ROKU 10-K & 10-Q changes, risk factors and insider trading

•maintaining an adequateappropriate supply of quality video advertising inventory on our platform and effectively selling the available supply;

•our ability to successfully operate and monetize Theour Rokuowned Channeland operated streaming services;

•our ability to build and maintain a strong brand and maintain customer satisfaction and loyalty;

•our and our licensed Roku TV partners’ reliance on contract manufacturers and ability to accurately forecast manufacturing requirements and manage our supply chain and inventory levels;

•our ability to successfully complete acquisitions and investmentsstrategic transactions and integrate acquired businesses;

The global TV streaming industry—including the sale of TV streaming devices as well as the sale of advertisingadvertising, subscription services, and other on-demand content on TV streaming platforms—is highly competitive and global.competitive. Our success depends in part on user acquisition and retention and the effective monetization of our streaming platform. To attract and retain users, we must respond efficiently to changes in user tastes and preferences and offer our users access to the content they demand on terms that they accept. Effective monetization requires us to continue to update the features and functionality of our streaming platform for users, content partners, and advertisers. We also must effectively support popular sources of streaming content that are available on our platform, such as Amazon Prime Video, Disney+, Hulu, Max, Netflix, and YouTube.platform. And we must respond rapidly to actual and anticipated market trends in the TV streaming industry.

Large companies such as Amazon, Apple, and Google offer TV streaming devices that compete with Roku streaming devices and those of our licensed Roku TV partners and the Roku TV OS. Google licenses its Android operating system software for integration into smart TVs, including those of certain of our existing TV partners, and service provider set-top boxes, and Amazon licenses its operating system software for integration into smart TVs and sells Amazon-branded smart TVs. We may also face increased competition from Walmart (which makes and sells Onn. branded streaming products, including co-branded Roku TV models), in light of Walmart’s recentits acquisition of Vizio (which makes and sells smart TVs with a proprietary operating system). and the integration of Vizio’s operating system into Walmart products instead of other third-party proprietary operating systems. These companies have greater financial resources than we do and can subsidize the cost of their streaming devices or licensing arrangements to promote their other products and services, which could make it harder for us to acquire new users, retain existing users, increase Streaming Hours, and monetize our streaming platform. These competitors could also implement standards or technology that are not compatible with our products or that provide a better streaming experience and have greater resources to more aggressively promote their brands through advertising than we do.

In addition, we compete for Streaming Hours with many TV brands, including certain of our existing TV partners, that offer their own TV streaming solutions within their TVs, mobile streaming applications on smartphones and tablets, and other devices and platforms, such as game consoles with TV streaming functionality. Similarly, some service operators, such as Comcast and Charter Communications (and their joint venture, Xumo, LLC), offer TV streaming applications and devices as part of their cable service plans and can leverage their existing user bases, installation networks, broadband delivery networks, and name recognition to gain traction in TV streaming. If viewers of TV streaming content prefer alternative products to Roku streaming devices, we may not be able to achieve our expected growth in platform revenue, gross profit, and our key performance metrics.

To remain competitive and maintain our position as a leading TV streaming platform, we need to continuously invest in our platform, product development, marketing, service and support, and device distribution infrastructure. In addition, evolving TV standards and unknown future developments may require further investments in the development of Roku streaming devices, our streaming platform, and our other products.products and services. We may not have sufficient resources to continue to make the investments needed to maintain our competitive position. In addition, manysome of our competitors have longer operating histories, greater name recognition, larger customer basesbases, and significantly greater financial, technical, sales, marketing, and other resources than us, which provide them with advantages in developing, marketing, or servicing new products and offerings. Our competitors also may enter into business combinations or partnerships that strengthen their competitive positions. As a result, they may be able to respond more quickly to market demand, devote greater resources to the development, promotion, sales, and distribution of their products or their content, and influence market acceptance of their products better than we can. These competitors may also be able to adapt more quickly to new or emerging technologies or standards and may be able to deliver products and services at a lower cost. Sustained competition could reduce our sales volume, revenue, gross profit, and operating margins, result in pricing pressure, increase our operating costs, harm our competitive position, and otherwise harm our business.

To enhance our users’ experience, we also offer other Roku-branded products, including projectors, smart home products and services, and audio products, including wireless speakers and subwoofers. As a result, we face additional competition fromin otherthese brandsproduct of smart home and audio products.categories. If our smart home and audiothese products do not operate as designed or do not enhance the Roku Experience as we intend, our users’ overall viewing experience may be diminished, which may impact the overall demand forharm our productscompetitive position and otherwise harm our partners’ Roku TV models.business.

We operate in a highly competitive advertising industry and compete for revenue from advertising with other streaming platforms and services, social media platforms, and other digital platforms, as well as traditional media, such as radio, broadcast, cable and satellite TV, and satellite and internet radio. These competitors offer content and other advertising mediums that may be more attractive to advertisers than our streaming platform. These competitors are often very large and have more advertising experience and financial resources than we do, which may adversely affect our ability to compete for advertisers and may result in lower revenue and gross profit from advertising. Many major SVOD services, including Netflix, Disney+, and Amazon Prime Video,services now have ad-supported SVOD tiers, which has further increased competition for streaming TV advertising revenue. These services, as well as other services such as YouTubeAVOD and services that have FAST channels (such as Tubi and Pluto),services, sell (either through direct sales or programmatically through third parties) advertising inventory in their ad-supported content that is distributed on our streaming platform. Our business and growth prospects may be harmed if we are unable to increase our revenue from advertising by, among other things, continuing to improve our streaming platform’s capabilities to further optimize and measure advertisers’ campaigns; continuing to increase our streaming platform’s reach; increasing, differentiating, and selling our advertising inventory, including video advertising inventory we sell in The Roku Channel, video advertising inventory that we acquire through our streaming services distribution agreements, and display ads included throughout the Roku Experience; innovating our ad product offerings; and maintaining a strong advertising sales team and programmatic capabilities. See also “—If we are unable to maintain an adequateappropriate supply of quality video advertising inventory on our streaming platform or generate sufficient demand to effectively sell our available video advertising inventory, our business may be harmed.”

