Exhibit 99.1

 

August 7, 2019

Fellow Shareholders,

Continued strong execution against our strategic plan led to a great quarter.  We achieved two significant milestones:  active accounts passed 30 million and ARPU surpassed $20. We beat our outlook for revenue, gross profit and adjusted EBITDA.  The industry-wide shift to streaming is accelerating.  Our business momentum and ongoing investment in areas of competitive differentiation continue to drive growth and attract users, advertisers and content publishers. This resulted in a robust increase in Active Accounts, healthy growth of Streaming Hours and continued progress in monetization.

Q2 highlights

 

Total net revenue of $250.1 million, up 59% YoY;

 

Platform revenue of $167.7 million, up 86% YoY;

 

Active Accounts of 30.5 million, a net addition of 1.4 million from last quarter;

 

Streaming Hours increased 0.5 billion hours vs. Q1 to 9.4 billion, up 72% YoY;

 

Average Revenue Per User (ARPU) of $21.06 (TTM), up $2.00 vs. Q1 2019;

 

Gross Profit of $114.2 million, up 47% YoY (and up 66% YoY excluding an $8.9M benefit to Player COGS in Q2 2018, from releasing accruals related to potential IP licensing liabilities that did not materialize);

 

Roku monetized video ad impressions again more than doubled YoY.

 

Key Operating Metrics

Q2 18

 

 

Q3 18

 

 

Q4 18

 

 

Q1 19

 

 

Q2 19

 

 

YoY %

 

Active Accounts (millions)

 

22.0

 

 

 

23.8

 

 

 

27.1

 

 

 

29.1

 

 

 

30.5

 

 

 

39

%

Streaming Hours (billions)

 

5.5

 

 

 

6.2

 

 

 

7.3

 

 

 

8.9

 

 

 

9.4

 

 

 

72

%

ARPU ($)

$

16.60

 

 

$

17.34

 

 

$

17.95

 

 

$

19.06

 

 

$

21.06

 

 

 

27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Financials ($ in millions)

Q2 18

 

 

Q3 18

 

 

Q4 18

 

 

Q1 19

 

 

Q2 19

 

 

YoY %

 

Platform revenue

$

90.3

 

 

$

100.1

 

 

$

151.4

 

 

$

134.2

 

 

$

167.7

 

 

 

86

%

Player revenue

 

66.5

 

 

 

73.3

 

 

 

124.3

 

 

 

72.5

 

 

 

82.4

 

 

 

24

%

Total net revenue

 

156.8

 

 

 

173.4

 

 

 

275.7

 

 

 

206.7

 

 

 

250.1

 

 

 

59

%

Platform gross profit

 

63.0

 

 

 

70.5

 

 

 

109.4

 

 

 

93.8

 

 

 

109.7

 

 

 

74

%

Player gross profit

 

14.7

 

 

 

8.4

 

 

 

2.9

 

 

 

7.1

 

 

 

4.5

 

 

 

-69

%

Total gross profit

 

77.8

 

 

 

79.0

 

 

 

112.3

 

 

 

100.9

 

 

 

114.2

 

 

 

47

%

Platform gross margin %

 

69.8

%

 

 

70.5

%

 

 

72.2

%

 

 

69.9

%

 

 

65.4

%

 

 

-430

bps

Player gross margin %

 

22.2

%

 

 

11.5

%

 

 

2.4

%

 

 

9.8

%

 

 

5.5

%

 

 

-1670

bps

Total gross margin %

 

49.6

%

 

 

45.6

%

 

 

40.7

%

 

 

48.8

%

 

 

45.7

%

 

 

-390

bps

R&D

 

40.2

 

 

 

45.4

 

 

 

51.0

 

 

 

55.7

 

 

 

62.0

 

 

 

54

%

Sales and marketing

 

22.3

 

 

 

25.6

 

 

 

34.6

 

 

 

33.8

 

 

 

36.6

 

 

 

64

%

G&A

 

15.4

 

 

 

19.8

 

 

 

21.2

 

 

 

22.1

 

 

 

26.0

 

 

 

69

%

Total operating expenses

 

77.9

 

 

 

90.7

 

 

 

106.8

 

 

 

111.6

 

 

 

124.6

 

 

 

60

%

Income (loss) from operations

 

(0.1

)

 

 

(11.7

)

 

 

5.5

 

 

 

(10.7

)

 

 

