Shares of Roku (ROKU +6.31%) popped on Friday after the streaming pioneer's third-quarter profits exceeded investors' expectations.
As of 1:35 p.m. ET, Roku's stock price was up more than 6% after rising by over 16% earlier in the day.
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Market share gains are fueling Roku's growth
Roku's revenue climbed 14% year over year to $1.2 billion. The streaming device maker and digital advertising platform operator is broadening the distribution of its smart TVs and accessories while deepening its relationships with marketers.
Roku continues to gain share in the massive U.S. digital ad market. It formed a partnership with Amazon in June that's enabling advertisers to more accurately and cost-effectively target 80 million connected TV households in the U.S.
NASDAQ: ROKU
Key Data Points
Better still, Roku was able to keep a lid on operating expenses. That helped the streaming leader generate positive operating profit for the first time since 2021, to the tune of $9.5 million. Roku's net income, in turn, improved to $0.16 per share from a loss of $0.06 per share in the third quarter of 2024. That easily surpassed Wall Street's estimates, which had called for earnings per share of $0.09.
Streaming growth should propel Roku's profits
Management sees revenue growing by 12% year over year to $1.35 billion in the fourth quarter, aided by political ad spending and Roku's recent purchase of streaming service provider Frndly TV.
Additionally, the long-term shift from traditional TV to streaming services remains firmly intact.
"Looking ahead, we are confident in our ability to deliver double-digit platform revenue growth while increasing operating margins in 2026 and beyond," Roku CEO Anthony Wood and CFO Dan Jedda said in a letter to shareholders.
