Page 1

Roku February 18 , 2021 Fellow Shareholders , Roku had both a strong Q4 and 2020. For both periods we achieved record revenue , gross profit and adjusted EBITDA , as consumers and the TV industry continued to shift to streaming . We surpassed 50 million active accounts , driven by the popularity of Roku® streaming players and Roku TV ™ models . In 2020 , the Roku OS was the No. 1 smart TV operating system in the U.S. with 38 % unit share of smart TVs sold . Despite a pandemic - related advertising slowdown in the U.S. , our advertising business proved resilient with Q4 Roku monetized video advertising impressions more than doubling year - over - year , as advertisers increasingly followed users from traditional pay TV to streaming . 2020 also saw prominent content publishers reorient toward TV streaming , further expanding the content selection for our users . 2020 Highlights • Total net revenue grew 58 % YoY to $ 1,778 million ; • Platform revenue increased 71 % YoY to $ 1,268 million ; • Gross profit was up 63 % YoY to $ 808 million ; • • Roku added 14.3 million incremental active accounts in 2020 to reach 51.2 million at year end ; Streaming hours increased by 20.9 billion hours YoY to a record 58.7 billion ; • Average Revenue Per User ( ARPU ) increased $ 5.62 YoY to $ 28.76 ( trailing 12 - month basis ) ; • In 2020 , 38 % of all smart TVs sold in the U.S. were Roku TV models Key Operating Metrics Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 YoY % Active Accounts ( millions ) 36.9 39.8 43.0 46.0 51.2 39 % Streaming Hours ( billions ) * 10.9 12.3 14.6 14.8 17.0 55 % ARPU ( $ ) $ 23.14 $ 24.35 $ 24.92 $ 27.00 $ 28.76 24 % Summary Financials ( $ in millions ) Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 YoY % Platform revenue $ 259.6 $ 232.6 $ 244.8 $ 319.2 $ 471.2 81 % Player revenue 151.6 88.2 111.3 132.4 178.7 18 % Total net revenue 411.2 320.8 356.1 451.7 649.9 58 % Platform gross profit 162.4 130.6 138.5 194.7 300.8 85 % Player gross profit ( 0.7 ) 10.5 8.4 20.2 4.6 nm Total gross profit 161.6 141.1 146.8 214.8 305.5 89 % Platform gross margin % 62.5 % 56.2 % 56.6 % 61.0 % 63.8 % 130bps Player gross margin % -0.5 % 11.9 % 7.5 % 15.2 % 2.6 % 310bps Total gross margin % 39.3 % 44.0 % 41.2 % 47.6 % 47.0 % 770bps Research and development 78.8 88.3 84.4 88.4 94.7 20 % Sales and marketing 61.8 68.2 64.2 71.0 96.1 55 % General and administrative 38.4 39.7 40.5 43.5 49.5 29 % Total operating expenses 179.0 196.3 189.0 202.9 240.3 34 % Income ( loss ) from operations ( 17.4 ) ( 55.2 ) ( 42.2 ) 12.0 65.2 nm Adjusted EBITDA ¹ 15.1 ( 16.3 ) ( 3.4 ) 56.2 113.5 650 % Adjusted EBITDA margin % 3.7 % -5.1 % -1.0 % 12.4 % 17.5 % 1380bps Outlook ( $ in millions ) Q1 2021E Total net revenue $ 478 - $ 493 Total gross profit $ 234 - $ 241 Net Income ( loss ) ( $ 23 ) - ( $ 16 ) $ 27 - $ 34 Adjusted EBITDA 2 ¹ Refer to the reconciliation of net loss to adjusted EBITDA in the non - GAAP information in an appendix to this letter . 2 Q1 2021E reconciling items between net loss and non - GAAP adjusted EBITDA consist of stock - based compensation of approximately $ 40 million , depreciation and amortization and other net adjustments of approximately $ 10 million . * Reported streaming hours data reflects previously disclosed adjustments to our streaming hours calculations for periods prior to Q4 2020 . Roku Q4 and Full Year 2020 Shareholder Letter 1