Fellow Shareholders,

July 28, 2022

In Q2, there was a significant slowdown in TV advertising spend due to the macro-economic environment, whichpressured our platform revenue growth. Consumers began to moderate discretionary spend, and advertisers
significantly curtailed spend in the ad scatter market (TV ads bought during the quarter). We expect thesechallenges to continue in the near term as economic concerns pressure markets worldwide. In response, wetook steps in Q2 to significantly slow both operating expense and headcount growth. While our revenue andgross profit growth have slowed, we continue to win advertising share and grow active accounts. We remain
confident in our industry leadership in TV streaming, the size of the opportunity in front of us, and our uniqueassets, including the Roku TV OS, The Roku Channel, and our ad platform.

Q2 2022 Key Results
•
•
•
•
•
•
•

1

Total net revenue grew 18% year over year (YoY) to $764 million
Platform revenue increased 26% YoY to $673 million
Gross profit was up 5% YoY to $355 million
Roku added 1.8 million incremental active accounts to reach 63.1 million
Streaming hours were 20.7 billion hours, a decrease of 0.2 billion hours from last quarter
Average Revenue Per User (ARPU) grew to $44.10 (trailing 12-month basis), up 21% YoY
We surpassed a milestone with $1 billion in Upfront commitments 1

The Upfront process began in Q2 and concluded in Q3.
Roku Q2 2022 Shareholder Letter1

Account Acquisition

In Q2, we added 1.8 million incremental Active Accounts to reach 63.1 million. Reduced consumer discretionary
spend is pressuring many verticals including TV and player sales. Retailers managed through elevated U.S. TV
inventory and temporarily lowered TV prices in Q2, which helped soften the decline in TV unit sales in thequarter. Overall U.S. TV and player industry sales, as well as Roku TV and player unit sales, were lower than Q2
2021. With our growing ARPU, we continued to absorb higher costs in our player business to insulate consumers
from price increases. This resulted in player gross margin being down 18 points year over year.
In Q2, the Roku operating system (OS) remained the No. 1 selling smart TV OS in the U.S. The Roku OS was theNo. 2 selling smart TV OS (and the No. 1 licensed smart TV OS) in Mexico, where nearly 1 in 4 smart TVs sold
was a Roku TV model. With our partner Elektra in Mexico, we recently introduced a new line-up of HKPRO Roku
TV models in screen sizes ranging from 32 to 55 inches. In Canada, we extended our partnership with Walmart
with the launch of onn. Roku TV models. This follows the launch of the CTV channel on the Roku platform, giving
viewers in Canada access to live and on demand programming from the country’s most-watched television
network. And in the U.S., we announced our first outdoor Roku TV model, the Outdoor Element Roku TV.
Our streaming devices continue to be recognized for their value and the outstanding experience they provide
our customers. Tom’s Guide recently named the Roku® Streaming Stick® 4K the "Best streaming device.” Forbes
named the Roku Streaming Stick 4K the “Best Budget-Friendly 4K Streaming Device” and the Roku Ultra the“Best Full-Featured 4K Streaming Device Overall.” And Popular Science named the Roku Streambar the “BestSoundbar Under $100”and the Roku Streambar Pro the “Best Soundbar Under $200.”

Engagement

Globally, our users streamed 20.7 billion hours in Q2, an increase of 19% year over year. In Q2, our Streaming
Hours per Active Account per day was 3.7 hours globally vs. 7.5 hours of legacy pay TV per day consumed by theaverage U.S. household (Nielsen). We believe there is room to grow our engagement and closing this gap
represents a significant opportunity.

Content Distribution
With the growing availability of live programming such as sports and news on TV streaming, the last foothold oflegacy pay TV in the U.S. is diminishing. Hugely popular sports leagues, including the NFL, MLB, NBA, and MLS
are all shifting their presence to streaming. NFL Thursday night games and a selection of Friday night MLB games
are now both exclusively on streaming. For the NBA Finals, reach on the Roku platform 2 increased 34% year
over year vs 10% on legacy pay TV. And in a historic first, fans around the world will be able to stream every MLS
match, without any local blackouts/restrictions or the need for a legacy pay TV bundle. By next year, less thanhalf of U.S. households are expected to have legacy pay TV (according to eMarketer).

