Original title: Sixth straight quarter of beats: Roku (ROKU.US) posts $1.5B in revenue, beating forecasts; $22B acquisition still pending
Author: Ma Huomin, Zhitong Caijing
Image source | pexels
Zhitong Caijing learned that in the early hours of November 3 Beijing time, streaming platform Roku released its Q3 2026 results after the U.S. market close on Monday. The report showed earnings per share of $1.20, well above the market’s expected $0.57; net revenue reached $1.5 billion, also above analysts’ $1.41 billion forecast, with year-over-year growth exceeding 20%. This marks Roku’s sixth consecutive quarter of earnings beats — but the market’s focus goes beyond the numbers themselves. With Fox Corporation’s $22 billion acquisition still pending, this quarter’s report reads more like a comprehensive test of Roku’s standalone value.
Consecutive beats, driven by political ads and the platform revamp
Roku extended its strong momentum of the past year this quarter. For comparison, in the previous quarter (Q2), the company posted a record quarterly net profit of $164 million (up more than 1,400% year over year), with platform revenue growing 25% to $1.22 billion — advertising revenue up 25% to $673 million, subscription revenue up 26% to $548 million — and total platform streaming hours reaching 37.9 billion (+7%).
Heading into the third quarter, multiple tailwinds stacked up: with U.S. midterm elections approaching, political ad spending is expected to keep ramping from late Q3 into Q4, and third-party DSP channels now carry about 75% of in-stream video ad placements, making it easier for campaign ads to reach Roku inventory. Meanwhile, the new home screen — which the company calls its 'biggest revamp in a decade' — rolled out nationwide early in the quarter, and official data reportedly shows improved user retention, which could lower the cost of acquiring and keeping streaming households.
That said, the results also contain one-time factors and pressure points: in Q2, device-segment gross margin benefited from roughly $37 million in tariff refunds (negative gross margin excluding them), a tailwind that will not repeat; distribution costs for Roku-branded TVs are concentrated in the second half of 2026, and rising shipment volumes will also push up sales and marketing expenses; tightening DRAM and flash supply poses a cost-side risk. CEO Anthony Wood has said that “as memory prices rise, our material-cost advantage relative to competitors actually widens” — Roku’s operating system requires far less memory and flash storage than rival platforms.
Fox’s $22B acquisition: the real story in the numbers
This report is the second quarterly statement since Fox announced its acquisition of Roku on June 15. Under the agreement, Fox will acquire Roku at $160 per share ($96 in cash plus 0.9693 shares of Fox Class A common stock per share), valuing the transaction at roughly $22 billion in enterprise value, with closing expected in the first half of 2027. The combined company will bring together Fox’s sports and news content (NFL, MLB, NASCAR, the World Cup, Fox News, etc.) and Tubi, with Roku’s connected-TV platform, The Roku Channel, and more than 100 million global streaming households — making it the third-largest television media force in the U.S. by viewership share.
But the deal’s outlook still faces uncertainty: the U.S. Department of Justice (DOJ) has extended its antitrust review of the transaction, and the deal cannot close until that review concludes. As a result, Roku management has stopped issuing guidance and no longer holds earnings calls; all information this quarter was released through a shareholder letter. Before the report, Roku shares traded at around $157, up roughly 45% year to date, hovering below the $160 offer price — the market is pricing in the possibility of a failed deal or regulatory obstruction.
That is precisely why this quarter’s results matter beyond routine performance comparisons: if the deal proceeds smoothly, the $160 offer price caps the upside; but if the deal falls apart, Roku’s standalone fundamentals — a streak of better-than-expected profitability and a booming connected-TV ad market — will be the key to determining the downside floor for the stock. Measured that way, this quarter’s big EPS and revenue beats clearly provide strong support for that floor.