(10.4

)

 

nm

 

Adjusted EBITDA 1

 

7.1

 

 

 

2.0

 

 

 

24.5

 

 

 

10.0

 

 

 

11.1

 

 

 

56

%

Adjusted EBITDA margin %

 

4.5

%

 

 

1.1

%

 

 

8.9

%

 

 

4.8

%

 

 

4.4

%

 

 

-10

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outlook ($ in millions)

Q3 2019E

 

 

Full Year 2019E

 

Total net revenue

$250 - $255

 

 

$1,075 - $1,095

 

Total gross profit

$114 - $119

 

 

$480 - $490

 

Net income (loss)

($40) - ($34)

 

 

($71) - ($61)

 

Adjusted EBITDA 2, 3

($11) - ($5)

 

 

$30 - $40

 

1 Refer to the reconciliation of net loss to adjusted EBITDA in the non-GAAP information in the tables accompanying this letter.

 

2 Full Year 2019E reconciling items between net loss and non-GAAP adjusted EBITDA consist of stock-based compensation of $90 million, and depreciation and amortization and other income of $10 million.

 

3 Q3 2019E reconciling items between net loss and non-GAAP adjusted EBITDA consist of stock-based compensation of approximately $26 million, and depreciation and amortization and other income of $3 million.

 

Roku Q2 2019 Shareholder Letter

1

 


 

 

 

Q2 Financial Details  

Both platform and player segments exceeded our expectations resulting in an exceptional quarter. Total revenue growth accelerated to 59% YoY, primarily driven by growth in advertising as Roku monetized video ad impressions once again more than doubled YoY. Increases in the estimated value of content distribution agreements, based on improved visibility and performance trends, also resulted in a larger than expected recognition of revenue in the quarter. As a reminder, revenue recognition for our content distribution agreements can be lumpy quarter-to-quarter.      

Total gross profit was $114 million, up 47% YoY. Excluding the $8.9 million benefit in Q2 2018 from a release of accruals related to potential IP licensing liabilities that did not materialize, total gross profit grew 66% YoY, faster than revenue growth.  As anticipated, gross margin declined sequentially due to continued mix shift to video advertising, the introduction of Premium Subscriptions and our strategy of driving down player ASPs when doing so grows our Active Accounts faster.   One of our strategies continues to be to maximize gross profit and not gross margin percentage.

We ended the quarter with $387 million of cash, cash equivalents, restricted cash and short-term investments which included net proceeds of $81 million from the sale of Class A common stock in at-the-market offering transactions during the quarter.

Based on our strong performance year to date and our expectations for the second half of the year, we are raising our full-year 2019 outlook.

INDUSTRY TRENDS

Data Shows Roku’s Lead in The U.S. is Widening

A range of studies confirms the strength of Roku’s position in the U.S. marketplace. According to Kantar Milward Brown, Roku is the #1 TV streaming platform in the U.S. by hours streamed.  Last month, Strategy Analytics reported that the Roku operating system powers 41 million OTT devices and smart TVs in the U.S. This is 36 percent greater than the next closest competitor and expected to grow. Recently released Parks Associates consumer survey data reveals Roku had 39% of the US streaming media player installed base as of Q1 2019.

Roku Q2 2019 Shareholder Letter

2

 


 

 

 

Roku excels in attracting customers without traditional cable.  Approximately 3.5 million U.S. TV households cut the cord from March 2018 to February of 2019, moving from traditional pay TV to streaming. ‘Cord Cutters’ and ‘Cord Nevers’ access video on their TV exclusively through streaming and Roku has the largest share in the U.S. This is a valuable strategic position for our advertising business as brands cannot reach these consumers via traditional linear TV.

SCALING ACTIVE ACCOUNTS

U.S. Consumers Choose Roku Devices Most Often

During Q2, we saw strong unit sales for both Roku TVs and players. We continue to strengthen our position in smart TV OS licensing. Roku TV represented more than one in three smart TVs sold in the U.S. during the first half of the year.

We work closely with our TV partners to deliver a wide variety of Roku TV models to customers at a range of picture resolutions, screen sizes and price points. Not only do consumers want smart TVs, but they expect more from TVs in terms of capabilities and affordability.  We recently agreed with Walmart to offer several new Roku devices including audio products to their customers under their onn brand. This is in addition to Roku TVs and Roku players already sold through Walmart.

