2017, the streaming TV industry has evolved meaningfully, with Americans now spending significantly more TV time streaming than watching traditional TV. Our business has also grown and evolved, and we are now primarily focused on growing Platform revenue and profitability.

The key performance metrics ("KPMs") we use to evaluate our business, measure our performance, develop financial forecasts and make strategic decisions are Streaming Hours, Platform revenue, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), and Free Cash Flow.

We believe the number of Streaming Hours on our platform is an effective measure of user engagement and that the growth in the number of hours of content streamed across our platform reflects our success in addressing the growing user demand for TV streaming. We define Streaming Hours as the aggregate amount of time Roku streaming devices stream content on our platform in a given period. Hours streamed from The Roku Channel on non-Roku platforms are not included in this metric. Additionally, smart home products do not contribute to our Streaming Hours.

Additionally, we believe that over time, increasing user engagement on our streaming platform increases our platform monetization because we earn Platform revenue from various forms of user engagement, including advertising, as well as revenue shares from subscriptions and transactional video on-demand. However, our revenue from content partners is not tied to the hours streamed on their streaming apps, and the number of Streaming Hours does not correlate to revenue earned from such content partners or ARPU on a period-by-period basis. Moreover, Streaming Hours on our platform are measured whenever a Roku streaming device is streaming content, whether a viewer is actively watching or not. For example, if a Roku player is connected to a TV, and the viewer turns off the TV, steps away, or falls asleep and does not stop or pause the player, then the particular streaming app may continue to play content for a period of time determined by the streaming app. We believe that this also occurs across a wide variety of non-Roku streaming devices and other set-top boxes.

Since 2020, all of our Roku streaming devices include a Roku TV OS feature that is designed to identify when content has been continuously streaming on an app for an extended period of time without user interaction. This feature, which we refer to as "Are you still watching," periodically prompts the user to confirm that they are still watching the selected app and closes the app if the user does not respond affirmatively. We believe that the implementation of this feature across the Roku platform benefits us, our customers, content partners, and advertisers. Some of our leading content partners, including Netflix, also have implemented similar features within their apps. This Roku TV OS feature supplements these app features. This feature has not had and is not expected to have a material impact on our financial performance.

We streamed 39.9 billion and 36.5 billion hours during the three months ended September 30, 2026 and 2025, respectively, reflecting an increase of

9%.

We use Platform revenue as a primary metric to measure the performance of our business because it represents our ability to successfully monetize

our platform. Platform revenue includes revenue from both our Advertising and Subscriptions segments and its growth is one of our strategic priorities. Platform revenue was $1,308.3 million and $1,064.6 million for the three months ended September 30, 2026 and 2025, respectively.

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We use Adjusted EBITDA as a primary metric to measure the performance of our business because it represents our ability to successfully manage profitability. Our goal is to grow Adjusted EBITDA over time, driving continued growth in stockholder value.

Adjusted EBITDA is a non-GAAP financial measure. The Adjusted EBITDA reconciliation excludes total other income, net, stock-based compensation expense, depreciation and amortization, restructuring charges, merger-related costs, and income tax expense (benefit) from the net income of the period. We believe Adjusted EBITDA is useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, this non-GAAP financial measure has limitations, and should not be considered in isolation or as a substitute for our GAAP financial information, such as GAAP net income. In addition, Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.

The following table presents a reconciliation of Adjusted EBITDA to the most directly comparable GAAP financial measure for each of the periods indicated (in thousands):

Three Months Ended Nine Months Ended

(1) Restructuring charges for the three and nine months ended September 30, 2026 include a credit of $22.3 million for terminating a portion of a corporate lease that was previously impaired in prior year restructuring efforts. See Note 10 for further details.

(2) The merger-related costs for the three and nine months ended September 30, 2026 were related to our proposed transaction with Fox. Refer to Note 1 to our condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report.

We use Free Cash Flow as a primary metric to measure the performance of our business because we believe maximizing Free Cash Flow helps indicate the financial strength of our business, as well as provide an indication of cash generated or (used) by the business. Our goal is to continuously increase Free Cash Flow over time. We define Free Cash Flow as our trailing 12-month ("TTM") cash flows from operating activities excluding purchases of property and equipment and the effects of exchange rates on cash.

