• by Wayne Friedman , Yesterday

Another strong quarterly period for streaming distributor Roku showed a sharp 25% rise in advertising revenue ($672.8 million) and a similar 26% gain ($548.2 million) in subscriptions.

This comes after Fox Corp. announced in June that it would buy Roku for $22 billion in cash and stock.

Total company-wide Roku revenue -- including device business sales -- grew 22% to $1.35 billion, while gross profit climbed 35% to $674 million.

The rise in advertising revenue was pushed higher due to “higher margin ad products,” which include its new Roku Home Screen page, which it calls “one of the most valuable pieces of real estate in TV.”

Video advertising on its platform outpaced other U.S. digital and over-the-top/connected TV (CTV) advertising markets, according to the company, according to data provided by Guideline’s Standard Media Index.

“We do not doubt that Roku outperformed the overall digital advertising market,” says Madison & Wall. “However, SMI primarily captures agency-directed spending, making it an incomplete benchmark for the broader market.”

“Advertising budgets are increasingly flowing through direct channels that may bypass traditional agency buying systems, and these channels are growing faster than agency-directed spending.”

Strong video advertising came alongside Roku active users' streaming hours usage gains, which climbed 7% in the period to 37.9 billion hours. Roku says it benefited from increased monetization of its inventory.

Roku also says political advertising showed growth in the second quarter, outperforming the comparable period for the 2024 U.S. Presidential election period.

A combined Fox/Roku Channel would have given Fox Corp. -- for all its platforms -- a 10.2% share of monthly U.S. TV viewership in June, in third place behind YouTube and Walt Disney, per Nielsen.

A Fox/Roku merger is estimated to have a combined $9 billion in annual advertising revenue, with $6.5 billion for Fox and $2.5 billion for Roku.

On Thursday, Roku's stock price closed 2% higher to $150.07.