2

Streaming viewership accounts for livestream on channels that were airing the game live and excludes vMVPDs.
Roku Q2 2022 Shareholder Letter2

As consumers’ wages and savings are eroded by inflation, consumers can be expected to seek even more value
with their discretionary spend, which TV streaming provides. To provide a variety of pricing tier choices, many
popular subscription services are launching discounted, ad-supported options. We believe that free, adsupported services like The Roku Channel are well positioned to benefit as consumers seek to lower theirexpenses.
The Roku Channel
Roku continues to be a leader in free, ad-supported TV streaming. In Q2, The Roku Channel was, once again, a
top 5 channel on our platform in the U.S. by Active Account reach and by Streaming Hour engagement. With
more than 300 free channels across news, sports, music, and entertainment, The Roku Channel’s linear offering
was the #1 FAST 3 service by Active Account reach and Streaming Hour engagement on the Roku platform in the
U.S.
As more TV viewing shifts to streaming, users are seeking easy access to the content they are used to fromlegacy pay TV. In June, we partnered with NBCUniversal Local to launch local news channels on The Roku
Channel in major markets around the U.S., providing local weather, news and other programming, including
upcoming mid-term elections coverage. Also in June, we launched Espacio Latino in the U.S., a new destinationthat offers thousands of hours of Spanish-language programming, powered by a variety of new and existing
partners.
Roku Originals continue to build momentum with both users and advertisers. In June, we premiered the second
season of “Chrissy’s Court," which was our top-rated unscripted Roku Originals launch ever by reach anddelivered four times the unique views of the first season premiere. We also launched “Idea House: Mountain
Modern,” an all-new 10-episode series from “This Old House,” with Best Buy serving as presenting sponsor.
Advertisers have been excited about the unique opportunities to engage with Roku Originals and popular talent,
including our upcoming feature film “WEIRD: The Al Yankovic Story,” which will debut on November 4.

3

FAST: free ad supported linear streaming TV does not include on-demand content.
Roku Q2 2022 Shareholder Letter

3

The “WEIRD: The Al Yankovic Story” teaser trailer (https://www.roku.com/investor)
amassed 500 million impressions on social media within the first 48 hours of its release.
The Roku Channel's expanding breadth of content enables us to appeal to more users, drive increased interest
from advertisers, and attract more content partners who want to capitalize on the growing opportunities instreaming. While we will grow our investments in Roku Originals in order to provide new exclusive content forusers and advertisers, the foundation of our content spend will continue to be revenue share and fixed licensing
agreements, including output deals. Spend will be commensurate not only with the scale and growth of The
Roku Channel, but also with the broader macro environment.

Monetization

In Q2, Platform revenue increased 26% year over year to $673 million. This growth was lower than expected as
many marketers abruptly curtailed or paused advertising spend in the ad scatter market during the latter halfof Q2. According to a survey by Advertiser Perceptions, 47% of advertisers in the U.S. say they made in-quarter
pauses on ad spending on TV streaming, 44% on digital video, and 42% on legacy pay TV. We believe thispullback mirrors the start of the pandemic in 2020, when marketers prepared for macro uncertainties by quickly
reducing ad spend across all platforms.
Despite a challenging ad environment, we closed Upfront deals for the 2022-2023 TV season with all sevenmajor agency holding companies and surpassed a milestone of $1 billion in total commitments. We continue totake ad dollar share away from traditional TV. Our negotiations with brand advertisers occurred at the sametime as the broadcast networks, signaling a strategic shift to TV streaming, and 25% of all advertisers who
committed to Roku during the Upfronts were new commitments (did not participate last year).
We continue to invest in our ad platform for future growth. We recently announced a new product called
Shoppable Ads, which make shopping on TV streaming as easy as it is on social media. Viewers simply press“OK” with their Roku remote on a shoppable ad and proceed to checkout with their shipping and payment
details pre-populated from Roku Pay, our proprietary payments platform. Walmart will be the exclusive retailer
for the launch, a first-of-its-kind partnership. We also announced an industry-first collaboration with
Microsoft that will quantify how TV advertising on both legacy pay TV and TV streaming impacts online searches
to help marketers measure performance.