Our Free Cash Flow was $795.7 million and $443.0 million for the TTM periods ended September 30, 2026 and 2025, respectively.

Free Cash Flow is a non-GAAP financial measure. The Free Cash Flow reconciliation excludes purchases of property and equipment and effects of exchange rates on cash from the cash flows from operating activities, in each case where applicable. We believe Free Cash Flow is useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, this non-GAAP financial measure has limitations, and should not be considered in isolation or as a substitute for our GAAP financial information, such as GAAP cash flows from operating activities. For additional information about cash flows from operating activities, see "Liquidity and Capital Resources" below. In addition, Free Cash Flow may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.

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The following table presents a reconciliation of Free Cash Flow to the most directly comparable GAAP financial measure for each of the periods indicated (in thousands):

Trailing Twelve Months Ended September 30, 2026 September 30, 2025

Free cash flow (TTM) $ 795,749 $ 443,007

Advertising Revenue

We generate Advertising revenue from the sale of digital advertising including direct and programmatic video advertising, ads integrated into our UI, and related services. Our ad inventory primarily includes video ad inventory from AVOD content in The Roku Channel, native ads throughout the Roku Experience, as well as ad inventory we obtain as consideration from our streaming services distribution agreements with our content partners.

We generate Subscriptions revenue primarily from the sale of subscriptions to end users, including the sale of Premium Subscriptions, the sale of owned and operated subscription services, and revenue from content distribution arrangements, which primarily includes subscription revenue shares from content partners and the sale of branded app buttons on remote controls.

The aggregate of both our Advertising and Subscriptions revenue is collectively referred to as our Platform revenue and represents our ability to monetize our platform. To date, we have generated most of our Platform revenue in the United States.

We generate Devices revenue from the sale of streaming players, Roku-made TVs, smart home products and services, audio products, and related accessories. We generate most of our Devices revenue in the United States. In our international markets, we primarily sell our devices through wholesale distributors which, in turn, sell to retailers.

Cost of Revenue, Advertising

Cost of revenue, advertising primarily consists of costs associated with acquiring advertising inventory, content amortization costs for both licensed and produced content, and costs associated with the delivery of our services that primarily include costs of third-party cloud services.

Cost of revenue, subscriptions primarily consists of costs for licensed Premium Subscriptions, revenue share payments on licensed content, and payment processing fees.

The aggregate of both our Advertising and Subscriptions cost of revenue is collectively referred to as our Cost of revenue, platform and represents the cost to monetize our platform.

Cost of revenue, devices is comprised mostly of manufacturing costs payable to third-party manufacturers for devices we sell which include streaming players, Roku-made TVs, audio products and smart home products. Cost of revenue, devices also includes technology licenses or royalty fees on devices we sell, inbound and outbound freight, duty and logistics costs, third-party packaging, inventory provisions, and allocated overhead costs related to facilities, third-party cloud services, and salaries, benefits, and stock-based compensation for operations personnel.

Research and development expenses consist primarily of salaries, benefits, and stock-based compensation for our development teams as well as outsourced development expenses. In addition, research and development expenses include allocated facilities and overhead expenses.

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Sales and marketing expenses consist primarily of salaries, benefits, commissions, and stock-based compensation for our employees engaged in sales and sales support, marketing, communications, data science and analytics, business development, product management, and partner support functions. Sales and marketing expenses also include marketing, retail and merchandising expenses, consulting and outside services, and allocated facilities and overhead expenses.

General and administrative expenses consist primarily of salaries, benefits, and stock-based compensation for our finance, legal, information technology, human resources, and other administrative personnel. General and administrative expenses also include outside legal, accounting, and other professional service fees as well as allocated facilities and overhead expenses.

Other income, net primarily consists of interest income on cash and cash equivalents and short-term investments, foreign currency remeasurement, transaction gains and losses, and net change in the fair value of our strategic investments.

Our income tax expense (benefit) consists primarily of income tax expense in certain foreign jurisdictions where we conduct business and income tax expense (benefit) in the United States. We have a full valuation allowance against net deferred tax assets in the United States as of September 30, 2026. Given our current and anticipated future earnings, we believe that there is a reasonable possibility that the valuation allowance against these net deferred tax assets may be reversed within the next twelve months. The exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that the Company actually achieves.