Many advertisers continue to devote a substantial portion of their advertising budgets to advertising in traditional media or on other digital platforms, such as traditional TV, radio, print publications, and social media. The future growth of our business depends on the growth of advertising on TV streaming platforms and on advertisers increasing their spending on advertising on our TV streaming platform. Although traditional TV advertisers have shown growing interest in advertising on TV streaming platforms, we cannot be certain that their interest will continue to increase or that they will not revert to traditional TV advertising or shift their advertising spending to social media and other digital platforms. In addition, if we are unable to compete with social media and other digital platforms to win business from advertisers and advertising agencies who have traditionally advertised on these platforms, such as direct-to-consumer and small or medium-sized businesses, our ability to grow our business may be limited. If advertisers, or their agency relationships, do not perceive meaningful benefits of advertising on our TV streaming platform,platforms, theour marketbusiness may develop more slowly than we expect, which could adversely impact our operating results and our ability to grow our business.

Finally, there is political or regulatory pressure in some countries to limit streaming TV advertising (including limiting the advertising that may be associated with children’s content) or impose local content or prominence requirements on streaming TV services, which could pose a threat to our operating results and our ability to grow our business.

If we are unable to maintain an adequateappropriate supply of quality video advertising inventory on our streaming platform or generate sufficient demand to effectively sell our available video advertising inventory, our business may be harmed.

Our business model depends on our ability to growmaintain an appropriate supply of video advertising inventory on our streaming platform and sell it to advertisers. While The Roku Channel has historically served as a valuable source of video advertising inventory for us to sell, there is no guarantee that it will continue to do so in the future. If The Roku Channel is unable to secure content that is appealing to our users and advertisers, or is unable to do so on terms that provide a sufficient supply of advertising inventory at reasonable cost, our supply of video advertising inventory will be negatively impacted. We are also dependent on our ability to monetize video advertising inventory within other ad-supported apps on our streaming platform and seek to sell such inventory from the content partners of such apps. We may fail to attract content partners that generate a sufficient quantity or quality of ad-supported content hours on our streaming platform or fail to obtain access to a sufficient supply of such advertising inventory from the publishers.

Our access to video advertising inventory in ad-supported streaming apps on our streaming platform varies greatly among apps and the amount, quality, and cost of video advertising inventory available to us can change at any time. Accordingly, we may not have access to a significant portion of the video advertising inventory on our streaming platform. For certain apps, including YouTube’s ad-supported app,YouTube, we have no access to video advertising inventory at this time, and we may not secure access in the future. Moreover, when existing SVOD services introduce new ad-supported tiers to their streaming services, we have in the past been unable, and in the future may be unable, to obtain access to video advertising inventory on thesead-supported tiers of SVOD services on mutually agreeable terms, or at all. If we cannot grow, maintain, and generate sufficient demand for an adequateappropriate supply of quality video advertising inventory at reasonable costs to keep up with demand or sell such advertising inventory at our desired price, our business may be harmed. If we are unable to effectively sell our available video advertising inventory, our business may be harmed.

If the advertising campaigns that run on our streaming platform decrease or are not relevant or not engaging to our users, our business may be adversely impacted.harmed.

We have made, and are continuing to make, investments to engage with more advertisers and content partners, and enable them to deliver more relevant advertising campaigns to our viewers. However,Historically, a small number of advertisers and content partners historically have accounted for a significant portion of the spending on ads integrated into our UI, and we are making efforts to expand the number and categories of advertisers spending on these ads. If our advertisers and content partners decrease spending on ads integrated into our UI, or if our efforts to broaden the categories of advertisers spending on these ads are unsuccessful, our financial condition and operating results may suffer, and our business may be harmed. For example, consolidation among content partners has in the past resulted, and may in the future result, in decreased spending on ads integrated into our UI. If our content partners decrease spending on ads integrated into our UI, our financial condition and operating results may suffer, and our business may be harmed.

In addition, existing and prospective advertisers may not be successful in serving advertising campaigns that lead to and maintain viewer engagement. Those ads and campaigns may seem irrelevant, repetitive, or overly targeted and intrusive. For example, viewers may dislike the content and frequency of advertising that appears on the Roku Home Screen. We are continuously seeking to balance the objectives of our advertisers with our desire to provide an optimal viewer experience, but we may not be successful in achieving a balance that continues to attract and retain viewers, advertisers, and content partners. If the advertising campaigns that run on our streaming platform are not relevant, are overly intrusive or too frequent, or are an impediment to the use of our platform, our viewers may stop using our platform, resulting in a reduction of our user base and Streaming Hours, which will harm our business, financial condition, and operating results.

The market for programmaticProgrammatic streaming TV ad buying is growing,growing within the industry, and advertisers and advertising agencies can programmatically purchase and manage their streaming TV, desktop, and mobile advertising campaigns both off and on the Roku platform through third-party demand sourcesmechanisms (such as third-party DSPs and SSPs) and through our media buying channels. If our current and potential advertising partners do not continue to shift to programmatic ad buying from other buying methods, or if we are unable to expand our programmatic demand by maintaining and developing third-party demand relationships in a way that is competitive with other advertising platforms, our business could be harmed. In addition, if DSPs or SSPs do not have the functionality or services expected by advertisers or advertising agencies, they may take their advertising spend to a non-Roku platform. We also may not be able to adapt to changes or trends in programmatic streaming TV advertising, which would harm our ability to grow our advertising revenue and harm our business.

Our business model depends on our ability to generate platformPlatform revenue from advertisers and content partners through ad-supported content.partners. We generate platformPlatform revenue primarily from the sale of digital advertising (including direct and programmatic video advertising, ads integrated into our UI, and related services) and streaming services distribution (including subscription and transaction revenue shares, the sale of Premium Subscriptions, the sale of owned and operated subscription services, and the sale of branded app buttons on remote controls). As such, we are seeking to expand our user base and increase Streaming Hours in an effort to create additional platformPlatform revenue opportunities. As our user base grows and as we increase the amount of content offered and streamed across our platform, we must effectively monetize our expanding user base and streaming activity. The total number of Streaming Hours does not correlate with platformPlatform revenue on a period-by-period basis, primarily because we do not monetize every hour streamed or every user on our platform. Moreover, Streaming Hours on our platform are measured whenever a Roku streaming device is streaming content, whether a viewer is actively watching or not. For example, if our streaming player is connected to a TV, and the viewer turns off the TV, steps away, or falls asleep without stopping or pausing the player, then a particular streaming app may continue to play content for a period of time determined by the streaming app. The Roku TV OS’s “Are you still watching?” feature, which prompts users to confirm they are still watching, does not resolve this lack of correlation.

