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ROKU Roku

Filed: 4 Aug 21, 4:10pm

Exhibit 99.1

 

 

 

August 4, 2021

Fellow Shareholders,

Roku delivered a strong second quarter, with record revenue growth that was driven by exceptional performance in platform monetization. Audiences, content, and advertisers continue their shift to TV streaming around the globe, and Roku is a key enabler of this long-term secular trend. We more than doubled monetized video ad impressions year-over-year, and leading media companies are increasingly turning to Roku’s tools to grow their DTC (direct to consumer) services. Looking ahead, our recent success at the Upfronts demonstrates the accelerating shift of advertisers from traditional TV to TV streaming. We closed commitments with all seven major agency holding companies, doubling dollar commitments year-over-year. We believe that our leading technology, platform scale, and the value we provide content providers, advertisers, and consumers all position us well for long-term growth.

Key Results

 

Total net revenue grew 81% year-over-year (YoY) to $645 million

 

Platform revenue increased 117% YoY to $532 million

 

Gross profit was up 130% YoY to $338 million

 

Active Accounts reached 55.1 million, an increase of 1.5 million active accounts from Q1 2021

 

Streaming hours were 17.4 billion hours, a decrease of 1.0 billion hours from Q1 2021

 

Average Revenue Per User (ARPU) grew to $36.46 (trailing 12-month basis), up 46% YoY

Key Operating Metrics

Q2 20

 

 

Q3 20

 

 

Q4 20

 

 

Q1 21

 

 

Q2 21

 

 

YoY %

 

Active Accounts (millions)

 

43.0

 

 

 

46.0

 

 

 

51.2

 

 

 

53.6

 

 

 

55.1

 

 

 

28

%

Streaming Hours (billions)*

 

14.6

 

 

 

14.8

 

 

 

17.0

 

 

 

18.3

 

 

 

17.4

 

 

 

19

%

ARPU ($)

$

24.92

 

 

$

27.00

 

 

$

28.76

 

 

$

32.14

 

 

$

36.46

 

 

 

46

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Summary Financials ($ in millions)

Q2 20

 

 

Q3 20

 

 

Q4 20

 

 

Q1 21

 

 

Q2 21

 

 

YoY %

 

Platform revenue

$

244.8

 

 

$

319.2

 

 

$

471.2

 

 

$

466.5

 

 

$

532.3

 

 

 

117

%

Player revenue

 

111.3

 

 

 

132.4

 

 

 

178.7

 

 

 

107.7

 

 

 

112.8

 

 

 

1

%

Total net revenue

 

356.1

 

 

 

451.7

 

 

 

649.9

 

 

 

574.2

 

 

 

645.1

 

 

 

81

%

Platform gross profit

 

138.5

 

 

 

194.7

 

 

 

300.8

 

 

 

311.9

 

 

 

345.0

 

 

 

149

%

Player gross profit

 

8.4

 

 

 

20.2

 

 

 

4.6

 

 

 

14.8

 

 

 

(6.7

)

 

 

-180

%

Total gross profit

 

146.8

 

 

 

214.8

 

 

 

305.5

 

 

 

326.8

 

 

 

338.3

 

 

 

130

%

Platform gross margin %

 

56.6

%

 

 

61.0

%

 

 

63.8

%

 

 

66.9

%

 

 

64.8

%

 

 

820

bps

Player gross margin %

 

7.5

%

 

 

15.2

%

 

 

2.6

%

 

 

13.8

%

 

 

-5.9

%

 

 

-1350

bps

Total gross margin %

 

41.2

%

 

 

47.6

%

 

 

47.0

%

 

 

56.9

%

 

 

52.4

%

 

 

1120

bps

Research and development

 

84.4

 

 

 

88.4

 

 

 

94.7

 

 

 

101.6

 

 

 

113.3

 

 

 

34

%

Sales and marketing

 

64.2

 

 

 

71.0

 

 

 

96.1

 

 

 

88.9

 

 

 

93.7

 

 

 

46

%

General and administrative

 

40.5

 

 

 

43.5

 

 

 

49.5

 

 

 

60.5

 

 

 

62.2

 

 

 

54

%

Total operating expenses

 

189.0

 

 

 

202.9

 

 

 

240.3

 

 

 

251.0

 

 

 

269.2

 

 

 

42

%

Income (loss) from operations

 

(42.2

)

 

 

12.0

 

