Shares surged 12% after hours! Roku(ROKU.US)Q4 earnings exceeded expectations, with platform business becoming the "strong engine" for growth

Roku (ROKU.US) released its Q4 earnings after the market close on Thursday, forecasting full-year revenue above Wall Street expectations, betting on a recovery in the digital advertising market and an accelerated shift of users to ad-supported streaming, which drove its stock price higher in after-hours trading. As of press time, the stock surged 12.18% after hours.

Data shows the company’s Q4 sales increased 16.1% year-over-year to $1.395 billion, surpassing market average expectations. GAAP earnings per share were $0.53, exceeding analyst consensus estimates by 88.8%.

The company is optimistic about next quarter’s revenue guidance, with a midpoint of $1.2 billion, 3% above the analyst expectation of $1.17 billion. The FY2026 EBITDA guidance midpoint is $635 million, higher than the analyst forecast of $581 million. The company expects the full-year revenue midpoint for 2026 to be $5.5 billion, above the market expectation of $5.34 billion.

Roku primarily manufactures hardware players and provides access to various online streaming TV services. Over the past three years, sales have grown at a steady compound annual growth rate of 14.9%. This growth outpaces the average for consumer internet companies, indicating its products meet customer needs.

Changing consumer habits are benefiting Roku. As more users shift to streaming platforms, the company’s ad sales perform strongly, further confirming an industry recovery trend.

Connected TV devices are becoming the main viewing terminals for more households, with streaming viewership increasing significantly. Roku is one of the main beneficiaries.

The platform segment, which includes digital advertising and content distribution revenue, continues to be the main growth engine for the company. The earnings report shows Roku’s platform revenue in Q4 reached $1.22 billion, up 18% year-over-year, surpassing the analyst average expectation of $1.18 billion compiled by LSEG.

“Looking into 2026 and beyond, we are confident in maintaining double-digit growth in platform revenue while continuously expanding operating and net profit margins,” Roku said in its letter to shareholders. The company expects platform revenue to grow 18% in 2026 to $4.89 billion, exceeding the analyst forecast of $4.66 billion.

Roku’s Q4 free cash flow reached $483.6 million, with a profit margin of 34.7%. Roku demonstrates strong cash profitability, giving it options for reinvestment or returning capital to shareholders. Over the past two years, the company’s average free cash flow profit margin was 12.1%, outperforming the broader consumer internet sector.