OtherCertain apps available on our streaming platform, such as Amazon Prime Video, Apple TV+, Hulu, and YouTube,platform are focused on increasing user engagement and time spent within their apps by allowing users to purchase additional content and streaming services within their apps. When users purchase these products and services,services in-app rather than from us, we may earn less revenue than when such products and services are purchased directly from us. Additionally, if our users spend most of their time within particular apps where we have limited or no ability to place advertisements or leverage user information, or our users opt out from our ability to collect data for use in providing more relevant advertisements, we may not be able to achieve our expected growth in platformPlatform revenue, gross profit, or certain key performance metrics. Additionally, our distribution agreements with our most popular apps are renegotiated periodically;periodically, thus,and evenchanging ifcommercial weterms arecould currentlyaffect ableour ability to monetize Streamingthose Hours within an app, we may not be able to do so in the future. If we are unable to further monetize our streaming platform, our business may be harmed.apps.

OurThe effortsmonetization to monetizeof our streaming platform may not continue to grow as we expect, and at times our platformPlatform revenue growth has been, and may in the future be, lower than expected due to advertising inventory supply and demand imbalances; advertisers significantly curtailing or pausing advertising spending due to macroeconomic factors or other factors beyond our control; competitive pressures from video advertising offerings on other TV streaming platforms or services; or the non-binding nature of advertisers’ spending commitments.commitments; For example, spending commitments we obtainfluctuations in connectionstreaming withservices annualsubscription TVprices; Upfrontor presentationschanges arein typicallyconsumer notbehaviors fullyrelated binding,to andsubscriptions thefor revenuestreaming we receive from such commitments may be less than the initially committed amount.services. To materially increase the monetization of our streaming platform through the sale of video advertising, we must generate significantly more advertising revenue on our streaming platform as well as deliver ad-supported content that results in our users streaming significantly more ad-supported content. We cannot assure you that we will be successful in monetizing our streaming platform through the distribution of ad-supported content.

We are subject to various risks in connection with ourthe operation and monetization of Theour Rokuowned Channel.and operated streaming services.

We operatehave three owned and operated streaming services: The Roku Channel, which offers ad-supported free access for users to a collection of films, television series, live linear television,Howdy, and otherFrndly content.TV. We have incurred, and will continue to incur, costs and expenses in connection with the development, expansion, and operation of The Roku Channel, which we monetize primarily through advertising.advertising, Weand alsoHowdy commissionand originalFrndly contentTV, thatwhich we ownmonetize andprimarily distributethrough onsubscription The Roku Channel.fees. From time to time, we may remove underperforming content from Theour Rokuowned Channeland operated streaming services and record an impairmenta charge related to such removal.

If our users do not continue to stream the ad-supported content we make available on The Roku Channel, we will not have the opportunity to monetize The Roku Channel through revenue generated from advertising. In order to attract users to theour ad-supported content on The Roku Channelowned and driveoperated streaming of ad-supported video on The Roku Channel,services, we must secure rights to stream content that is appealing to our users and advertisers. In part, we do this by directly licensing certain content from content owners, such as television and movie studios. Our agreements with these content owners have varying terms and provide us with rights to make specific content available through The Roku Channel during certain periods of time. Upon expiration of these agreements, we must re-negotiate and renew these agreements with the existing content owners, or enter into new agreements with other content owners, to obtain rights to distribute additional titles or to extend the duration of the rights previously granted. If we cannot enter into content license agreements on acceptable terms to access content that enables us to attract and retain users ofto theour ad-supportedowned contentand onoperated Thestreaming Roku Channel,services, or if the content we do secure rights to stream is ultimately not appealing to our users and advertisers, usage of Theour Rokuowned Channeland operated streaming services may decline, and our business may be harmed. Further, even if we successfully monetize Theour Rokuowned Channeland operated streaming services in the United States, we may not be successful in monetizing The Roku Channelthem in international markets. See also “—We may be unable to successfully expand our international operations, and our international expansion plans, if implemented, will subject us to a variety of risks that may harm our business.”

In addition, we produce original content for distribution on The Roku Channel and other platforms.platforms, We have limited experience producing content, andbut we may not succeed in doing so in a cost-effective manner that furthers the growth of The Roku Channel and increases its appeal to our users and advertisers. We also assume risks associated with content production, such as completion and key talent risks, and the risk of litigation and claims related to our content production.

Furthermore, if the advertisements on Theour Rokuad-supported Channelstreaming services are not relevant to our users or are overly intrusive and impede our users’ enjoyment of the available content, our users may not stream content and view advertisements on Theour Rokustreaming Channel,services, and Theour Rokustreaming Channelservices may not generate sufficient revenue from advertising to be cost effective for us to operate. In addition, we distribute Theour Rokustreaming Channelservices on platforms other than our own streaming platform, and we may not be successful in attracting a large number of users or generating significant revenue from advertising throughor thesubscription distribution of The Roku Channelfees on such other streaming platforms.

We depend on a small number of content partners for anearly majorityhalf of our Streaming Hours, and if we fail to maintain these relationships, our business could be harmed.

Historically, a small number of content partners have accounted for a significant portion of the hours streamed on our platform. In the fiscal year ended December 31, 2024,2025, the top three streaming services (excluding The Roku Channel) represented almostnearly 50%half of all hours streamed in the period. If, for any reason, we cease distributing apps that have historically streamed a large percentage of the aggregate Streaming Hours on our platform, our Streaming Hours, user base, or Roku streaming device sales may be adversely affected, and our business may be harmed.

The non-renewal or early termination of agreements with our content partners may result in the removal of certain apps or app features from our streaming platform and harm our streaming device sales, user base growth, engagement, and engagement.monetization.

Our agreements with content partners generally have terms of one to three years and can be terminated before the end of the term by the content partner under certain circumstances, including if we materially breach the agreement, become insolvent, enter bankruptcy, or commit fraud, or fail to adhere to the content partners’ security or other platform certification requirements.fraud. Upon expiration of these agreements, we are required to re-negotiate and renew them in order to continue providing content from these content partners on our streaming platform. We have in the past been unable, and in the future may not be able, to reach a satisfactory agreement with certain content partners before our existing agreements have expired. If we are unable to renew such agreements on a timely basis on mutually agreeable terms, or if a content partner terminates an agreement with us prior tobefore its expiration, we may be required to temporarily or permanently remove certain apps or app features from our streaming platform.

The loss of such apps or app features from our streaming platform for any period of time may harm our business. More broadly, if we fail to maintain our relationships with the content partners on terms favorable to us, or at all, or if these content partners face problems in delivering their content across our streaming platform, we may lose app partners or usersusers, and our streaming device sales, user base growth, engagement, and engagementplatform monetization may be harmed.