Roku Q2 2022 Shareholder Letter4Shoppable Ads make shopping on TV streaming as easy as it is on social media.
The significant and long-term opportunity in TV streaming is not changed by the current economic cycle. At thestart of the pandemic, ad spend slowed but ultimately rebounded as advertisers reset, and in many cases
accelerated, budgets into higher ROI mediums like TV streaming. Furthermore, a significant gap remains
between TV streaming viewership and ad spend. In Q2, U.S. consumers aged 18-49 spent more than half of their
TV time streaming while advertisers are expected to spend just 22% of U.S. TV ad budgets on streaming in 2022.
Over time, we expect this gap to close as advertising dollars continue to follow audiences to TV streaming.

Roku Q2 2022 Shareholder Letter

5Case Study
Finishing Touch Flawless wanted to find newcustomers in the beauty category. The DTC(direct to consumer) brand launched acampaign on Roku’s OneView Ad Platform andused our proprietary ACR (automatic content
recognition) data to exclude streamers exposed
to its traditional TV ads to drive incremental
reach. The campaign drove a 38% lift in sales(for those exposed to campaign vs. those notexposed) with 95% of those incremental sales
from customers new to the brand. 4

Outlook

We are in an economic environment defined by recessionary fears, inflationary pressures, rising interest rates,and ongoing supply chain disruptions. For the second half of the year, we are forecasting that advertising spend,
particularly in the scatter market, will continue to be negatively impacted. We also believe that consumer
discretionary spend will continue to moderate, pressuring both Roku TV and Roku player sales.
Taking these factors into consideration, our Q3 outlook is for total net revenue to increase approximately 3%
year over year to $700 million. We anticipate total gross profit of roughly $325 million, and adjusted EBITDA ofnegative $75 million. Finally, given the uncertainties and volatility in the macro environment, we arewithdrawing our full-year revenue growth rate estimate. We will remain focused on growing our market
leadership by further advancing our technology and brand, and continuing to execute our strategy.

Conclusion

Looking ahead, both our competitive positioning and balance sheet are strong, and we remain focused on thesignificant and long-term opportunity in TV streaming. We believe Roku’s value proposition for viewers, content
partners, and advertisers is unmatched, and we are confident in our strategy and growth potential. During
downturns, both consumers and advertisers seek even more value for every dollar spent. We offer consumers
low-cost devices and access to thousands of hours of free on-demand entertainment and hundreds of free linear
channels on The Roku Channel alone. And with our innovative ad platform built for TV streaming, we offer
advertisers measurable and superior ROI. We are focused on and continue to invest in a future where all TV andall TV ads are streamed.
Thank you for your support and Happy Streaming™!
Anthony Wood, Founder and CEO; and Steve Louden, CFO

4

As measured by third party provider. Sales lift compared to the control group. Campaign date: Q4 2021 in the U.S.
Roku Q2 2022 Shareholder Letter6Conference Call Webcast – 2 p.m. PT July 28, 2022
The Company will host a webcast of its conference call to discuss Q2 2022 results at 2 p.m. Pacific Time / 5 p.m. Eastern Timeon July 28, 2022. Participants may access the live webcast in listen-only mode on the Roku investor relations website atwww.roku.com/investor, and an archived webcast of the conference call will also be available 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 theproperty of Roku, Inc. and its affiliates. Trade names, trademarks and service marks of other companies appearing in thisshareholder letter are the property of their respective holders.
Media
Kim Sampson
ksampson@roku.com

