We can get started. Please note that important disclosures appear as a handout available in the registration area and on the Morgan Stanley public website. With that, I'm Thomas Yeh, Media and Entertainment Analyst at Morgan Stanley. It is my sincere pleasure to welcome Dan Jedda, CFO of Roku. Dan, thanks so much for being here. Thanks for having us. We're excited to be here. Great. So at a high level, I just wanted to start off with talking about the fundamental growth drivers of the company from here as you see it. You're exiting this year, seeing acceleration in the core platform revenue growth to roughly 20%. Can you just help us unpack the drivers between content distribution, advertising opportunities that support your confidence in being able to sustain that double-digit growth rate into next year? Yeah, the 20% you quote is a number that we've said ex-political, ex-Frndly. Frndly is our new acquisition. So when you back out Frndly for this year, when you back out political for last year, that's a 20% growth rate number, and to answer your question specifically, both our subscription activities, or our content distribution activities, and our advertising activities are both growing at roughly very close to that 20% mark, which is exceptional that we see. Within advertising, we have multiple activities that are growing well. When you think about the new ad products that we've launched, when you think about the integrations that we've done, I'm sure you'll ask a question on the integration with DSPs that we've done to bring more demand on our platform. Yes, they're growing 20%. On the subscription side, which is really an initiative we've started investing heavily in as we exited 2023, we said it very clearly as we exited 2023, is we are going to invest in subscriptions because we see it as an additional revenue stream. We see it as a core strategy of owning the operating system or owning the platform. We're now seeing the benefits of investing in that. That takes a little bit longer to roll out in terms of new initiatives and new products, and we're seeing that, so we have our subscription business growing. We have our advertising activities growing very well. They're both growing right at that 20% level. We've said that we expect double-digit platform revenue growth to continue. That is, again, we expect that double digit to be on both the subscription side and the advertising activities, especially as we roll out new products on both lines of business. Great. I want to touch on that subscription piece for sure, but starting with the advertising side, CTV as a broader industry is clearly a fast-growing area of the advertising market as a whole, and we're seeing a lot of streaming companies who started ad-free now move aggressively towards advertising monetization as well, so how does that growing inventory and competition impact Roku's ability to retain its share of that broader CTV opportunity? Yeah, it's not surprising that you've seen this big shift into the CTV advertising market. The reason being is it is a big TAM, and when you have a big TAM like that, you're going to have more competition come into the space, so when you think about the overall total TV advertising market, linear plus digital, it's around $90 billion, depending on which third-party publication you read, but it's roughly around $90 billion. The digital, the CTV component of that is roughly $30 billion and growing. The linear component of that is roughly $60 billion and having negative growth rate, so you're seeing this shift, significant shift from linear into digital. You're also seeing the eyeballs and the hours shift from linear into digital, and by the way, that shift has been much quicker than the ad dollars. The ad dollars are catching up to where the hours and the eyeballs are. So this shift's going to continue. You're going to continue to see growth into the CTV space. And with that, you'll have more supply, more ad impressions, more companies doing AVOD. That is not new. We fully expected that. The benefit that we have is we are at the platform level. So we are in greater than 50% of broadband households in the U.S. We have significant scale outside the U.S. and in the countries we operate as well. But the ad market is maturing in the U.S., especially in CTV. We have the scale. So as more inventory comes in, as more demand comes in, the TAM increases. We have more ad products coming to market. We have more focus on performance, where I think is where this market is going in the programmatic side. On the performance side, we are uniquely positioned to benefit from that shift, and then I'll just say there's one more area that's adding to this CTV market, and that's the shift from search and social, which is primarily performance-driven. You're seeing that shift into the CTV market because of new ad products that are coming in that are highly performant, and again, I'm sure we'll touch on that later on, but these secular tailwinds into the market are significant, and not only are we going to grow because the market is going to grow, Roku will grow because of the innovative platform that we had, the ability to monetize the platform, so I would fully expect that our percentage share of this growing market to improve over time as well. Okay, interesting. Well, on that programmatic point, a lot of these large-scale players are focused on balancing some of these new programmatic initiatives that they're launching with also growing their direct CTV ad channels. And I just wanted to get your thoughts on how you see that broader trend of programmatic ad buying for CTV dollars evolving and how that impacts you? Yeah, I