Player unit sales increased 36%, the highest growth in the last nine quarters.  Our purpose-built OS allows us to offer superior streaming experiences to consumers at attractive price points.

THE POWER OF THE ROKU PLATFORM

First-Party Data Sets Platform Apart

The most successful digital ad platforms are built on three ingredients: a coveted audience, reach at scale, and proprietary data to drive results for marketers. Roku possesses all three. This quarter, we’re highlighting how data is scaling and differentiating our platform business.

First, Roku data and predictive models are increasingly driving the movies and shows we license and promote in The Roku Channel, further fueling the channel’s growth and monetization. For the first time this quarter, machine learning became the engine behind most content recommendations in The Roku Channel. Furthermore, the Roku platform (as a whole) streamed 69% more ad-supported hours than the next closest streaming platform in June 2019, according to Comscore.

Second, our deterministic data is helping advertisers reach more Roku consumers, more accurately. A recent study by Kantar found that Roku registration data is 21 percent more accurate than IP address (often used by third party ad tech companies for targeting) to identify a real Roku home. Use of Roku proprietary targeting segments in ad campaigns is growing significantly faster than other tactics, showing how attractive this unique data is to marketers.

Third, our direct consumer relationship and data are guiding the creation of new ad formats on our home screen and across the user experience. Sponsorships, which enable brands to help streamers discover and try new content, grew significantly faster than the already fast growth of video advertising. These ad formats are unique to Roku, and the consumer reaction is overwhelmingly positive. A recent study by Dynata (formerly known as ResearchNow) found that Roku only users are twice as likely to consider ads on Roku more relevant and personalized than Amazon Fire only or Apple TV only users do on those platforms.

As more and more TV ads are streamed, platforms that know their users well, like Roku, are thriving. This is evidenced by our growing client base. We have worked with three quarters of the Ad Age Top 200 national advertisers. Likewise, programmatic demand, as well as emerging verticals like direct-to-consumer, are among our fastest growing sales channels.

Roku Q2 2019 Shareholder Letter

3

 


 

 

 

OUTLOOK

We are increasing our outlook for 2019. We remain confident in delivering over $1 billion in revenue this year, with our raised outlook midpoint of $1.085 billion, representing roughly 46% year-over-year growth and up from 40% year-over-year in our prior outlook. We expect Platform revenue to represent roughly two-thirds of total revenue. We are raising our total gross profit outlook for 2019 to roughly $485 million at the midpoint, up from roughly $470 million previously.

Our strategy is to reinvest incremental gross profit in our business to further strengthen our competitive advantages and growth drivers. Given our performance in the first half, we are raising our full year adjusted EBITDA outlook to a range of $30 million to $40 million.

Our Q3 outlook calls for 46% year-over-year revenue growth to $252.5 million at the midpoint and 47% YoY gross profit growth to roughly $116.5 million at the midpoint. We anticipate sequential increases in operating expenses in Q3 and beyond from our continued investments in talent, product development, increased facility costs as well as the timing of expenses shifting out from Q2. As a result, we expect our adjusted EBITDA loss to be roughly $8 million in Q3 at the midpoint.

Please note that our outlook does not include the impact, if any, of new tariffs that may be imposed on foreign-sourced goods as there are still too many uncertainties related to the timing, scope and level of potential near-term changes in this area.  We, along with our partners, are taking steps to mitigate potential adverse impacts.

CONCLUSION

When we founded Roku, we believed that one day all TV would be streamed, and that internet connectivity and modern software would revolutionize television for the consumer and the industry. It is exciting to see how much progress has been made.

We remain focused on reinforcing our position as the leading TV streaming platform in the U.S. and becoming a more international company. The growing scale and power of our platform continues to make Roku more desirable to users, content providers and advertisers. Our first-party relationships with consumers and sophisticated content promotion and advertising capabilities provide significant competitive advantages. We continue to invest in making it easier for viewers to find the content they love and for advertisers to reach a more relevant audience with innovative TV ad products.  We believe we are uniquely positioned with respect to the secular shift in TV distribution and look forward to the second half of the year.

Thanks to our employees for all their hard work and thank you for your continued support.

Happy Streaming!