Investor Relations
Conrad Grodd
cgrodd@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 haveincluded 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 canbe 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 bematerially 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. Thesestatements include those related to the shift of TV and TV advertising to streaming and our leadership position in that shift;market conditions affecting TV costs; our ability to insulate customers from elevated costs in the player business; the benefits,
features and availability of our streaming players, our audio devices and our partners’ Roku TV models; our room for growth inengagement; availability of live programming on streaming; the success of our new product launches in international markets;
supply chain disruptions; the strength, features and value of the Roku OS; advertising opportunities on our platform; The Roku
Channel’s expanding reach, engagement and content offering; the growth and monetization of and investment in The Roku
Channel; the benefits of The Roku Channel to viewers, content partners and advertisers; the benefits of our integrated ad
platform; player gross margin; our ability to navigate through macroeconomic headwinds; pressure on Roku TV and Roku player
sales; changes in consumer discretionary spend and ad spend; the amount and foundation of our content spend; our financial
outlook for the third quarter of 2022 as well as our qualitative color on our business in 2022 and beyond; our investments; andour 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 for the year ended December
31, 2021. Additional information also will be available in our Quarterly Report on Form 10-Q for the quarter ended June 30,
2022. All information provided in this shareholder letter and in the tables attached hereto is as of July 28, 2022, and weundertake no duty to update this information unless required by law.
Roku Q2 2022 Shareholder Letter

7

ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)(unaudited)Three Months Ended

Six Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021$$

532,303112,816
645,119$ 1,320,067
178,038
1,498,105$

296,054
113,203409,257

187,328
119,525
306,853

563,039
215,110778,149

341,918
212,347554,265

377,109(21,960)
355,149

344,975(6,709)338,266

757,028(37,072)
719,956

656,9118,126
665,037

196,637
184,971
84,054
465,662(110,513)

113,276
93,67862,228269,182
69,084

360,635
331,493
161,831853,959(134,003)

214,857
182,551
122,739
520,147
144,890

(746)
1,520
774
69,858(3,609)73,467 $(2,116)2,238
122(133,881)
4,746(138,627) $(1,488)1,961
473
145,363(4,400)149,763(1.02) $(1.02) $

1.14
1.06

Net Revenue:
Platform
PlayerTotal net revenue
Cost of Revenue:
Platform (1)Player (1)Total cost of revenue
Gross Profit (Loss):
Platform
PlayerTotal gross profit
Operating Expenses:
Research and development (1)Sales and marketing (1)General and administrative (1)Total operating expenses
Income (Loss) from Operations
Other Income (Expense), Net:Interest expense
Other income (expense), net
Total other income (expense), net
Income (Loss) Before Income Taxes
Income tax expense (benefit)
Net Income (Loss)$(1,059)1,829
770(109,743)
2,578(112,321) $Net income (loss) per share — basic
Net income (loss) per share — diluted$$(0.82) $(0.82) $Weighted-average common shares outstanding — basic
Weighted-average common shares outstanding — diluted

673,163
91,243
764,406

136,849
136,849

0.55
0.52

$
$

132,705
142,122

136,198
136,198

998,829
220,473
1,219,302

131,198
141,234(1) Stock-based compensation was allocated as follows:
Cost of revenue, platform$

Cost of revenue, player

366

$

167

$

602

$

365

435

315

1,004

730

Research and development

38,22918,577

66,61935,131

Sales and marketing

27,917

14,27551,82827,638General and administrative

20,077

9,212

36,551

19,219Total stock-based compensation$

87,024$

Roku Q2 2022 Shareholder Letter

42,546$

156,604$

83,083

8

ROKU, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data)(unaudited)
As ofJune 30, 2022

December 31, 2021

AssetsCurrent Assets:
Cash and cash equivalents$

Accounts receivable, net of allowances of $32,052 and $56,827 as of

2,050,412$

2,146,043

714,606

752,393

Inventories

76,07750,276

Prepaid expenses and other current assets

121,720

105,795

Total current assets

2,962,815

3,054,507

Property and equipment, net

217,558

177,567

Operating lease right-of-use assets

544,414345,660

June 30, 2022 and December 31, 2021, respectively

Intangible assets, net

75,19384,126

Goodwill

161,519

161,519

Other non-current assets

352,035

258,766

Total Assets$

4,313,534$

4,082,145$

113,768$

124,921

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable
Accrued liabilities

575,277

549,055

Current portion of long-term debt

84,928

9,883

Deferred revenue, current portion

50,64145,760824,614729,619—

79,985

Deferred revenue, non-current portion

27,452

28,726

Operating lease liability, non-current portion

587,981394,724

Other long-term liabilities

77,59582,485

1,517,642

1,315,539

14

14

3,024,897

2,856,572

(371)