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The following table sets forth selected condensed consolidated statements of operations data as a percentage of total revenue for each of the periods indicated.

Three Months Ended Nine Months Ended

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Three Months Ended Nine Months Ended

Advertising

Advertising revenue increased by $136.2 million, or 23%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to an increase in video ad impressions delivered. Video impressions increased by 33%, driven by higher user engagement and growth in streaming hours on our platform. This increase was partially offset by a decrease in the average price per impression of 7%, which was driven by changes in product and country mix.

Advertising revenue increased by $399.8 million, or 25%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to an increase in video ad impressions delivered. Video impressions increased by 42%, driven by higher user engagement and growth in streaming hours on our platform. This increase was partially offset by a decrease in the average price per impression of 11%, which was driven by changes in product and country mix.

Subscriptions

Subscriptions revenue increased by $107.5 million, or 23%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily due to a 7% increase in the number of subscriptions and a 27% increase in the average price per subscription. Additionally, the 23% growth was driven in part by the expansion of our owned and operated subscription services, including Howdy, launched in August 2025.

Subscriptions revenue increased by $339.8 million, or 26%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily due to a 10% increase in the number of subscriptions and a 26% increase in the average price per subscription. Additionally, the 26% overall growth was driven in part by the expansion of our owned and operated subscription services, including Frndly TV, acquired in May 2025, and Howdy, launched in August 2025.

Devices

Devices revenue increased by $47.7 million, or 33%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The volume of all devices shipped decreased by 21% driven by lower sales of streaming players, while the average selling price of all devices shipped increased 71%, due to higher sales of Roku-made TVs in the comparable periods.

Devices revenue increased by $23.7 million, or 6%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The volume of all devices shipped decreased by 22% driven by lower sales of streaming players, while the average selling price of all devices shipped increased 34%, due to higher sales of Roku-made TVs in the comparable periods.

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Three Months Ended Nine Months Ended

Advertising

Cost of revenue, advertising increased by $22.3 million, or 9%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily driven by a $17.8 million increase in the costs of acquiring and delivering licensed content for TRC due to an increase in user engagement and video ad impressions delivered, and an $8.8 million increase in content amortization.

Cost of revenue, advertising increased by $67.0 million, or 10%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was primarily driven by a $79.3 million increase in the costs of acquiring and delivering licensed content for TRC due to an increase in user engagement and video ad impressions delivered, partially offset by a $7.0 million decrease in intangible amortization and a $5.3 million decrease in content amortization.

Subscriptions

Cost of revenue, subscriptions increased by $72.0 million, or 27%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025, primarily driven by higher licensing and content costs. The increase in licensing and content costs includes amounts related to Howdy, launched in August 2025.

Cost of revenue, subscriptions increased by $254.4 million, or 36%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025, primarily driven by higher licensing and content costs. The increase in licensing and content costs includes amounts related to Frndly TV, acquired in May 2025, and Howdy, launched in August 2025.

Devices

Cost of revenue, devices increased by $73.4 million, or 43%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025 due to higher manufacturing costs.

Cost of revenue, devices increased by $22.3 million, or 5%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was driven by higher manufacturing costs of $46.5 million and a $17.8 million increase in inventory reserves, which were partially offset by lower freight costs of $37.1 million, primarily due to an International Emergency Economic Powers Act ("IEEPA") refund for tariff payments made in previous quarters.

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Three Months Ended Nine Months Ended

Research and development

Research and development expenses increased by $4.6 million, or 3%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily driven by higher cloud hosting and consulting expenses of $9.8 million, partially offset by lower personnel expenses of $5.4 million due to decreases in stock-based compensation expense.

Research and development expenses increased by $11.2 million, or 2%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was driven by higher cloud hosting and consulting expenses of $19.4 million and higher facilities and IT expenses of $6.1 million, partially offset by lower personnel expenses of $12.5 million due to decreases in stock-based compensation expense.

Sales and marketing

Sales and marketing expenses decreased by $51.2 million, or 21%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The decrease was primarily driven by lower marketing expenses of $42.1 million and a $19.2 million credit related to the buyout of previously impaired floors of a corporate office. This decrease was partially offset by a $9.5 million increase in personnel expenses.