think this shift will continue. It's already been a pretty big shift into programmatic. And why is it shifting to programmatic is the right question. There are multitudes of reasons. There is a piece of the market that will be very upper-funnel focused, brand-focused, and reach-focused. Some of that will shift to programmatic as well because it's easier to measure. But I do believe that the lion's share of this market has and will continue to shift to programmatic because of the performant nature of the programmatic process. And again, I think Roku is uniquely positioned to benefit from the shift to programmatic. One of the most important initiatives we had was when we opened up to integrate with all demand-side platforms. It was several years ago, two and a half years ago, we were very focused on our own demand-side platform, our own DSP, a product called OneView, and we figured out early on that that was very limiting in the demand that it can bring to us, and we had plenty of supply because the Roku channel and our run-of-network is already at scale, so we shifted to open up to all DSPs, basically trying to meet the advertiser to wherever they wanted to transact. If they wanted to transact through a DSP, they can do that. If they want to buy direct, they can do that. If they want to transact along the CPM curve, we can meet them wherever they want to advertise. That has been extraordinarily successful in bringing new demand to Roku on the advertising side, so we are a beneficiary of this shift to programmatic. And ultimately, I believe programmatic will be very efficient. You talked about incoming supply with AVOD. Along with that will be incoming demand. It will be a highly efficient market. I think the auction market will be incredibly liquid. It already is. It will be even more liquid. And I think the companies that will benefit most are the ones that are highly performant. And that's where we believe we've got an advantage because not only do we have scale with over half of broadband households, everyone on Roku is logged in. So we know who they are. And we can benefit from our first-party data in becoming the most performant platform out there, which again, I think plays very well to the shift to programmatic. Got it. One of the most significant third-party DSP integrations you've done recently is with Amazon. I think that's a big focus. Can you maybe just give us a sense of the early read-throughs on changes to the ad buying behavior post this integration and what areas of the integration you see as maybe providing more enhanced values for the advertisers? Yeah, we're very excited about our integration with Amazon. We've just launched that integration at the end of Q3, start of Q4. Very early on, it's performing as we expected. The Amazon deal is a little unique in that it is platform-wide, so many of our DSP deals, agreements are with Roku as a publisher, TRC plus our inventory share across the platform. The benefit of the Amazon DSP is it's that, plus it is a platform-wide agreement where we use our first-party data along with their first-party data to improve the performance on the Amazon DSP, and of course, we are able to monetize that relationship, that agreement, so it's a little unique. It's very unique in that aspect of it, and we're very excited about it. And there will likely be, I suspect, shifts within demand-side platforms based on how they perform. But again, from a Roku perspective, we are agnostic on the DSP because we've integrated with all of them from Amazon to Trade Desk to World to Yahoo, et cetera. And we'll go deeper on all of them depending on the DSP and how deep they want to go in terms of integration. But we're very excited about across all the DSPs. And again, if an advertiser wants to transact on a certain DSP, we will transact with them on that because we're integrated with them and because, again, we have a unique platform-level area to recognize our streamers and use that as a way to become more performant. Do these deeper integrations potentially allow for the broader CTV industry to accelerate its opportunity in terms of the shift into that overall area of spend? They absolutely do. Because again, when you're running through the DSPs, you can become more performant in nature. You can measure performance better. Again, there are many advertisers who just want to hit reach. And that can also happen. That can be through DSP. It doesn't need to be through DSP. But you can just get for broad reach, which is the upper funnel. But again, I think the market's going to move to mid-funnel and potentially lower funnel because of the performant nature. So you can truly measure advertising that way. We saw some of that shift post-Liberation Day when there was a shift from the guaranteed side to the non-guaranteed side, meaning advertisers wanted some flexibility given the uncertainty of the market. And we didn't see any shift overall, but we did see some shift from what was guaranteed to, hey, we just want more flexibility. And we're going to run a lot of that flexibility through the programmatic pipes. But again, that is where the advertiser wished to transact. That's fine with us. We'll transact with them wherever they want to be. Yeah, I wanted to ask about the broader health of the advertising market in general. You've spoken to that point about shorter-term non-guaranteed campaigns. It seems like the advertiser increasingly wants greater flexibility. Is that a new normal? Or do you expect a shift back maybe to how, depending on how macro trends evolve? Yeah, I think that could be the new normal because the pricing is such that this market might not differentiate