 

 

65.2

 

 

 

75.8

 

 

 

69.1

 

 

nm

 

Adjusted EBITDA 1

 

(3.4

)

 

 

56.2

 

 

 

113.5

 

 

 

125.9

 

 

 

122.4

 

 

nm

 

Adjusted EBITDA margin %

 

-1.0

%

 

 

12.4

%

 

 

17.5

%

 

 

21.9

%

 

 

19.0

%

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outlook ($ in millions)

Q3 2021E

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

$675 - $685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total gross profit

$315 - $325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

($3) - $7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA 2

$60 - $70

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Refer to the reconciliation of net income (loss) to adjusted EBITDA in the non-GAAP information in an appendix to this letter.

 

2 Q3 2021E reconciling items between net income (loss) and non-GAAP adjusted EBITDA consist of stock-based compensation of approximately $52 million, depreciation and amortization and other net adjustments of approximately $11 million.

 

___________________________

* Reported streaming hours data reflects previously disclosed adjustments to our streaming hours calculations for periods prior to Q4 2020.

Roku Q2 2021 Shareholder Letter

1

 

 

 


 

 

Account Growth

In Q2, we grew active accounts by 1.5 million, ending the quarter with 55.1 million, driven by sales of Roku TV™ models and streaming players. Q2 2021 net adds were higher than pre-covid levels in Q2 2019, but as expected, lower than the pandemic-related surge of Q2 2020. Player unit sales in Q2 2021 were relatively flat year-over-year, following the demand spike in Q2 2020. Tight component supply conditions and shipping constraints continued to increase costs faster than expected across all consumer electronics categories. In Q2, we insulated consumers from increased costs for Roku players, which resulted in Player gross margin turning negative in the quarter.

Consumers sought increased out-of-home entertainment activities (such as dining and travel) in Q2 as a result of pent-up demand and the loosening of COVID-19 restrictions, which led to a broader secular decline in overall TV viewing hours. On a year-over-year basis, Roku significantly outperformed the industry, with Roku’s streaming hours increasing nearly 19% globally, compared to a nearly 19% decline in traditional TV consumption and a nearly 2% decline in TV streaming across all platforms, for persons 2+ years of age in the U.S., according to Nielsen.

(* according to Nielsen for persons 2+ years of age in the U.S.)

 

We believe that Roku continues to provide the best user experience in streaming. In June, the Roku Express 4k Plus earned the “best streamer overall” from CNET and Editor’s Choice award from TechHive. Tom’s Guide awarded the TCL QLED and Mini-LED Roku TV models “Best TV innovation.”

We continue to make good progress in our international markets. In the UK, we enhanced our product offering with the launch of TCL Roku TV models, which we expect will drive further platform adoption. And, we are excited to bring Roku to Germany, starting with players, later this year. We believe our business model will serve us well as we seek to grow in international markets by building scale with our affordable hardware and the Roku OS (the only OS purpose-built for TV), driving user engagement with a best-in-class user experience, and monetizing activities on the platform over time.

Platform Monetization

In Q2, Platform revenue exceeded half a billion dollars for the first time in the Platform segment’s history. Revenue of $532 million, up 117% year-over-year, was driven by significant contributions from both content distribution and advertising activities. ARPU was $36.46 (trailing 12-month basis), up 46% year-over-year.

Roku Q2 2021 Shareholder Letter

2

 

 


 

 

Content Distribution

DTC businesses are leaning into the Roku platform, leveraging key tools like Roku Pay and performance marketing to successfully build their streaming services — driving results that are exceeding expectations for both Roku and our partners. Media and Entertainment promotional spending (including what we traditionally termed our “audience development” business) grew significantly faster than the overall platform during Q2. We continue to innovate and launch new marketing tools, which are a highly efficient way for DTC services to acquire and engage viewers.

We partnered with NBCUniversal

to bring an all-new, immersive Olympic experience to Roku viewers.

 

As part of our ongoing efforts to recommend great content to our users and drive engagement across our platform, we partnered with NBCUniversal to create an immersive experience that enables users in the U.S. to find and stream NBC Olympics coverage directly from the Roku home screen. The great content selection on our platform is being further bolstered by the growing number of exclusive and day-and-date releases such as Cruella and Boss Baby: Family Business.