If our content partners do not participate in new features that we may introduce from time to time or choose to develop their apps on alternative streaming platforms, our business may be harmed.

As our streaming platform and products evolve, we will continue to introduce new features, which may or may not be attractive to our content partners or meet their business or technical requirements. For example, some content partners have elected not to participate in new Roku Home Screen Menu features (such as “What to Watch”) or in our Roku Zones (collections of related content from apps across our streaming platform) or have imposed limits on our data gathering for usage within their apps. See also “—We may not be successful in our efforts to further monetize our expanding user base and streaming activity as we increase the amount of content offered and streamed across our platform, which may harm our business.” In addition, our streaming platform utilizes our proprietary Brightscript scripting language to allow our content partners to develop and create apps on our streaming platform. Certain content partners may find other languages, such as HTML5, more attractive to develop for and shift their resources to developing their apps on other platforms. If key content partners do not find our streaming platform simple and attractive to develop apps for, do not value and participate in all of the features and functionality that our streaming platform offers, or determine that our software developer kit or new features of our platform do not meet their requirements, our business may be harmed.

We license the Roku TV OS and our smart TV reference designs to certain TV brand and manufacturing partners for the development, manufacture, and commercialization of licensed Roku TV models and, for a number of years, the sale of Roku TV models by our licensed Roku TV partners has materially contributed to growth in our user base and Streaming Hours and supported our platform monetization efforts. As our Roku TV licensing program has expanded to certain markets outside the United States, international users are representing an increasing share of our user base. We have developed, and intend to continue to develop and expand, relationships with these TV brand and manufacturing partners as we continue to invest in the growth and expansion of our Roku TV program both in the United States and international markets. We typically do not receive or expect license revenue from these license arrangements but incur operating expenses to establish and support them. The economic benefits that we derive from these license arrangements are and will likely continue to be indirect, primarily growth of our user base and increasing Streaming Hours, and both enabling us to generate more streaming services distribution and advertising-related revenue on our platform. If these arrangements do not continue to result in increased user base and Streaming Hours, and if that growth does not in turn lead to successfully monetizing that increased user activity, our business may be harmed. See also “—We may not be successful in our efforts to further monetize our expanding user base and streaming activity as we increase the amount of content offered and streamed across our platform, which may harm our business.”

The loss of a relationship with a licensed Roku TV partner (including as a result of our launchsales of Roku-brandedRoku-made TVs that are designed, made, and sold by us) could harm our results of operations, damage our reputation, increase pricing and promotional pressures from other partners and retail distribution channels, increase our marketing costs, and result in the loss of revenue. If we are not successful in maintaining existing and creating new relationships with any of these licensed Roku TV partners, or if we encounter technological, content licensing, or other impediments to these relationships, our ability to grow or maintain our business could be adversely impacted.

To continue to grow our user base, we must maintain and expand retail sales channels for our products and for the Roku products sold by our partners or licensees. The majority of our products and our licensed Roku TV partners’ products are sold through brick and mortar retailers and their online sales platforms, as well as online-only retailers. We also sell certain products directly through our website and internationally through distributors and retailers such as Coppel in Mexico, Magazine Luiza in Brazil, MediaMarkt in Germany, and Currys in the United Kingdom.retailers. As we are still a relatively recent entrant in certain international markets, we may not have established a strong reputation or relationships with retailers for those markets as compared to our retail sales channels in the United States or our competitors in international markets. See also “—We may be unable to successfully expand our international operations, and our international expansion plans, if implemented, will subject us to a variety of risks that may harm our business.”

We may beare reliant on certain retailers or distributors. Amazon, Best Buy, Target, and Walmart in total accounted for 81% and 76% of our devicesDevices revenue for each of the years ended December 31, 20242025 and 2023, respectively.2024. Furthermore, our licensed Roku TV partners may be reliant on the same or other retailers and distributors for a significant portion of their unit sales of Roku TV models. IfAt onetimes, or severalcertain retailers orand distributors werehave toreduced discontinuethe sellingnumber of our orand our licensed Roku TV partners’ products,products chooseavailable for sale, have chosen not to prominently display those products in their stores or on their websites, or closehave ordiscontinued severelyselling limitthose accessproducts. toSuch theiractions brickhave in the past decreased, and mortarmay locations,in the future decrease, the volume of our or our licensed Roku TV partners’ products sold could decrease, which would harm our business.sold. These risks may be exacerbated by our reliance on certain retailers or distributors, or when a major retailer in a jurisdiction commercializes televisions under brands that the retailer controls.

In addition, ifat any oftimes our existing licensed Roku TV partners choosehave chosen to work exclusively with, or divert a significant portion of their business with us, to other operating system developers,developers. thisThis may adversely impact our ability to continue to license the Roku TV OS and our smart TV reference design to TV brands and to grow our user base and monetize the Roku TV OS. Traditional retailers have limited shelf and end cap space in their stores and limited promotional budgets, and online retailers have limited prime website product placement space. Competition is intense for these resources, and a competitor with more extensive product lines, stronger brand identity, and greater marketing resources, such as Amazon or Google, possesses greater bargaining power with retailers. In addition, one of our online retailers, Amazon,which sellssell itsor may sell their own competitive streaming devices, smart TVs, and smart home devices, is able tomay market and promote thesetheir products more prominently on itstheir website,websites, and could refuse to offer or promote our products on itstheir website.websites. We also may face increased competition with Walmart (which currently makes and sells Onn. branded streaming products, including co-branded Roku TV models), in light of Walmart’s recent acquisition of Vizio (which also makes and sells smart TVs with a proprietary operating system). and the integration of Vizio’s operating system into Walmart products instead of other third-party proprietary operating systems. See also “—If our efforts to build and maintain a strong brand and maintain customer satisfaction and loyalty are not successful, we may not be able to attract or retain users, and our business may be harmed” and “—If we fail to differentiate our streaming platform and compete successfully with our competitors, it will be difficult for us to attract and retain users and our business will be adversely impacted.” Any reduction in our ability to place and promote our products, or increased competition for available shelf or website placement, could require us to increase our marketing or other expenditures to maintain our product visibility or could result in reduced visibility for our products, which may harm our business. In particular, the availability of product placement during peak retail periods, such as the holiday season, ishas criticalin tothe ourpast revenue growth,prevented, and ifmay wein arethe unablefuture toprevent, us from effectively sellselling our products during these periods, our business would be harmed.periods.