pricing in any material way between guaranteed and non-guaranteed. I think that's what will matter in this perspective. I have this view that, very similar to performance-based advertising, the liquidity in the market, and especially in the auctions, will dictate a very efficient price unless it's ultra premium. I do think ultra premium will continue to have a big chunk of this market. And we play in that space. When you think of our home screen, when you think of Roku City, when you think of some of our sponsorships and our zones on the left nav of our home screen, those are ultra premium ad placements. And we treat them as such because of the massive reach of our home screen. So again, we have that. And we have an ultra-premium. Along the programmatic side, we have standard CPMs all the way down to lower CPMs. So for example, app installs generally play in the lower. They have a much lower CPM than certain campaigns that are not focused on it, that have other metrics in mind or other KPIs. We have that whole gamut across our platform that we will participate in and do participate in. So from that standpoint, I'm not really focused on is the market shifting. I'm not focused on are the CPMs coming down. That doesn't impact us like it might impact others because we have a tremendous amount of supply on our platform with TRC and then, of course, across our entire platform on run-of-network inventory. And quite frankly, if we ever were to run out of inventory, which would be a great problem to have, it's not that expensive for us to create more ad inventory because we control the UI. We control the platform. And we can do that in an inexpensive way. Other content partners, they might have to spend a lot of marketing to get a new subscriber or even spend more on content, significantly more on content if they run out of inventory. We don't have that same situation. We can nudge people in certain ways based on our UI. So we can create more inventory in a relatively inexpensive way. Got it. On that point, I guess heading into 2026, I do think that there's a view that there's a lot more sports and political advertising coming to CTV. And there are continued migrations that can lift that broader opportunity set. Compared to prior cycles, what has Roku done in the last year or two that really helps improve your position in terms of capturing some of that incremental dollars? Well, again, it really goes, so it's interesting. You hear that one of the reasons why linear hasn't shifted as much to digital or has not matched the hours is because of areas like sports, which are still significant, and it's a good point. I think that is changing. I think the shift is accelerating because I think sports are now as prevalent on digital as they were on linear, and I love to use the NFL as an example. I know we're in London, and I should be talking about soccer or football, but I'm just going to use the NFL because I'm more familiar with it in terms of its shift, so five years ago, all NFL was shown on linear. There was very little on digital, maybe some simulcasts where it was a combination of linear and digital. But the bulk of it was on linear and I would say exclusively on linear. And then over time, that shifted to where the NFL had some digital, some linear. And now, fast forward to today, I believe every game is available on digital. And many games, double-digit% of the NFL is only available on digital. So you see the shift of sports happening. Again, we'll benefit from that, from the ad dollars shifting from linear to CTV. On top of it, we have the opportunity as a platform to help subscribers find out where to get their sports. We have a sports zone on the left nav. We have areas like Olympic Zone when the Olympics are. We'll have a World Cup Zone or a World Cup nav that'll help our streamers find the matches that they want to see. All this is positive from a user experience. We're able to monetize it through sponsorships. We're able to monetize it through the subscriptions that get purchased on Roku. So there are multiple factors. All this shift helps us. Got it. I mean, another area that you've talked a lot about in the past is the Roku Ads Manager and the self-serve opportunity. I wanted to touch on that as well. Can you maybe just help us get a sense of how big it currently is in terms of contribution, how much realistically it could be contributing over the next few years, and what steps are you taking to really stimulate the advertiser demand on that front? What kind of indicators are you looking for? Yeah, Ads Manager has been a phenomenal success for us. Let me just back up and talk about the TAM of that. So Ads Manager is our ad product focused on self-service, the SMB market, which has been accustomed to highly performant search and social advertising that now is shifting into CTV advertising. And you could say, well, why is this shift happening? Why hasn't it happened before? Is this going to happen or not? Yes, there is going to be a piece of this market that has shifted and will continue to shift for two main reasons. One, the self-service nature and the performant nature of CTV can now mimic the performant nature of search and social. If you have a KPI like conversion, site visits, certain targeted geo-targeted reach or geo-targeted audiences, all this is now possible on CTV. It's a highly performant way to advertise now because of the way it can be measured. The second impediment to the shift to CTV was that you had to generate. An SMB is not necessarily interested in generating an expensive video to sell their brand or sell their site or whatever they're trying to sell. Gen AI has completely changed