Boss Baby: Family Business

 

Roku Q2 2021 Shareholder Letter

3

 

 


 

 

 

The Roku Channel Growth

In Q2, we continued to drive robust growth of The Roku Channel with streaming hours more than doubling year-over-year. Roku Originals, which consist of content we acquired in the Quibi acquisition, are off to a strong start. We premiered our first slate of Roku Originals programming with 30 titles available for free to The Roku Channel viewers, which drove deeper engagement in The Roku Channel. In the two weeks following launch, from May 20 to June 3:

A record number of unique accounts streamed The Roku Channel

The top ten watched programs on The Roku Channel were all Roku Originals

More than one in three users of The Roku Channel streamed a Roku Original

 

Our expansion of content reinforces The Roku Channel flywheel and we plan to continue to pursue a diverse and cost-effective content strategy, with a primary focus on licensing and distribution through our more than 175 partners. As a reminder, in March we acquired This Old House and Ask This Old House, which were the two top-rated home improvement programs in the U.S. in 2020, according to Nielsen data. In May, Roku reached its first ever pay-one window rights deal with Saban Films. Under the agreement, a selection of Saban’s 2021 film slate will be available to users for free exclusively on The Roku Channel, in the U.S. and Canada, following theatrical and home entertainment release. With the success we've seen thus far with Roku Originals, we have greenlit additional seasons of certain shows, such as "Die Harter" with Kevin Hart.

Die Hart, Mapleworth Murders, and Reno 911! received eight Emmy nominations.

This Old House won its 19th Emmy for “Outstanding Instructional and How-To Program.”

 

Ad Business Strength

In Q2, advertisers continued to follow audiences and move budgets into TV streaming. Roku’s monetized video ad impressions more than doubled year-over-year. Our competitive advantages in first-party customer relationships, data, ad innovation, and ad technology helped drive this growth. We’re pleased with our progress increasing the number of small/medium sized businesses on our platform, as the number of advertisers outside the Ad Age 200 grew over 50% year-over-year.

Roku Q2 2021 Shareholder Letter

4

 

 


 

 

The OneView Ad Platform provides a single solution for advertisers to manage their entire campaign — across TV streaming, desktop, and mobile — using Roku’s scale, first-party data, and measurement tools. Apparel brand Smartwool used OneView to execute a combined TV streaming and digital display advertising campaign. As a result, consumers who saw a Smartwool ad on both TV streaming and on digital display were 72% more likely to visit the Smartwool website. As a result of our demonstrated return on investment, TV streaming spend in the OneView Ad Platform accelerated, with spend nearly tripling year-over-year.

We achieved strong results for Q2 and looking ahead, our ad business remains well positioned. Our success at this year’s Upfronts was driven by our ongoing ad innovation and competitive differentiators including The Roku Channel and the OneView Ad Platform. Furthermore, our results at the Upfronts underscore the accelerating shift of advertisers from traditional TV to TV streaming. Roku secured commitments with all seven major agency holding companies earlier than ever and earned double the dollar commitment compared to last year. Forty-two percent of all advertisers who committed to Roku during the Upfronts were new upfront commitments (did not participate last year).

Outlook

Our approach to outlook will be similar to last quarter, with formal outlook for Q3 and additional color looking further ahead.  

Our Q3 outlook is for robust growth with total net revenue of $680 million at the midpoint (up 51% year-over-year) and total gross profit of $320 million at the midpoint (up 49% year-over-year). We anticipate quarterly sequential increases in operating expenses in the second half of 2021 from our investments in headcount, product development, and sales & marketing. As a result, we expect adjusted EBITDA to be $65 million at the midpoint in Q3.

In the near term, the varying rates of recovery from the pandemic around the world continue to present an uncertain operating environment. Within the Player segment, we expect global supply chain constraints and component cost increases to worsen in the second half of 2021, leading to increasing negative player gross margin. We believe these industry supply chain constraints and cost increases for streaming players and TV OEM partners will continue into 2022. Within the Platform segment, monetization remains strong, and while there will be a slowdown in year-over-year growth relative to last year’s pandemic-driven acceleration, we expect continued significant growth in the second half of the year.

Conclusion

We are pleased with our strong performance in the second quarter, and are excited about the road ahead. Roku remains very well positioned to benefit from the long-term secular trend of audiences, content, and advertisers shifting to TV streaming around the globe. Our success during the Upfronts this year, the clear value we offer partners seeking to build their own DTC streaming businesses, and the continued acceleration of The Roku Channel flywheel are evidence of the competitive advantages we have built.

