Roku Inc. saw its stock price rise on Friday after the streaming platform provider raised its full-year 2026 platform revenue forecast, citing better-than-expected advertising and subscription sales in the first quarter. The company now expects platform revenue growth of approximately 21% for the year, targeting about $5.0 billion, up from its prior outlook of 18% growth or $4.89 billion.
Shares of Roku closed at $121.49, up 4.2% on the day, after reaching an intraday high of $129.39. Following the announcement, after-hours trading pushed the stock 10% higher, according to Reuters data.
Platform Revenue Drives Growth
Roku's platform business—its primary profit engine—generated $1.13 billion in revenue during the March quarter, a 28% increase year-over-year. Total net revenue rose 22% to $1.25 billion. The company reported net income of $85.7 million, swinging from a loss of $27.4 million in the same period last year.
Advertising revenue jumped 27% to $612.7 million, while subscription revenue climbed 30% to $518.5 million. In contrast, devices revenue fell 16% to $117.6 million, underscoring the ongoing divergence between Roku's high-margin platform business and its hardware segment, which faces margin pressure.
Scale and Market Position
Roku crossed the 100 million global streaming household mark in April, expanding its reach for advertisers and media partners. This scale strengthens Roku's negotiating power as brands increasingly shift budgets to connected TV (CTV) for its precise targeting and measurement capabilities.
According to Parks Associates, Roku OS led the U.S. connected TV platform market with a 28% usage share, ahead of Samsung's Tizen at 23%. Amazon Fire TV, LG webOS, and Vizio SmartCast followed with smaller shares. “Control of the platform layer is central to competition in the connected TV market,” said Michael Goodman, director at Parks Associates.
Cost Risks and Outlook
Roku flagged rising memory-chip costs as a headwind for device margins in the second half of the year. The company noted that its TV operating system uses less dynamic and storage memory than some competitors, but elevated component prices or weaker retail demand could weigh on the devices segment's contribution to full-year results.
For the second quarter, Roku expects net revenue of roughly $1.3 billion and adjusted EBITDA of $170 million. The full-year adjusted EBITDA target stands at $675 million, excluding interest, taxes, depreciation, amortization, and other charges.
Analyst Reactions and Capital Returns
Analysts responded positively to the forecast. Needham's Laura Martin raised her price target on Roku to $140 from $110, calling the company “the largest gatekeeper for TV monetization.” KeyBanc, JPMorgan, and Rosenblatt also increased their targets to $150.
Roku's management—founder and CEO Anthony Wood and CFO Dan Jedda—reiterated their goal of reaching $1 billion in free cash flow by 2028 or earlier. During the quarter, the company repurchased $100 million worth of shares, bringing total buybacks to $250 million since the third quarter under its $400 million program.
Looking Ahead
While Roku's advertising and subscription momentum has impressed investors, the key challenge will be sustaining this growth as the initial boost from major first-quarter events fades, particularly with an uncertain outlook for the second half of the year.