Sincerely,

Anthony Wood, Founder and CEO Steve Louden, CFO

 

 

 

Roku Q2 2019 Shareholder Letter

4

 


 

 

 

Conference Call Webcast – 2 p.m. PST August 7, 2019

The Company will host a webcast of its conference call to discuss the Q2 2019 results at 2 p.m. Pacific Time / 5 p.m. Eastern Time. Participants may access the live webcast in listen-only mode on the Roku investor relations website at ir.roku.com. An archived webcast of the conference call will also be available at ir.roku.com following the call.

About Roku, Inc.

Roku pioneered streaming to the TV. We connect users to the streaming content they love, enable content publishers to build and monetize large audiences, and provide advertisers with unique capabilities to engage consumers. Roku streaming players and Roku TVTM models are available around the world through direct retail sales and licensing arrangements with TV OEMs and service operators. Roku is headquartered in Los Gatos, Calif. U.S.A.

Roku, the Roku logo and other trade names, trademarks or service marks of Roku appearing in this shareholder letter are the property of Roku. Trade names, trademarks and service marks of other companies appearing in this shareholder letter are the property of their respective holders.

Investor Relations

ir@roku.com

Press

Tricia Mifsud

tmifsud@roku.com

 

Diane Carlini

dcarlini@roku.com

Use of Non-GAAP Measures

In addition to financial information prepared in accordance with generally accepted accounting principles in the United States (GAAP), this shareholder letter includes certain non-GAAP financial measures. These non-GAAP measures include Adjusted EBITDA. In order for Roku’s investors to be better able to compare its current results with those of previous periods, Roku has included a reconciliation of GAAP to non-GAAP financial measures in the tables at the end of this letter. The Adjusted EBITDA reconciliation adjusts the related GAAP financial measures to exclude other income (expense), net, stock-based compensation expense, depreciation and amortization, and income tax (benefit)/expense where applicable. We believe these non-GAAP financial measures are useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, these non-GAAP financial measures have limitations, and should not be considered in isolation or as a substitute for our GAAP financial information.

Forward-Looking​ ​Statements

This shareholder letter contains “forward-looking” statements that are based on our beliefs and assumptions and on information currently available to us. Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “may,”  “seek,” “should,” “will,” “would” or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this letter. These statements include our financial outlook for the third quarter of 2019 and for the full fiscal year, the growth in active accounts, monetization of ARPU, the growth and evolution of the TV streaming market, our strategic plan, growth in the

Roku Q2 2019 Shareholder Letter

5

 


 

 

 

number of OTT devices and smart TVs powered by the Roku OS, Roku’s position in smart TV OS licensing, strength of the Roku brand, OS and platform, the growth and monetization of The Roku Channel,  the growth of Roku proprietary targeting segments in advertising campaigns, the importance of our direct customer relationship and data, the potential impact of trade tariffs, our investments, and our overall business trajectory. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Further information on factors that could cause actual results to differ materially from the results anticipated by our forward-looking statements is included in the reports we have filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2018 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2019.  Additional information will also be available in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2019.  All information provided in this shareholder letter and in the tables attached hereto is as of August 7, 2019, and we undertake no duty to update this information unless required by law.

Roku Q2 2019 Shareholder Letter

6

 


 

 

 

ROKU, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)

(unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

2019

 

 

June 30,

2018

 

 

June 30,

2019

 

 

June 30,

2018

 

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform

 

$

167,682

 

 

$

90,341

 

 

$

301,835

 

 

$

165,418

 

Player

 

 

82,419

 

 

 

66,469

 

 

 

154,928

 

 

 

127,968

 

Total net revenue

 

 

250,101

 

 

 

156,810

 

 

 

456,763

 

 

 

293,386

 

Cost of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform (1)

 

 

57,980

 

 

 

27,328

 

 

 

98,344

 

 

 

48,994

 

Player (1)

 

 

77,912

 

 

 

51,730

 

 

 

143,319

 

 

 

103,528

 

Total cost of revenue

 

 

135,892

 

 

 

79,058

 

 

 

241,663

 

 

 

152,522

 

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform

 

 

109,702

 

 

 

63,013

 

 

 

203,491

 

 

 

116,424

 

Player

 

 

4,507

 

 

 

14,739

 

 

 

11,609

 

 

 

24,440

 

Total gross profit

 

 

114,209

 

 

 

77,752

 

 

 

215,100

 

 

 

140,864

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (1)

 

 

61,994

 

 

 

40,196

 

 

 

117,732

 

 

 

74,322

 

Sales and marketing (1)

 

 

36,568

 

 

 

22,259

 

