Typically, most earnings portals play some kind of hold music before the call is set to officially begin.
Would you be surprised to learn that Roku plays ads for itself instead?
And it makes sense. Roku’s video advertising business has been booming lately, as CEO Anthony Wood shared during the company’s Q2 call on Thursday evening.
Although Wood didn’t share a specific breakdown, he did say video advertising grew at a rapid pace during the second quarter – surpassing overall platform revenue, as well as the OTT and digital ad markets in the US.
That’s a big growth rate, considering Roku’s platform revenue increased 18% year over year from $824 million to $975 million, due in part to its recent acquisition of subscription streaming service Frndly.
The Frndly tech has already been integrated into live TV search results on the Roku platform.
Overall revenue rose 15% in the quarter to $1.1 billion, which helped Roku turn a profit in Q2.
Diversify, diversify, diversify!
According to Wood, Roku is reaping the benefits of a platform revenue growth strategy the company set in place roughly 18 months ago, which revolves around demand diversification.
For example, the Roku Ads Manager, a self-serve platform released in September, has already helped attract a wide range of small and medium-sized businesses.
The self-serve market is still mostly untapped, according to CFO Dan Jedda, who estimated the size of the market to be worth more than $60 billion.
“Every month we do this, we see more advertisers and more revenue on it, which is why we’re very excited about it,” Jedda added.
Similarly, Roku will keep leaning into its third-party partnerships with DSPs, SSPs and measurement providers, including the recently announced deal with Amazon.
Every deal that Roku strikes with a DSP is customized to that buying platform’s unique technology stack, said Charlie Collier, president of Roku Media, which allows marketers to buy ads programmatically in whatever manner they choose.
Everything’s coming up upfronts
Speaking of programmatic, Collier noted that most of Roku’s upfront deals for the 2025-2026 TV season are on track to be executed that way, because marketers are increasingly turning to television as a performance driver.
Although Roku just recently completed its official upfront cycle with what Collier called “positive” results overall, especially in sports, programmatic has transformed the upfront buying process into a “full yearlong marketplace.”
While there is still a concern that more programmatically available CTV inventory will have an adverse effect on CPMs, Roku says it didn’t see any evidence of pricing deflation.
“We feel very good [where] we’re positioned, regardless of where the prices fluctuate in the market,” said Collier.