If our efforts to build and maintain a strong brand and maintain customer satisfaction and loyalty are not successful, we may not be able to attract or retain users, and our business may be harmed.

Building and maintaining a strong brand is important to attract and retain users, as potential users have a number ofmany TV streaming choices. Successfully building a brand is a time-consuming and comprehensive endeavor, and our brand may be negatively impacted by factors, some of which are beyond our control, such as the quality and reliability of the Roku TV models made by our licensed Roku TV partners and the quality of the content provided by our content partners. Our competitors may be able to achieve and maintain brand awareness and consumer demand for their products more quickly and effectively than we can. Many of our competitors are larger companies and may have greater resources to devote to the promotion of their brands through traditional advertising, digital advertising, or website product placement. See also “—If we fail to differentiate our streaming platform and compete successfully with our competitors, it will be difficult for us to attract and retain users and our business will be adversely impacted.” If we are unable to execute on building a strong brand, it may be difficult to differentiate our business and streaming platform from our competitors in the marketplace, which may adversely affect our ability to attract and retain users and harm our business.

If we or our licensed Roku TV partners encounter problems with the limited number of contract manufacturers weor primarilyfail dependto upon,accurately forecast inventory needs, our operationsbusiness couldmay be disrupted.harmed.

We do not have any internal manufacturing capabilities and rely on a limited number of contract manufacturers to build our players, smart home products, and Roku-brandedRoku-made TVs. OurSimilarly, while some of our licensed Roku TV partners have internal manufacturing capabilities, others rely primarily or exclusively upon contract manufacturers areto vulnerablebuild to,the amongRoku otherTV issues:models that our licensed Roku TV partners sell to retailers. If we or our Roku TV partners have difficulties with contract manufacturers, our business may be harmed.

Our two reportable segments are the platformPlatform segment and the devicesDevices segment. Platform revenue is generated from the sale of digital advertising (including direct and programmatic video advertising, ads integrated into our UI,user interface (“UI”), and related services) and streaming services distribution (including subscription and transaction revenue shares, the sale of Premium Subscriptions, the sale of owned and operated subscription services, and the sale of branded app buttons on remote controls).

Devices revenue is generated from the sale of streaming players, Roku-brandedRoku-made TVs, smart home products and services, audio products, and related accessories. We expect to continue to manage the average selling prices of Roku streaming devices in an effort to sell more devices, which we believe will increase our Streaming Households. We expect that this trade off from devicesDevices gross profit or loss to grow Streaming Households should result in increased platformPlatform revenue and platformPlatform gross profit over time.

Key Performance Metrics and Non-GAAP MeasureMeasures

The key performance metrics we use to evaluate our business, measure our performance, develop financial forecasts and make strategic decisions are Streaming Households, Streaming Hours, ARPU,Platform revenue, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”), and Free Cash Flow.

AveragePlatform Revenue per User

We generate platformPlatform revenue from the sale of digital advertising (including direct and programmatic video advertising, ads integrated into our UI, and related services), as well as streaming services distribution (including subscription and transaction revenue shares, the sale of Premium Subscriptions, the sale of owned and operated subscription services, and the sale of branded app buttons on remote controls). Our ad inventory primarily includes video ad inventory from AVOD content in The Roku Channel, native display ads throughout the Roku Experience, as well as ad inventory we obtain throughas consideration from our streaming services distribution agreements with our content partners. To supplement supply, we purchase advertising inventory from our content partners, on an as needed basis. To date, we have generated most of our platformPlatform revenue in the United States.

We generate devicesDevices revenue from the sale of streaming players, Roku-brandedRoku-made TVs, smart home products and services, audio products, and related accessories. We generate most of our devicesDevices revenue in the United States. In our international markets, we primarily sell our devices through wholesale distributors which, in turn, sell to retailers.

Cost of revenue, devices is comprised mostly of manufacturing costs payable to third-party manufacturers for devices we sell which include streaming players, Roku-brandedRoku-made TVs, audio products and smart home products. Cost of revenue, devices also includes technology licenses or royalty fees on devices we sell, inbound and outbound freight, duty and logistics costs, third-party packaging, inventory provisions, and allocated overhead costs related to facilities, third-party cloud services, and salaries, benefits, and stock-based compensation for operations personnel.

Other income, net primarily consists of interest income on cash and cash equivalents,equivalents and short-term investments, foreign currency re-measurement,remeasurement, transaction gains and losses, and net change in the fair value of our strategic investments.

Our income tax expense consists primarily of income taxestax expense in certain foreign jurisdictions where we conduct business and income taxestax expense (benefit) in the United States. We have a full valuation allowance against net deferred tax assets in the United States.States Weas expectof toDecember maintain31, this2025. Given our current and anticipated future earnings, we believe that there is a reasonable possibility that the valuation allowance foragainst these net deferred tax assets may be reversed within the foreseeablenext future.twelve to eighteen months.

Platform revenue increased by $528.7$622.1 million, or 18%, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023,2024, primarily due to higher revenue from streaming services distribution, suchspecifically ashigher Premium Subscription revenue shareand onhigher contentsubscription subscriptionsrevenue from both third-party and Premiumour Subscriptionsowned throughand Theoperated subscription services. In addition, advertising revenue increased due to improved monetization from video ads, including Roku Channel,Ads inManager, additionour toself-service higherad advertisingplatform, revenue,offset despite continuedby weakness in the media and entertainment vertical.

Devices revenue increasedremained byrelatively $99.6 million, or 20%,flat during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The increase wasin primarilyrevenue is due to higher revenuesales fromof Roku-brandedRoku-made TVs. This wasTVs, partially offset by lower revenuesales fromof streaming players, audio and smart home products.players. During the year ended December 31, 2024,2025, the average selling price of all devices shipped increased by 18%6% and the volume of all devices shipped increaseddecreased by 5%3% as compared to the year ended December 31, 2023.2024. The increase in average selling price is due to increased sales of Roku-brandedRoku-made TVs, which generally sell at higher prices compared to streaming players. The increasedecrease in the volume of devices shipped was mainly due to higherlower sales of Roku-brandedstreaming TVs.players.

Cost of Revenue and Gross Profit (Loss)

GrossCost profitof for therevenue, platform segment increased by $319.4$351.6 million, or 20%,21%, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023,2024. The increase was primarily driven by thehigher overalllicensing growthcosts infor ourPremium platformSubscriptions revenue.and higher costs of acquiring content.