Thank you for your support and Happy Streaming™!

 

Anthony Wood, Founder and CEO; and Steve Louden, CFO

 

 

 

Roku Q2 2021 Shareholder Letter

5

 

 


 

 

 

The Company will host a webcast of its conference call to discuss Q2 2021 results at 2 p.m. Pacific Time / 5 p.m. Eastern Time on August 4, 2021. Participants may access the live webcast in listen-only mode on the Roku investor relations website at roku.com/investor. An archived webcast of the conference call will also be available at roku.com/investor after 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 TV-related audio devices are available in the U.S. and in select countries through direct retail sales and licensing arrangements with service operators. Roku TV™ models are available in the U.S. and in select countries through licensing arrangements with TV brands. Roku is headquartered in San Jose, 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

Conrad Grodd

cgrodd@roku.com

Media

Kim Sampson

ksampson@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 our investors to be better able to compare our current results with those of previous periods, we have 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 those related to the continuing shift of audiences, content, and advertisers to TV streaming; the benefits of our technology and platform to our long-term growth; the resolution of tight component supply conditions and shipping constraints; our user experience; our ability to innovate, build and launch new products and services, including direct to consumer marketing tools; our international expansion, including platform adoption in the UK and expansion into Germany; the performance, growth and monetization of, and content available on, The Roku Channel; advertisers moving their budgets to streaming; our sponsorship offering; the benefits of the Roku Brand Studio; the benefits and features of the OneView platform; advertising commitments we obtained at Upfronts; the content selection on our platform; the performance of Roku Originals; our competitive advantages; the impact of the COVID-19 pandemic and varying rates of recovery around the world on our business and the industries we operate in; our financial outlook for the third quarter of 2021 and our color provided for the second half of 2021 and into 2022; 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 and our Quarterly Reports on Form 10-Q. All information provided in this shareholder letter and in the attached tables is as of August 4, 2021, and we undertake no duty to update this information unless required by law.

Roku Q2 2021 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, 2021

 

 

June 30, 2020

 

 

June 30, 2021

 

 

June 30, 2020

 

Net Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform

 

$

532,303

 

 

$

244,777

 

 

$

998,829

 

 

$

477,334

 

Player

 

 

112,816

 

 

 

111,296

 

 

 

220,473

 

 

 

199,505

 

Total net revenue

 

 

645,119

 

 

 

356,073

 

 

 

1,219,302

 

 

 

676,839

 

Cost of Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform (1)

 

 

187,328

 

 

 

106,324

 

 

 

341,918

 

 

 

208,260

 

Player (1)

 

 

119,525

 

 

 

102,913

 

 

 

212,347

 

 

 

180,642

 

Total cost of revenue

 

 

306,853

 

 

 

209,237

 

 

 

554,265

 

 

 

388,902

 

Gross Profit:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform

 

 

344,975

 

 

 

138,453

 

 

 

656,911

 

 

 

269,074

 

Player

 

 

(6,709

)

 

 

8,383

 

 

 

8,126

 

 

 

18,863

 

Total gross profit

 

 

338,266

 

 

 

146,836

 

 

 

665,037

 

 

 

287,937

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development (1)

 

 

113,276

 

 

 

84,387

 

 

 

214,857

 

 

 

172,665

 

Sales and marketing (1)

 

 

93,678

 

 

 

64,164

 

 

 

182,551

 

 

 

132,412

 

General and administrative (1)

 

 

62,228

 

 

 

40,494

 

 

 

122,739

 

 

 

80,234

 

Total operating expenses

 

 

269,182

 

 

 

189,045

 

 

 

520,147

 

 

 

385,311

 

Income (Loss) from Operations

 

 

69,084

 

 

 

(42,209

)

 

 

144,890

 

 

 

(97,374

)

Other Income (Expense), Net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(746

)

 

 

(1,034

)

 

 

(1,488

)

 

 

(1,897

)

Other income (expense), net

 

 

1,520

 

 

 

557

 

 

 

1,961

 

 

 

1,818

 

Total other income (expense), net

 

 

774

 

 

 

(477

)

 

 

473

 

 

 

(79

)

Income (Loss) Before Income Taxes

 

 

69,858

 

 

 

(42,686

)

 

 

145,363

 

 

 

(97,453

)

Income tax (benefit) expense

 