 

 

70,375

 

 

 

42,577

 

General and administrative (1)

 

 

26,033

 

 

 

15,429

 

 

 

48,119

 

 

 

30,999

 

Total operating expenses

 

 

124,595

 

 

 

77,884

 

 

 

236,226

 

 

 

147,898

 

(Loss) from Operations

 

 

(10,386

)

 

 

(132

)

 

 

(21,126

)

 

 

(7,034

)

Other Income, Net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(571

)

 

 

(57

)

 

 

(669

)

 

 

(108

)

Other income, net

 

 

1,240

 

 

 

361

 

 

 

2,207

 

 

 

809

 

Total other income, net

 

 

669

 

 

 

304

 

 

 

1,538

 

 

 

701

 

Income (Loss) Before Income Taxes

 

 

(9,717

)

 

 

172

 

 

 

(19,588

)

 

 

(6,333

)

Income tax (benefit) expense

 

 

(384

)

 

 

(354

)

 

 

(523

)

 

 

(225

)

Net Income (Loss)

 

$

(9,333

)

 

$

526

 

 

$

(19,065

)

 

$

(6,108

)

Net income (loss) per share —basic

 

$

(0.08

)

 

$

0.01

 

 

$

(0.17

)

 

$

(0.06

)

Net income (loss) per share —diluted

 

$

(0.08

)

 

$

0.00

 

 

$

(0.17

)

 

$

(0.06

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares used in computing net

   income (loss) per share —basic

 

 

114,572

 

 

 

102,652

 

 

 

112,734

 

 

 

101,079

 

Weighted-average shares used in computing net

   income (loss) per share —diluted

 

 

114,572

 

 

 

121,698

 

 

 

112,734

 

 

 

101,079

 

 

 

 

(1)

Stock-based compensation was allocated as follows:

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

2019

 

 

June 30,

2018

 

 

June 30,

2019

 

 

June 30,

2018

 

Cost of platform revenue

 

$

59

 

 

$

19

 

 

$

118

 

 

$

38

 

Cost of player revenue

 

 

246

 

 

 

67

 

 

 

489

 

 

 

111

 

Research and development

 

 

9,258

 

 

 

2,801

 

 

 

17,790

 

 

 

5,097

 

Sales and marketing

 

 

4,974

 

 

 

1,286

 

 

 

10,140

 

 

 

2,396

 

General and administrative

 

 

4,134

 

 

 

1,136

 

 

 

7,998

 

 

 

2,096

 

Total stock-based compensation

 

$

18,671

 

 

$

5,309

 

 

$

36,535

 

 

$

9,738

 

 

 

Roku Q2 2019 Shareholder Letter

7

 


 

 

 

ROKU, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)

(unaudited)

 

 

As of

 

 

 

June 30,

2019

 

 

December 31,

2018

 

Assets

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

375,509

 

 

$

155,564

 

Short-term investments

 

 

10,987

 

 

 

42,146

 

Restricted cash

 

 

868

 

 

 

 

Accounts receivable, net of allowances

 

 

204,037

 

 

 

183,078

 

Inventories

 

 

39,443

 

 

 

35,585

 

Prepaid expenses and other current assets

 

 

19,063

 

 

 

15,374

 

Deferred cost of revenue, current

 

 

44

 

 

 

1,188

 

Total current assets

 

 

649,951

 

 

 

432,935

 

Property and equipment, net

 

 

48,402

 

 

 

25,264

 

Operating lease right-of-use assets

 

 

115,961

 

 

 

 

Intangible assets, net

 

 

1,200

 

 

 

1,477

 

Goodwill

 

 

1,382

 

 

 

1,382

 

Other non-current assets

 

 

3,929

 

 

 

3,939

 

Total Assets

 

$

820,825

 

 

$

464,997

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

201,732

 

 

$

148,562

 

Deferred revenue, current

 

 

36,536

 

 

 

45,442

 

Total current liabilities

 

 

238,268

 

 

 

194,004

 

Deferred revenue, non-current

 

 

13,889

 

 

 

19,594

 

Operating lease liability, non-current

 

 

105,513

 

 

 

 

Other long-term liabilities

 

 

2,473

 

 

 

6,748

 

Total Liabilities

 

 

360,143

 

 

 

220,346

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value

 

 

12

 

 

 

11

 

Additional paid-in capital

 

 

733,627

 

 

 

