Roku Inc. is under the spotlight this week following a volatile trading session that saw shares initially fall before staging a sharp after-hours recovery. The trigger? A bold revenue projection for 2026 that has renewed optimism about the streaming platform’s growth prospects. Investors and analysts alike are assessing whether this surge is sustainable or simply a short-term reaction, with Friday’s market open expected to provide key signals.
Roku shares jumped roughly 12.5% to $93.31 in after-hours trading, fuelled by the company’s projection that 2026 net revenue will exceed Wall Street expectations. The platform segment, covering advertising and content distribution, is expected to grow 18% to $4.89 billion, surpassing the $4.66 billion average forecast from analysts surveyed by LSEG. CEO Anthony Wood also highlighted that the company aims to surpass 100 million streaming households in 2026. Full-year guidance targets $5.5 billion in net revenue alongside $635 million in adjusted EBITDA.
Quarterly filings with the U.S. Securities and Exchange Commission show Q4 net revenue at $1.395 billion with net income of $80.5 million. First-quarter guidance anticipates net revenue near $1.2 billion and adjusted EBITDA of $130 million. However, Roku’s devices segment remains a drag, posting a negative 23% gross margin for the quarter. The company also repurchased $150 million of stock in 2025.
A central factor for Roku’s outlook is ad revenue. Will marketers increase spending on connected-TV advertising, or remain cautious? Analysts note that converting Roku’s growing user base into consistent ad revenue is critical. The company faces competition from YouTube and other streaming services with ad-supported tiers, making effective monetisation essential to sustaining growth without eroding margins through aggressive device discounts.
• Streaming Hours: 2025 saw streaming hours rise 15% to 145.6 billion, highlighting continued engagement on the platform.
• The Roku Channel: Its share of total TV streaming rose to 6.3% in December, up from 4.6% the previous year, demonstrating Roku’s ability to attract viewers to its own content ecosystem.
• Video Ad Revenue: Revenue from video ads outpaced both the broader OTT streaming sector and digital advertising market in 2025, signaling success in monetising its audience.
• Volatile Ad Demand: Any slowdown in advertising spend could pressure revenue and stock performance.
• Platform Growth: Slower growth in platform users or engagement could undermine the core revenue story.
Roku’s 2026 projections have generated optimism, but execution risks remain. Investors will closely monitor platform growth, ad revenue trends, and device performance to judge whether the after-hours rally represents sustainable momentum or a temporary spike.
Friday’s market open and the weeks leading into Q2 2026 will be pivotal as analysts revise forecasts and the market tests Roku’s fundamentals, providing a clearer picture of the company’s long-term growth potential.…Read more by Damilola Ojoye