41

(228,648)(90,021)2,795,892

2,766,606

Total current liabilities
Long-term debt, non-current portion

Total Liabilities
Stockholders’ Equity:
Common stock, $0.0001 par value
Additional paid-in capital
Accumulated other comprehensive income (loss)
Accumulated deficit
Total stockholders’ equity
Total Liabilities and Stockholders’ Equity$

Roku Q2 2022 Shareholder Letter

4,313,534$

4,082,145

9

ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)(unaudited)
Six Months Ended
June 30, 2022

Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by(used in) operating activities:(138,627) $149,763

Depreciation and amortization
Stock-based compensation expense
Amortization of right-of-use assets
Amortization of content assets
Provision for (recoveries of) doubtful accounts
Other items, net
Changes in operating assets and liabilities:
Accounts receivable
Inventories
Prepaid expenses and other current assets
Other non-current assets
Accounts payable
Accrued liabilities
Operating lease liabilities
Other long-term liabilities
Deferred revenue
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Purchases of property and equipment
Acquisition of businesses, net of cash acquired
Purchase of strategic investment
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from equity issued under at-the-market offering, net ofissuance costs
Repayments of borrowings
Proceeds from equity issued under incentive plans
Net cash provided by financing activities
Net increase (decrease) in cash, cash equivalents and restricted cash
Effect of exchange rate changes on cash, cash equivalents andrestricted cash

22,902
156,604
25,235
100,497
467(335)

20,412
83,083
13,97928,093(1,099)(8)

37,320(25,801)(19,743)(45,564)(11,871)(98,661)(16,125)148
3,607(9,947)(56,661)
5,899(30,235)(72,195)
16,433
16,543(18,394)(527)(10,326)
144,760(52,209)—(40,000)(92,209)(13,898)(136,778)—(150,676)—

989,615(5,000)11,693
6,693(95,463)(2,500)10,285997,400
991,484(67)—

Cash, cash equivalents and restricted cash —beginning of period

2,147,670

1,093,249

Cash, cash equivalents and restricted cash —end of period$

June 30, 2021$

Roku Q2 2022 Shareholder Letter

2,052,140$

2,084,733

10

Six Months Ended
June 30, 2022

Cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents
Restricted cash, non-current
Cash, cash equivalents and restricted cash —end of period$$

2,050,412
1,728
2,052,140$

2,083,273
1,460
2,084,733

$

1,444

$

1,290

$

4,752

$

487

Non-cash consideration for business combination

$

—

$

15,200Services to be received as part of a business combination

$

—

$

6,300

Unpaid portion of property and equipment purchases

$

3,551

$

3,709

Unpaid portion of acquisition-related expenses

$

—

$

271

Supplemental disclosures of cash flow information:
Cash paid for interest
Cash paid for income taxes$

June 30, 2021

Supplemental disclosures of non-cash investing and financing
activities:

NON-GAAP INFORMATION (in thousands)(unaudited)Three Months Ended
June 30, 2022

Six Months Ended

June 30, 2021

June 30, 2022

June 30, 2021

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

Net income (loss)$(112,321) $73,467

Other (income) expense, net

(770)

(774)

(122)

(473)

Stock-based compensation

87,02442,546

156,604

83,083

Depreciation and amortization

11,416

10,80722,902

20,412

Income tax expense (benefit)
Adjusted EBITDA

$

2,578

(3,609)(12,073) $122,437$(138,627) $

4,746
$

45,503

149,763(4,400)$248,385

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 ho

Roku Q2 2022 Shareholder Letter11