that. You can now generate a CTV video, a commercial, if you will, in seconds for next to nothing. It's just not expensive to do. So the two impediments of why SMB wasn't on CTV is now gone. And that's not something that's going to happen. That has happened. The impediments are gone. The self-service nature is very simple. You can sign up with several clicks, put in KPIs like conversion, or you can put in KPIs like site visits. You can add to cart. All the KPIs or many of the KPIs you can get on search and social, you can now get on CTV, and then you're off and running. You can say, create a video for me, or you can upload your own video. You can have Gen AI create a video, and you are up and running in minutes with a budget that you set, with KPIs that you set that you can measure. That's a very exciting tailwind to the CTV ad market that I think could be and will be significant over time. We have a product on that called Roku Ads Manager doing very well. It's exactly what you want to see in a new and innovative product launch. I look at it one of the ways I look at it is on an ARR basis. And it's exactly what you want to see that every month you see a sequential improvement in the metrics, whether it's revenue, advertisers, repeat rate, et cetera. It's exactly what you want to see. So I do believe that over time, that will be a significant contributor because this TAM is just too big. SMB advertisers are looking for new channels to advertise their small or medium-sized business. And I guess the impediment beyond this is you just got to tell them about it. So we're investing in marketing. You have to tell the SMBs, hey, come try this out. Because we're pretty convinced once they try it out, they're going to keep advertising with us. So one of our, we're investing in R&D on the SMB experience to make sure it's easy. It has to be easy. It has to be a small number of clicks to make sure that they can create a Gen AI-based commercial. And of course, on marketing to tell them about this awesome ad product. So it's a growing percentage of your revenue. It is a growing percentage of our revenue. It is growing far faster than the overall platform business. And I have extraordinarily high expectations of this as being a meaningful contributor to our overall ad business over time. Got it. Shifting to the subscription piece of the business, one of the key areas of growth that you highlighted at the outset was this push towards premium subscriptions on the Roku channel. Can you just give us an update on helping tell us size that growth in the business and what kind of benefits you might be seeing as you increasingly seem to be acting as a wholesaler for your partner services, whether that's through engagement trends or retention that you're seeing? Yeah. So as I mentioned on your first question, our subscriptions and content distribution is growing similar to our advertising business right now on an ex-Frndly, ex-political basis. A big part of that is premium subscriptions. Premium subscriptions is growing very well. And while we've always had subscriptions that we monetize, we've really started to focus on this as we exited 2023. And we're now seeing a lot of our initiatives that we've been building and will continue to build come out in premium subscriptions. I said in Q3, we announced a tier one premium subscription partner with us doing very well. We've also said that we have several others in the process of being launched. So expect more tier one services to be launched in the future. And the reason why is because it's a win for Roku. It's a win for the partner. How is it a win for the partner? When you're a premium subscription, you are embedded throughout the UI, or you can be embedded throughout the user experience. You're part of TRC. You can be part of the home screen experience. As opposed to if you're not, you have one ingress into the experience, and that's the app. So is it better to have multiple ingress into the content you provide or one ingress, one entry? Of course, multiple is far better. It's a better streamer experience. It's better for our content partners. So I fully expect that to be a continued driver of growth because it's doing well. And then on top of that, and this is also important, is we're launching new products for subscriptions. Some of them are just placement. The content row at the top of our home screen is a relatively new placement. It's an ML-based placement on top of our home screen. Subscriptions are in that, in addition to TRC, and some of our other Frndly will be in that content row as an owned and operated service, but again, subscriptions sit up in that, and that is a way that we can monetize our subscriptions better. We have new product that we have new things we're working on that I won't say what they are yet, but there's multiple new initiatives that are product-based that will help in terms of reducing churn that will help in terms of the streamer to help them better manage their subscriptions. All this is positive for our customers, and it's positive for our subscription partners as well. OK, understood. I want to also just ask about the broader industry, which has a lot going on in terms of your streaming partners, and consolidation is heavily in the news right now. Price increases continue to happen. More broadly, as a distribution partner, what kind of trade-offs do you consider when you're negotiating these subscription take rates, and how do you think about other forms of participating in your partner's economics? Yeah, on the price increase, I would say it this way on price increases, which I do believe as VOD will likely continue to increase