The costCost of revenue, devices increased by $136.0$3.9 million, or 25%,1%, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The increase was primarily driven by higher manufacturing costs of $115.0$17.8 million, driven by the higher cost of manufacturing Roku-branded TVs, and higher freight costs of $31.8$9.5 million. These increases were partially offset by lower inventory reserves of $15.4 million and lower royalty costs of $3.8 million.

Gross loss for the devicesDevices segment increased by $36.4$1.7 million, or 83%,2%, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The increase in gross loss was driven by a higher cost of manufacturing ofand productsfreight in the devices segment as compared to the revenue generated from them.costs. We manage the average selling prices of our products to grow our Streaming Households.Households, which we expect to result in increased Platform revenue and Platform gross profit over time.

Research and development expenses decreasedincreased by $158.3$9.3 million, or 18%,1%, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The decreaseincrease was primarily driven by lowerhigher restructuringcloud chargeshosting and consulting expenses of $110.6$22.6 million,million offset by lower personnel-related expenses of $25.2$12.4 million,million and lower office facilities and IT infrastructure expenses of $17.5 million, and lower consulting expenses of $3.3 million.

Sales and marketing expenses decreasedincreased by $100.6$31.6 million, or 10%,3%, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The decreaseincrease was primarily driven by lowerhigher restructuring charges of $87.7 million, lower office facilities and IT infrastructureadvertising expenses of $13.8$37.3 million, higher amortization expense of $11.6 million, and higher consulting expenses of $3.4 million. These increases were partially offset by lower personnel-related expenses of $12.1 million, partially offset by higher consulting expenses of $6.1 million and higher marketing, retail, and merchandising expenses of $5.9$23.3 million.

General and administrative expenses decreasedincreased by $32.2$15.3 million, or 8%,4%, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The decreaseincrease was primarily driven by higher legal and consulting expenses of $26.7 million. The increase was partially offset by lower facilities expense of $5.3 million, lower restructuring charges of $56.5$4.5 million, partially offset by higher legal, consulting, and professional services of $17.6 million and higherlower personnel-related expenses of $5.6$1.0 million.

Total other income, net, increased by $5.3$1.3 million, or 6%,1%, during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The increase was primarily driven by anlower foreign currency remeasurement losses of $5.3 million and higher fair value remeasurement gains on our strategic investment in convertible promissory notes of $1.5 million. The increase in interest income of $11.9 million from higher cash balances,was partially offset by higherlower foreigninterest exchangeincome losseson our cash, cash equivalents, and short- term investments of $5.0$3.5 million due to exchange rate fluctuations and ahigher decreaseinterest in other income of $1.9 million mainly from lower unrealized gainsexpense related to theour changecredit in the fair valueagreement of strategic$1.5 investments.million.

Income tax expense decreased by $0.7$3.9 million, or 7%,41%, for the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024. The decrease was primarilyis due to a reduction in U.S. federal and certain state taxes due to the 2025 enactment of the One Big Beautiful Bill Act and a tax benefit fromrelated theto our acquisition of Frndly TV, partially offset by a one-time release of a valuation allowance on certain foreign deferred tax assets, partially offset by increasesassets in U.S. and foreign current taxes due to the increase of taxable earnings.2024.

As of December 31, 2024,2025, we had cash and cash equivalents of $2,160.2$1,587.1 million and short-term investments of $730.2 million. Approximately 5%9% of our cash was held outside the United States in accounts held by our foreign subsidiaries, which are used to fund foreign operations.operations, and all short-term investments were held in the United States.

Our primary sources of cash are receipts from platformPlatform and devicesDevices revenue. The primary uses of cash are costs of revenue including costs to acquire advertising inventory, costs to license and produce content, third-party manufacturing costs for our products, as well as operating expenses such as personnel-related expenses, consulting and professional service expenses, facility expenses, and marketing expenses. Other uses of cash include purchases of property and equipment andequipment, mergers and acquisitions.acquisitions, and share repurchases.

We have pursued merger and acquisition activitiesactivities, insuch as the past,acquisition of Frndly TV, and we may pursue additional merger and acquisition activities in the future, including the acquisition of rights to programming and content assets. Though we do not expect to incur expenses for facilities and building related costs at the same level as we have in the last few fiscal years, we will continue to incur expenses on the maintenance of our facilities and purchases of computer systems, and other property and equipment, in order to support future growth in our business. These activities may materially impact our liquidity and capital resources.

Net cash used in financing activities ofincreased $89.2during million2025 forcompared the year ended December 31,to 2024 was primarily due to tax payments of $96.4$164.9 million to net settle equity awards vested during the period and the payment of $2.2$150.0 million in issuancerepurchases costs related toof our Creditcommon Agreement,stock, partially offset by $9.4 million received from proceeds from the exercise of employee stock options.options of $34.7 million.

During the year ended December 31, 2025, we recognized an impairment charge of $2.9 million for operating lease right-of-use assets. During the year ended December 31, 2024, we recognized an impairment charge of $22.6 million for operating lease right-of-use assets and an impairment charge of $7.0 million for property and equipment related to a decision to cease the use of certain office facilities and related property and equipment. During the year ended December 31, 2023, we recognized an impairment charge of $131.6 million for operating lease right-of-use assets and an impairment charge of $72.3 million for property and equipment related to a decision to sub-lease and cease the use of certain office facilities and related property and equipment. There were no impairments of property and equipment or operating lease right-of-use assets during the year ended December 31, 2022. See Note 1718 to our Consolidated Financial Statements in Part II, Item 8 of this Annual Report.

Our accounts receivable isare stated at invoice value less estimated allowances that include allowance for sales returns and sales incentives. We perform an ongoing analysis of various factors including our historical experience, promotional programs, claims to date, and other business factors to determine the allowances for sales returns and sales incentives. IfThe ouractual estimatesresults regarding accounts receivable allowancescould differ from theour actual results, the losses or gains could be material.estimates.

We depend on a small number of content partners for nearlymore than half of our Streaming Hours, and if we fail to maintain these relationships, our business could be harmed.*

Historically, a small number of content partners have accounted for a significant portion of the hours streamed on our platform. In the three months ended MarchJune 31,30, 2026, the top three streaming services (excluding The Roku Channel) represented nearlymore than half of all hours streamed in the period. If, for any reason, we cease distributing apps that have historically streamed a large percentage of the aggregate Streaming Hours on our platform, our Streaming Hours, user base, or Roku streaming device sales may be adversely affected, and our business may be harmed.