 

(3,609

)

 

 

462

 

 

 

(4,400

)

 

 

307

 

Net Income (Loss)

 

$

73,467

 

 

$

(43,148

)

 

$

149,763

 

 

$

(97,760

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share — basic

 

$

0.55

 

 

$

(0.35

)

 

$

1.14

 

 

$

(0.81

)

Net income (loss) per share — diluted

 

$

0.52

 

 

$

(0.35

)

 

$

1.06

 

 

$

(0.81

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding — basic

 

 

132,705

 

 

 

122,614

 

 

 

131,198

 

 

 

121,397

 

Weighted-average common shares outstanding — diluted

 

 

142,122

 

 

 

122,614

 

 

 

141,234

 

 

 

121,397

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)  Stock-based compensation was allocated as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of platform revenue

 

$

167

 

 

$

232

 

 

$

365

 

 

$

443

 

Cost of player revenue

 

 

315

 

 

 

310

 

 

 

730

 

 

 

648

 

Research and development

 

 

18,577

 

 

 

13,348

 

 

 

35,131

 

 

 

26,603

 

Sales and marketing

 

 

14,275

 

 

 

9,615

 

 

 

27,638

 

 

 

19,672

 

General and administrative

 

 

9,212

 

 

 

6,531

 

 

 

19,219

 

 

 

13,075

 

Total stock-based compensation

 

$

42,546

 

 

$

30,036

 

 

$

83,083

 

 

$

60,441

 

Roku Q2 2021 Shareholder Letter

7

 

 


 

 

 

ROKU, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value data)

(unaudited)

 

 

 

As of

 

 

 

June 30, 2021

 

 

December 31, 2020

 

Assets

 

 

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,083,273

 

 

$

1,092,815

 

Restricted cash, current

 

 

 

 

 

434

 

Accounts receivable, net of allowances of $24,455 and $41,236 as of

 

 

587,481

 

 

 

523,852

 

June 30, 2021 and December 31, 2020, respectively

 

 

 

 

 

 

 

 

Inventories

 

 

47,996

 

 

 

53,895

 

Prepaid expenses and other current assets

 

 

80,482

 

 

 

26,644

 

Total current assets

 

 

2,799,232

 

 

 

1,697,640

 

Property and equipment, net

 

 

160,544

 

 

 

155,197

 

Operating lease right-of-use assets

 

 

298,949

 

 

 

266,197

 

Intangible assets, net

 

 

97,218

 

 

 

62,181

 

Goodwill

 

 

146,784

 

 

 

73,058

 

Other non-current assets

 

 

135,831

 

 

 

16,269

 

Total Assets

 

$

3,638,558

 

 

$

2,270,542

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current Liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

132,483

 

 

$

112,314

 

Accrued liabilities

 

 

423,253

 

 

 

347,668

 

Current portion of long-term debt

 

 

7,377

 

 

 

4,874

 

Deferred revenue, current portion

 

 

48,235

 

 

 

55,465

 

Total current liabilities

 

 

611,348

 

 

 

520,321

 

Long-term debt, non-current portion

 

 

84,928

 

 

 

89,868

 

Deferred revenue, non-current portion

 

 

23,149

 

 

 

21,283

 

Operating lease liability, non-current portion

 

 

336,948

 

 

 

307,936

 

Other long-term liabilities

 

 

21,157

 

 

 

3,119

 

Total Liabilities

 

 

1,077,530

 

 

 

942,527

 

Stockholders’ Equity:

 

 

 

 

 

 

 

 

Common stock, $0.0001 par value

 

 

13

 

 

 

13

 

Additional paid-in capital

 

 

2,743,629

 

 

 

1,660,379

 

Accumulated other comprehensive income

 

 

29

 

 

 

29

 

Accumulated deficit

 

 

(182,643

)

 

 

(332,406

)

Total Stockholders’ Equity

 

 

2,561,028

 

 

 

1,328,015

 

Total Liabilities and Stockholders’ Equity

 

$

3,638,558

 

 

$

2,270,542

 

Roku Q2 2021 Shareholder Letter

8

 

 


 

 

 

ROKU, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

(unaudited)

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

149,763

 

 

$

(97,760

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

20,412

 

 

 

17,248

 

Stock-based compensation expense

 

 

83,083

 

 

 

60,441

 

Amortization of right-of-use assets

 

 

13,979

 