Sales and marketing expenses decreased by $73.7 million, or 10%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The decrease was primarily driven by lower marketing expenses of $79.4 million and a $19.2 million credit related to the buyout of previously impaired floors of a corporate office. This decrease was partially offset by a $16.3 million increase in personnel expenses and a $4.4 million increase in facilities and IT expenses.

General and administrative

General and administrative expenses increased by $15.6 million, or 17%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The increase was primarily due to $13.4 million of merger-related costs incurred in connection with our proposed transaction with Fox.

General and administrative expenses increased by $48.4 million, or 17%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was primarily due to $32.1 million in merger-related costs incurred in connection with our proposed transaction with Fox, a $25.4 million increase in non-income based taxes, and a $3.3 million increase in personnel costs, partially offset by a decrease in other legal and consulting expenses of $18.3 million.

Three Months Ended Nine Months Ended

(in thousands, except percentages)

September 30,

2026

September 30,

2025 Change $ Change %

September 30,

2026

September 30,

2025 Change $ Change %

Total other income, net, decreased by $5.3 million, or 19%, during the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The decrease was primarily due to a $2.8 million unrealized gain recognized during the three months ended September 30, 2025 on our strategic investment in convertible promissory notes.

Total other income, net, increased by $9.6 million, or 13%, during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025. The increase was primarily due to a gain on the sale of strategic investments of $13.4 million.

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Three Months Ended Nine Months Ended

Income tax expense decreased by $9.2 million, or 70%, for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The decrease was primarily attributable to a cumulative estimated annual effective rate adjustment recorded in the third quarter of 2025 following the enactment of the One Big Beautiful Bill Act.

Income tax expense increased by $17.8 million, or 313%, for the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025, primarily due to higher pre-tax book income.

As of September 30, 2026, we had cash and cash equivalents of $2,518.8 million and short-term investments of $201.8 million. Approximately 4% of our cash was held outside the United States in accounts held by our foreign subsidiaries, which are used to fund foreign operations, and all short-term investments were held in the United States.

Our primary sources of cash are receipts from Advertising, Subscriptions, and Devices revenue. The primary uses of cash are costs of revenue including costs to acquire advertising inventory, costs to license and produce content, third-party manufacturing costs for our products, as well as operating expenses such as personnel-related expenses, consulting and professional service expenses, facility expenses, and marketing expenses. Other uses of cash include purchases of property and equipment, mergers and acquisitions, and share repurchases.

We have pursued merger and acquisition activities, such as the acquisition of Frndly TV, and we may pursue additional merger and acquisition activities in the future, including the acquisition of rights to programming and content assets. Though we do not expect to incur expenses for facilities and building related costs at the same level as we have in the last few fiscal years, we will continue to incur expenses on the maintenance of our facilities and purchases of computer systems, and other property and equipment, in order to support future growth in our business. These activities may materially impact our liquidity and capital resources.

We believe our existing cash and cash equivalents balance, and our undrawn available balance under our Credit Agreement (as discussed below), will be sufficient to meet our working capital, capital expenditures, and material cash requirements from known contractual obligations for the next twelve months and beyond. Our future capital requirements, the adequacy of available funds, and cash flows from operations could be affected by various risks and uncertainties, including, but not limited to, those detailed in Part II, Item 1A, Risk Factors in this Quarterly Report and the effects of the current macroeconomic environment. While the current macroeconomic environment has not severely impacted our liquidity and capital resources to date, it has contributed to disruption and volatility in local economies and in capital and credit markets, which could adversely affect our liquidity and capital resources in the future.

We may attempt to raise additional capital through the sale of equity securities or other financing arrangements. If we raise additional funds by issuing equity, the ownership of our existing stockholders will be diluted. If we raise additional financing by the incurrence of indebtedness, we may be subject to fixed payment obligations and also to restrictive covenants. Additionally, we may be unable to obtain debt or equity financing on terms that are acceptable to us.