We are reliant on certain retailers or distributors. Amazon, Best Buy, Target, and Walmart in total accounted for 86%79% and 83% of our Devices revenue for each of the three months ended MarchJune 31,30, 2026 and 2025.2025, respectively. Furthermore, our licensed Roku TV partners may be reliant on the same or other retailers and distributors for a significant portion of their unit sales of Roku TV models. At times, certain retailers and distributors have reduced the number of our and our licensed Roku TV partners’ products available for sale, have chosen not to prominently display those products in their stores or on their websites, or have discontinued selling those products. Such actions have in the past decreased, and may in the future decrease, the volume of our or our licensed Roku TV partners’ products sold. These risks may be exacerbated by our reliance on certain retailers or distributors, or when a major retailer in a jurisdiction commercializes televisions under brands that the retailer controls.

We have incurred operating losses in the past, and we may incur operating losses in the future. Although we achieved profitability in certain quarters, we may not be able to maintain profitability in the future. As of MarchJune 31,30, 2026, we had an accumulated deficit of $1,502.9$1,401.4 million. Our operating expenses have increased in the past and may increase again in the future as we expand our operations and invest in growth and new areas. If our revenue and gross profit do not grow at a greater rate than our operating expenses, we may not be able to maintain profitability in the future. We expect our profitability to fluctuate in the future for a number of reasons, including without limitation the other risks and uncertainties described herein. We may also encounter unforeseen operating or legal expenses, difficulties, complications, delays, and other factors that may result in losses in future periods.

Our gross margins vary across our devices and platform offerings. OurIn Devices segment experienced negativeparticular, gross margin for the three months ended March 31, 2026, and our Advertising and Subscription segments experienced positive gross margin for the three months ended March 31, 2026. Gross margins on our streaming devices vary across models and can change over time as a result of product transitions, pricing and configuration changes, component costs, device returns, and other cost fluctuations (including due to the impact of tariffs or other trade restrictions). Although our Devices, Advertising, and Subscription segments had positive gross margin for the three and six months ended June 30, 2026, gross margin for certain segments has been negative in the past and may be negative in the future.

If we fail to manage our growth effectively, including if we grow our business too rapidly, we may not be able to execute our business strategies, which could harm our business and adversely affect our financial condition, results of operations, or cash flows. The challenges of managing our growth effectively may be exacerbated due to the pendency of the Mergers.

Our revenue and gross profit are subject to seasonality and other potential fluctuations, and if our sales during the affected periods fall below our expectations, our business may be harmed.*

Seasonality and certain one-time events significantly affect our business. For example, our revenue and gross profit are traditionally strongest in the fourth quarter of each fiscal year due to higher consumer purchases and increased advertising during holiday seasons. Furthermore, in preparation for the fourth quarter holiday season, we recognize significant discounts in the average selling prices of our products through retailers in an effort to grow our user base, which typically reduce our Devices gross margin in the fourth quarter. From time to time, our sales and marketing expenses may fluctuate or be weighted towards part of the year. Additionally, certain other events have in the past, and may in the future, impact the amount of advertising spending on our platform.

On September 16, 2024, we entered into a credit agreement (the “Credit Agreement”), by and among us, as borrower, certain of our subsidiaries, as guarantors, the lenders and issuing banks party thereto, and Citibank N.A., as administrative agent (the “Agent”), providing for (i) a five-year revolving credit facility in an aggregate principal amount of up to $300.0 million, and (ii) an uncommitted increase option of up to an additional $300.0 million exercisable upon the satisfaction of certain customary conditions. The Credit Agreement provides for a $100.0 million sub-facility for the issuance of letters of credit, and certain existing letters of credit were deemed outstanding under this facility. The Credit Agreement will mature on September 16, 2029. Proceeds from the Credit Agreement may be used for general corporate purposes, including to finance working capital requirements. As of MarchJune 31,30, 2026, we had not borrowed against the Credit Agreement.

Effective in the first quarter of 2026, our reportable segments changed. We now manage and report our operating results through three reportable segments: Advertising, Subscriptions, and Devices. Previously, we reviewed and managed the new Advertising and Subscriptions segments as a combined Platform segment. This change was made to reflect our ongoing evaluation and monitoring of our business, including changes made to both our internal reporting and the information reported to the CODM. SegmentPrior period segment financial information for the first quarter of 2025 has been retrospectively adjusted to reflect these changes.

Subscriptions revenue is generated from the sale of subscriptions to end users, including subscription revenue shares from content partners, the sale of Premium Subscriptions, and the sale of owned and operated subscription services.services, Subscriptionsand revenue alsofrom content distribution arrangements, which primarily includes subscription revenue shares from content partners and the sale of branded app buttons on remote controls.

We streamed 38.737.9 billion and 35.835.4 billion hours during the three months ended MarchJune 31,30, 2026 and 2025, respectively, reflecting an increase of 8%.7%.

We use Platform revenue as a primary metric to measure the performance of our business because it represents our ability to successfully monetize our platform. Platform revenue includes revenue from both our Advertising and Subscriptions segments and its growth is one of our strategic priorities. Platform revenue was $1,131.2$1,221.0 million and $880.8$975.5 million for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Adjusted EBITDA is a non-GAAP financial measure. The Adjusted EBITDA reconciliation excludes total other income, net, stock-based compensation expense, depreciation and amortization, restructuring charges, merger-related costs, and income tax expense (benefit) from the net income (loss) of the period. We believe Adjusted EBITDA is useful as a supplement in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. However, this non-GAAP financial measure has limitations, and should not be considered in isolation or as a substitute for our GAAP financial information, such as GAAP net income (loss). In addition, Adjusted EBITDA may not be comparable to similarly titled metrics of other companies due to differences in methods of calculation.

Our Free Cash Flow was $538.8$704.1 million and $298.4$392.0 million for the TTM periods ended MarchJune 31,30, 2026 and 2025, respectively.

We generate Subscriptions revenue primarily from the sale of subscriptions to end users, including subscription revenue shares from content partners, the sale of Premium Subscriptions, and the sale of owned and operated subscription services.services, Subscriptionsand revenue alsofrom content distribution arrangements, which primarily includes subscription revenue shares from content partners and the sale of branded app buttons on remote controls.