498,553

 

Accumulated other comprehensive income (loss)

 

 

4

 

 

 

(17

)

Accumulated deficit

 

 

(272,961

)

 

 

(253,896

)

Total stockholders’ equity

 

 

460,682

 

 

 

244,651

 

Total Liabilities and Stockholders’ Equity

 

$

820,825

 

 

$

464,997

 

Roku Q2 2019 Shareholder Letter

8

 


 

 

 

ROKU, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

(unaudited)

 

 

Six Months Ended

 

 

 

June 30,

2019

 

 

June 30,

2018

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(19,065

)

 

$

(6,108

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5,677

 

 

 

3,606

 

Stock-based compensation expense

 

 

36,535

 

 

 

9,738

 

Provision for doubtful accounts

 

 

53

 

 

 

286

 

Non-cash interest expense

 

 

412

 

 

 

 

Loss from exit of facilities

 

 

 

 

 

385

 

Amortization of premiums on short-term investments

 

 

(265

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(21,012

)

 

 

9,383

 

Inventories

 

 

(3,858

)

 

 

(6,799

)

Prepaid expenses and other current assets

 

 

(5,377

)

 

 

309

 

Operating lease right-of-use assets

 

 

7,738

 

 

 

 

Deferred cost of revenue

 

 

1,144

 

 

 

2,010

 

Other noncurrent assets

 

 

10

 

 

 

(1,333

)

Accounts payable and accrued liabilities

 

 

32,255

 

 

 

(19,000

)

Operating lease liabilities

 

 

(4,405

)

 

 

 

Other long-term liabilities

 

 

(1,197

)

 

 

(558

)

Deferred revenue

 

 

(14,611

)

 

 

(3,387

)

Net cash provided by (used in) operating activities

 

 

14,034

 

 

 

(11,468

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(23,171

)

 

 

(9,013

)

Purchases of short-term investments

 

 

(12,365

)

 

 

 

Sales/maturities of short-term investments

 

 

43,810

 

 

 

 

Net cash provided by (used in) investing activities

 

 

8,274

 

 

 

(9,013

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from equity issued under incentive plans

 

 

19,145

 

 

 

17,398

 

Proceeds from equity issued under at-the-market program, net of offering costs

 

 

179,360

 

 

 

 

Net cash provided by financing activities

 

 

198,505

 

 

 

17,398

 

Net Increase (Decrease) in cash, cash equivalents and restricted cash

 

 

220,813

 

 

 

(3,083

)

Cash, cash equivalents and restricted cash—Beginning of period

 

 

155,564

 

 

 

177,250

 

Cash, cash equivalents and restricted cash—End of period

 

$

376,377

 

 

$

174,167

 

Cash, cash equivalents and restricted cash at end of period:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

375,509

 

 

 

174,167

 

Restricted cash

 

 

868

 

 

 

 

Cash, cash equivalents and restricted cash—End of period

 

$

376,377

 

 

$

174,167

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

960

 

 

 

1

 

Cash paid for income taxes

 

$

636

 

 

$

349

 

Supplemental disclosures of non-cash investing and financing

   activities:

 

 

 

 

 

 

 

 

Unpaid portion of property and equipment purchases

 

$

6,984

 

 

$

1,043

 

Unpaid portion of at-the-market offering costs

 

$

459

 

 

 

 

 

Roku Q2 2019 Shareholder Letter

9

 


 

 

 

ROKU, INC.

NON-GAAP INFORMATION (in thousands, except per share data)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

2019

 

 

June 30,

2018

 

 

June 30,

2019

 

 

June 30,

2018

 

Reconciliation of Net Loss to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(9,333

)

 

$

526

 

 

$

(19,065

)

 

$

(6,108

)

Other income, net

 

 

(669

)

 

 

(304

)

 

 

(1,538

)

 

 

(701

)

Stock-based compensation

 

 

18,671

 

 

 

5,309

 

 

 

36,535

 

 

 

9,738

 

Depreciation and amortization

 

 

2,828

 

 

 

1,950

 

 

 

5,677

 

 

 

3,606

 

Income tax (benefit) expense

 

 

(384

)

 

 

(354

)

 

 

(523

)

 

 

(225

)

Adjusted EBITDA

 

$

11,113

 

 

$

7,127

 

 

$

21,086

 

 

$

6,310

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Roku Q2 2019 Shareholder Letter

10

 

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