price. We're seeing this a lot. Many, many partners have increased price. I suspect they will continue to increase price. I would say it this way. If the partner benefits from a price increase, we're going to benefit from a price increase. I mean, that's a general rule of thumb, but it's by and large true. They know what they're doing when they increase price. They know that if there is some churn, that there will be offset through higher SVOD revenue. Again, when they benefit, we'll benefit because we monetize the subscription on our platform when they monetize the subscription. So on the consolidation piece, I would say this. There's a lot going on in this world. It's not surprising that there's some consolidation going on. I think that our scale play of being over 50% of broadband households makes any sort of consolidation less of an issue for us. We are a must-have platform at over 50% broadband penetration. I think we will stand to benefit if the acquirer stands to benefit from us simply because, again, we're a must-have in terms of apps. I will say also, I missed this opportunity on premium subscriptions. We just launched premium subscriptions in Mexico. Brand new, just launched it. It tells you how, and we'll launch more countries from a premium subscription. I should have said that. I missed that. That's also important because, again, we're starting to utilize our subscription business to monetize our international footprint even when the ad market is still relatively immature, so Mexico is a great example on we have tremendous scale. We have almost as much scale in Mexico as we do in the U.S. Incredible scale. But the ad market has just been slower to move to digital in Mexico for a variety of reasons. But we can still monetize that scale through subscriptions because we're now very focused on subscriptions. So launching premium subscriptions in Mexico, very strategic for us. And we'll do more countries. OK, got it. Before we run out of time, I do want to talk on margins and profitability, which is very important. And we're reaching an inflection point there, it seems, on EBITDA. Maybe just to start off on the gross margin side, you spoke to some expectations that gross margins would remain broadly stable into next year. If we just think about the revenue mixes that go into that, my thought has been that premium subscriptions, as you mentioned, being a growth area, would be a potential incremental headwind to the margin mix. How should we think about the primary puts and takes in terms of headwinds and tailwinds that are contributing into that stable gap? Yeah, we have many different margin structures across all our different revenue streams. And we have a pretty well-diversified set of revenue streams. We are not just an ad business, far from it. I would argue that we're advertising. We're M&E advertising. We have a tremendous amount of what we call enterprise-based or brand advertising. We have performance advertising. We have subscriptions. We have content distribution deals. We have ads manager focus on the SMB market. All of them have different GM structures. But they're all getting better in terms of that. That is my focus, is how do we get better? And then mix plays out what it is. Premium subscriptions, slightly lower margins, growing very well. But so is a lot of our high-margin business on the ad side because we get tremendous leverage in terms of our inventory splits that we get from our partners, as well as just generally being able to sell more ads with having some fixed basis in our cost of goods sold. We've added new ad units on the home screen that are highly profitable. Think of anything on the home screen highly profitable from an advertiser from a margin perspective. All this mixes out to that 51%-52% margin structure that I've changed, that I've said is what we expect to have going forward. We've also got, I would say, data licensing revenue now that helps offset. Anything that's slightly below 50% can be offset in that new advertising or in that new advertising line that we have. You bring that down to EBITDA. We have roughly 200 basis points of EBITDA margin improved in 2025 based on three quarters of actual and our fourth quarter guide. I said very clearly in last quarter, we expect that trend to continue with the same basis point improvement. I think probably as important as EBITDA and becoming profit positive, which we did in Q3 and guided to in Q4, is our free cash flow continues to grow in proportion to our EBITDA. So we are CapEx light. We are investing in R&D, but we're doing that within the $2+ billion of fixed OpEx that we have. We don't have a lot of capital CapEx across the company. That is a huge benefit. So free cash flow is growing. Actually, free cash flow as a% of EBITDA, it's more than EBITDA. It was more and it will be more in 2025. It will likely be more in 2026, so it all flows down to our North Star metric, which is free cash flow and free cash flow per share, which our monetization initiatives are absolutely focused on, and I think it's important that we know that it is a CapEx light, and we continue to see that improvement, and then within capital allocation, we've offset a big chunk of our dilution. SPC is trending in the right way for us. It's a real expense. We view it as such. It's actually going down this year. I suspect it will go down again in 2026. That's a big positive for us, and then we announced a share buyback. We're spending some of our free cash flow on keeping dilution very de minimis, which is a goal we have. Great. I think we're running out of time. So thank you so much for. Great. Thanks for having us. Thanks for coming, everyone.