Our income tax expense (benefit) consists primarily of income tax expense in certain foreign jurisdictions where we conduct business and income tax expense (benefit) in the United States. We have a full valuation allowance against net deferred tax assets in the United States as of MarchJune 31,30, 2026. Given our current and anticipated future earnings, we believe that there is a reasonable possibility that the valuation allowance against these net deferred tax assets may be reversed within the next twelve months. The exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that the Company actually achieves.

Comparison of the Three and Six Months Ended MarchJune 31,30, 2026 and June 30, 2025

Advertising revenue increased by $129.9$133.8 million, or 27%,25%, during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025, primarily drivendue byto an increase in video ad impressions delivered. Video impressions increased by 59%,40%, reflectingdriven greaterby higher user engagement and growth in videostreaming consumptionhours on our platform as well as benefits from various monetization initiatives.platform. This increase was partially offset by lowera decrease in the average price per impression of 14%,12%, which was driven primarily fromby changes in product and country mix.

Subscriptions revenue increased by $120.5$111.7 million, or 30%,26%, during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025, primarily due to a 12%11% increase in the number of subscriptions and a 22%25% increase in the average price per subscription. IncludedAdditionally, withinthe these26% increasesgrowth was driven in part by the additionexpansion of our owned and operated subscription services, including both the acquisition of Frndly TV in May 2025 and the launch of Howdy in August 2025.

Devices revenue decreased by $22.2$1.8 million, or 16%,1%, during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The decreasevolume inof revenueall isdevices primarilyshipped duedecreased toby 31% driven by lower sales of streaming players.players, During the three months ended March 31, 2026,while the average selling price of all devices shipped decreasedincreased by35%, 3%due andto higher sales of Roku-branded TVs in the volumecomparable of all devices shipped decreased by 15% as compared to the three months ended March 31, 2025.periods.

Cost of revenue, advertising increased by $29.3$15.4 million, or 14%,6%, during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The increase was primarily driven by a $39.8$22.3 million increase in the costs of acquiring and delivering licensed content for TRC due to an increase in user engagement and video ad impressions delivered, partially offset by a $6.8$7.7 million decrease in content amortization.

Cost of revenue, devicesadvertising decreasedincreased by $22.3$44.7 million, or 14%,10%, during the threesix months ended MarchJune 31,30, 2026 as compared to the threesix months ended MarchJune 31,30, 2025. The decreaseincrease was primarily driven by lowera manufacturing$62.0 andmillion freightincrease in the costs of $24.3 millionacquiring and $3.6delivering million,licensed respectively,content for TRC due to an increase in user engagement and avideo $7.6ad millionimpressions decrease in personnel costs. These decreases weredelivered, partially offset by a $8.2$14.5 million increasedecrease in inventorycontent reserves.amortization.

Research and development expenses increased by $4.9$1.7 million, or 3%,1%, during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The increase was primarily driven by higher facilities and IT expenses of $5.2 million and higher cloud hosting and consulting expenses of $3.7$5.9 million. The increase wasmillion, partially offset by $2.3lower personnel expenses of $4.9 million ofdue non-recurringto restructuring costsdecreases in thestock-based priorcompensation year.expense.

Sales and marketing expenses decreased by $2.5$20.0 million, or 1%,8%, during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The decrease was primarily driven by lower marketing expenses of $8.8$28.5 million, partially offset by a $3.0$7.0 million increase in intangible amortization from our Frndly TV acquisition, and a $1.8 million increase in cloud hosting and consultingpersonnel expenses.

General and administrative expenses increased by $7.9$24.9 million, or 8%,25%, during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The increase iswas primarily due to an$18.7 increasemillion of $9.8merger-related costs incurred in connection with our proposed transaction with Fox, and the recognition of $13.4 million in non-income based taxes, partially offset by lowera decrease in other legal and consulting expenses of $3.1$9.7 million.

Total other income, net, increaseddecreased by $19.7$4.8 million, or 114%,(17)%, during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily due to a $3.2 million unrealized gain recognized during the three months ended June 30, 2025 on the sale ofour strategic investmentsinvestment ofin $13.4convertible million.promissory notes.

Income tax expense increased by $16.0$11.0 millionmillion, or 189%, for the three months ended MarchJune 31,30, 20262026, and by $27.0 million, or 143%, for the six months ended June 30, 2026, as compared to the threecorresponding monthsprior endedyear March 31, 2025.periods. The increaseincreases waswere primarily drivenattributable byto an increase inhigher pre-tax book income, partially offset by decreases due to a reduction in U.SU.S. income taxes dueresulting tofrom the 2025 enactment of the One Big Beautiful Bill Act.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $1,649.9$2,001.8 million and short-term investments of $730.3$555.4 million. Approximately 6%4% of our cash was held outside the United States in accounts held by our foreign subsidiaries, which are used to fund foreign operations, and all short-term investments were held in the United States.

We had outstanding letters of credit secured by the Credit Agreement of $39.5 million as of MarchJune 31,30, 2026. As of MarchJune 31,30, 2026, we had not borrowed against the Credit Agreement, and we were in compliance with all of the covenants of the Credit Agreement. See Note 11 to our Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report for additional details.

During the threesecond monthsquarter ended March 31,of 2026, we repurchased 1.00.5 million shares of our Class A common stock through our stock repurchase program. All share repurchases were made using cash resources. As of March 31, 2026, $150.0 million remained of our $400 million stock repurchase program. See Note 12 to our Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report for additional details.

Cash provided by operating activities increased in the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 primarily due to net income of $85.7$249.9 million in the current year, compared to a net loss of $27.4$16.9 million in the prior year, which was partially offset by lower non-cash charges primarily due to lower stock-based compensation and a decrease in other operating assets and liabilities due to an increase in collections and payments made.year.

Net cash provided by investing activities increased during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 due primarily to the sales and maturities of short-term investments, net of purchases, of $175.0 million and sale of strategic investments of $18.4 millionmillion. andThe increase was partially offset by purchases of property and equipment of $3.1$6.9 million.

Net cash used in financing activities increased during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025 primarily due to $162.7 million in repurchases of our common stock, tax payments of $51.5$110.8 million to net settle equity awards vested during the periodperiod, and $100.0 million in repurchasespayment of ourcontingent commonconsideration stock,related to the acquisition of Frndly TV of $15.2 million, partially offset by proceeds from the exercise of employee stock options of $1.8$36.6 million.

For a description of our purchaseoperating lease obligations and operating leasepurchase obligations, refer to Note 1310 and Note 1013 to our Condensed Consolidated Financial Statements in Part I, Item 1 of this Quarterly Report, respectively.