On September 16, 2024, we entered into a Credit Agreement, by and among the Company, as borrower, certain of our subsidiaries, as guarantors, the lenders and issuing banks party thereto, and with Citibank N.A., as administrative agent (the "Credit Agreement"), which provides for (i) a five-year revolving credit facility in an aggregate principal amount of up to $300.0 million, and (ii) an uncommitted increase option of up to an additional $300.0 million exercisable upon the satisfaction of certain customary conditions. The Credit Agreement provides for a $100.0 million sub-facility for the issuance of letters of credit, and certain existing letters of credit were deemed outstanding under this facility. The Credit Agreement will mature on September 16, 2029. Proceeds from the Credit Agreement may be used for general corporate purposes, including to finance working capital requirements.

Our obligations under the Credit Agreement are secured by substantially all the assets of the Company and our subsidiaries that are guarantors under the Credit Agreement. We may prepay, and in certain circumstances, would be required to prepay, loans under the Credit Agreement without payment of a premium. The Credit Agreement also contains customary representations and warranties, customary affirmative and negative covenants, financial covenants requiring the maintenance of a minimum interest coverage ratio and a maximum total net leverage ratio, as well as customary events of default, the occurrence of which could result in amounts borrowed under the Credit Agreement becoming due and payable and remaining commitments terminated prior to its scheduled September 16, 2029 termination date.

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We had outstanding letters of credit secured by the Credit Agreement of $32.2 million as of September 30, 2026. As of September 30, 2026, we had not borrowed against the Credit Agreement, and we were in compliance with all of the covenants of the Credit Agreement. See Note 11 to our Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report for additional details.

The following table summarizes our cash flows for the periods presented (in thousands):

Nine Months Ended

Cash Flows from Operating Activities

Cash provided by operating activities increased in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to net income of $433.3 million in the current year, compared to a net income of $7.9 million in the prior year.

Cash Flows from Investing Activities

Net cash provided by investing activities increased during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 due primarily to the sales and maturities of short-term investments, net of purchases, of $525.0 million and sale of strategic investments of $18.4 million. The increase was partially offset by purchases of property and equipment of $8.3 million.

Cash Flows from Financing Activities

Net cash used in financing activities increased during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 primarily due to $162.7 million in repurchases of our common stock, tax payments of $167.6 million to net settle equity awards vested during the period, and payment of contingent consideration related to the acquisition of Frndly TV of $15.2 million, partially offset by proceeds from the exercise of employee stock options of $43.2 million.

For a description of our operating lease obligations and purchase obligations, refer to Note 10 and Note 13 to our Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report, respectively.

‌Our financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. These estimates and assumptions are based on historical experience, current trends and other factors that we believe to be reasonable at the time our condensed consolidated financial statements are prepared. We evaluate our estimates and assumptions on an ongoing basis. Our actual results could differ from these estimates. There have been no material changes to our critical accounting policies and estimates as compared to critical accounting policies and estimates described in our Annual Report.

Our exposure to interest rate risk relates to the interest income generated by cash, cash equivalents and short-term investments. The primary objective of our investment policy is to preserve principal while maximizing income without significantly increasing risk. We believe that an increase or decrease in interest rates of 100 basis points on our cash and cash equivalents balance would increase or decrease our interest income by approximately $25.2 million.

Most of our revenue is generated within the United States and as such we have minimal foreign currency risk related to our revenue. Our foreign currency risk primarily relates to operating expenses, cash balances, and lease liabilities denominated in currencies other than U.S. dollars, primarily British pounds and Euros. Our results of current and future operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates.

We have experienced and will continue to experience fluctuations in our net income as a result of transaction gains

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or losses related to revaluing monetary asset and liability balances that are denominated in currencies other than the functional currency of the entities in which they are recorded. We have not entered into any derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk, but we may do so in the future.

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) prior to the filing of this Quarterly Report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were, in design and operation, effective at the reasonable assurance level.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

‌There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended September 30, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

‌Information with respect to this item may be found in Note 13 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report, which is incorporated herein by reference.