 

 

15,947

 

Amortization of content assets

 

 

28,093

 

 

 

12,182

 

Provision for (recoveries of) doubtful accounts

 

 

(1,099

)

 

 

3,516

 

Other items, net

 

 

(8

)

 

 

290

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(56,661

)

 

 

21,372

 

Inventories

 

 

5,899

 

 

 

4,713

 

Prepaid expenses and other current assets

 

 

(30,235

)

 

 

(5,222

)

Other non-current assets

 

 

(72,195

)

 

 

2,095

 

Accounts payable

 

 

16,433

 

 

 

20,847

 

Accrued liabilities

 

 

16,543

 

 

 

6,336

 

Operating lease liabilities

 

 

(18,394

)

 

 

12,695

 

Other long-term liabilities

 

 

(527

)

 

 

(556

)

Deferred revenue

 

 

(10,326

)

 

 

5,952

 

Net cash provided by operating activities

 

 

144,760

 

 

 

80,096

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(13,898

)

 

 

(64,109

)

Acquisitions of businesses, net of cash acquired

 

 

(136,778

)

 

 

 

Proceeds from escrows associated with acquisition

 

 

 

 

 

1,058

 

Net cash used in investing activities

 

 

(150,676

)

 

 

(63,051

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from equity issued under at-the-market offerings, net of issuance costs

 

 

989,615

 

 

 

349,609

 

Proceeds from borrowings, net of issuance costs

 

 

 

 

 

69,325

 

Repayments of borrowings

 

 

(2,500

)

 

 

(71,825

)

Proceeds from equity issued under incentive plans

 

 

10,285

 

 

 

5,877

 

Net cash provided by financing activities

 

 

997,400

 

 

 

352,986

 

Net increase in cash, cash equivalents and restricted cash

 

 

991,484

 

 

 

370,031

 

Cash, cash equivalents and restricted cash —beginning of period

 

 

1,093,249

 

 

 

517,333

 

Cash, cash equivalents and restricted cash —end of period

 

$

2,084,733

 

 

$

887,364

 

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

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

2,083,273

 

 

 

885,825

 

Restricted cash, current

 

 

 

 

 

1,539

 

Restricted cash, non-current

 

 

1,460

 

 

 

 

Cash, cash equivalents and restricted cash —end of period

 

$

2,084,733

 

 

$

887,364

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

1,290

 

 

$

2,118

 

Cash paid for income taxes

 

$

487

 

 

$

482

 

Supplemental disclosures of noncash investing and financing activities:

 

 

 

 

 

 

 

 

Non-cash consideration for business combination

 

$

15,200

 

 

$

 

Services to be received as part of a business combination

 

$

6,300

 

 

$

 

Unpaid portion of property and equipment purchases

 

$

3,709

 

 

$

5,218

 

Unpaid portion of acquisition-related expenses

 

$

271

 

 

$

 

Unpaid portion of purchased intangibles

 

$

 

 

$

400

 

Unpaid portion of at-the-market issuance costs

 

$

 

 

$

150

 

Roku Q2 2021 Shareholder Letter

9

 

 


 

 

 

NON-GAAP INFORMATION (in thousands)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2021

 

 

June 30, 2020

 

 

June 30, 2021

 

 

June 30, 2020

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

73,467

 

 

$

(43,148

)

 

$

149,763

 

 

$

(97,760

)

Other income (expense), net

 

 

(774

)

 

 

477

 

 

 

(473

)

 

 

79

 

Stock-based compensation

 

 

42,546

 

 

 

30,036

 

 

 

83,083

 

 

 

60,441

 

Depreciation and amortization

 

 

10,807

 

 

 

8,800

 

 

 

20,412

 

 

 

17,248

 

Income tax (benefit) expense

 

 

(3,609

)

 

 

462

 

 

 

(4,400

)

 

 

307

 

Adjusted EBITDA

 

$

122,437

 

 

$

(3,373

)

 

$

248,385

 

 

$

(19,685

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly streaming hours published vs. revised streaming hours (billions) 0b 2b 4b 6b 8b 10b 12b 14b 2017 q1 2017 q2 2017 q3 2017 q4 2018 q1 2018 q2 2018 q3 2018 q4 2019 q1 2019 q2 2019 q3 2019 q4 2020 q1 published streaming hours revised streaming hours

 

Roku Q2 2021 Shareholder Letter

10