Our business involves significant risks, some of which are described below. You should carefully consider the risks and uncertainties described below, together with all the other information in this Quarterly Report, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the condensed consolidated financial statements and the related notes. If any of the following risks actually occur, our business, reputation, financial condition, results of operations, revenue, key performance metrics, and future prospects could be seriously harmed. In addition, you should consider the interrelationship and compounding effects of two or more risks occurring simultaneously. Unless otherwise indicated, references to our business being harmed in these risk factors will include harm to our business, reputation, financial condition, results of operations, revenue, key performance metrics, and future prospects. In that event, the market price of our Class A common stock could decline, and you could lose part or all of your investment. You should not interpret our disclosure of any of the following risks to imply that such risks have not already materialized. The risks facing our business have not changed substantively from those discussed in our Annual Report, filed with the SEC on February 13, 2026, except for those risks marked with an asterisk (*).

Below is a summary of the principal factors that make an investment in our Class A common stock speculative or risky:

• closing conditions not being satisfied, causing delays, reduced deal benefits, or abandonment of the Mergers;

• relationship disruption, management distraction, and negative publicity or legal proceedings affecting operating results and ongoing business;

• unrealized or delayed transaction benefits or integration challenges affecting post-closing value;

• restrictions on our business activities pending closing;

• reduced ownership and voting power of our stockholders following the transaction;

• fluctuations in the value of the fixed stock consideration;

  Risks Related to Our Business and Industry

• the highly competitive nature of the TV streaming industry that is rapidly evolving;

• our ability to successfully grow revenues from advertising on our platform;

• maintaining an appropriate supply of quality video advertising inventory on our platform and effectively selling the available supply;

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• irrelevant or unengaging advertising campaigns on our streaming platform;

• our ability to successfully utilize programmatic advertising technology;

• our ability to further monetize our streaming platform;

• our ability to successfully operate and monetize our owned and operated streaming services;

• our ability to establish and maintain relationships with important content partners;

• popular or new content publishers not publishing their content on our streaming platform;

• the non-renewal or early termination of our agreements with content partners;

• content partners electing not to participate in platform features that we develop;

• users signing up for offerings and services outside of our platform;

• our ability to develop, maintain, and expand relationships with licensed Roku TV partners and manufacturing partners;

• our and our licensed Roku TV partners' ability to develop, maintain, and expand relationships with important retail sales channels that we and they rely on to sell our streaming devices and other products;

• our ability to build and maintain a strong brand and customer satisfaction and loyalty;

• our and our licensed Roku TV partners' reliance on contract manufacturers and ability to accurately forecast manufacturing requirements and manage supply chain and inventory levels;

• decreased availability or increased costs for materials and components used in the manufacturing of our products and our licensed Roku TV partners' products;

• our ability to obtain key components from sole source suppliers;

• interoperability of our products with content partners' and other third parties' offerings, technologies, and systems;

• detecting hardware defects and software errors in our products before they are released to end users;

• component manufacturing, design, or other defects that may render our products permanently inoperable;

• our ability to obtain or maintain necessary or desirable licenses, certifications, or approvals related to our use or support of third-party technology, intellectual property, or services;

• our introduction of new products and services;

• our use of artificial intelligence ("AI") technologies in our operations, products, and services;

• maintaining adequate customer support levels;

  Risks Related to Operating and Growing Our Business

• our history of operating losses;

• volatility of our quarterly operating results that could cause our stock price to decline;

• our ability to manage our growth;

• our ability to successfully expand our international operations;

• seasonality and other potential fluctuations in our business and their impact on our revenue and gross profit;

• attracting and retaining key personnel and managing succession;

• maintaining systems that can support our growth, business arrangements, and financial rules;

• our ability to successfully complete acquisitions and strategic transactions and integrate acquired businesses;

• our ability to comply with the terms of our outstanding credit facility;

• our ability to secure funds to meet our financial obligations and support our planned business growth;

• our uninsured cash deposits;

• the impact of macroeconomic conditions, natural disasters, geopolitical conflicts, or other natural or man-made catastrophic events on our business;

  Risks Related to Cybersecurity, Reliability, and Data Privacy

• data security incidents, including cybersecurity attacks, or other significant disruptions of our information technology systems that could adversely affect our business and subject us to liability;

• legal obligations and potential liability or reputational harm related to our collection, processing, disclosure, and storage of personal information;

• disruptions in information technology systems or other services that result in a degradation of our platform;

• changes in how network operators manage data that travel across their networks;

  Risks Related to Intellectual Property

• intellectual property infringement claims and litigation resulting in significant costs or the loss of important intellectual property rights;

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