Can Roku’s Revenues Double By 2020?

by Trefis Team
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Roku Inc. (NASDAQ: ROKU) has seen its total revenues grow by 86% from $399 million in 2016 to $743 million in 2018. Revenue is expected to increase to $1.1 billion in 2019 and further to $1.6 billion by 2020, which amounts to the revenue base more than doubling (111% projected growth rate between 2018-2020) in two years.


  • Roku’s platform business, which makes revenue through advertising and subscription, is expected to contribute $0.7 billion to Roku’s 2019 revenues, making up 67% of Roku’s $1.1 billion in revenues for 2019.
  • The platform segment contribution is about twice that from the players’ business, which includes the sale of streaming players and TVs.
  • Roku’s platform business is expected to provide $1.4 billion, that is 59% of the $2.4 billion in total revenue the company is expected to add between 2017 to 2019.
  • This platform revenue growth has been key to Roku’s 444% price appreciation during the same period, further helped by improving margins, and strong expansion in Roku’s valuation multiple. We discuss Roku’s Valuation analysis in full, separately.
  • Our dashboard Roku Revenues: How Does Roku Make Money? discusses 2020 expectations along with past performance for Roku’s revenue drivers, including active users, average revenue per user (ARPU), and competitive comparisons with Amazon and Apple.

Roku’s Business Overview

What Need Does It Serve?

  • Helping users avoid logging in to different streaming platforms to view different content, Roku allows you to watch paid and free content from the internet such as Netflix, Amazon, Hulu, YouTube, etc.
  • The only thing Roku streaming devices and a TV needs is an internet connection to get going.

Has Two Operating Segments

  • Platform: Roku generates platform revenue from advertising sales, subscription and transaction revenue share, sales of branded channel buttons on remote controls, and licensing arrangements with TV brands and service operators.
  • Players: Roku generates player revenue from the sale of streaming players through consumer retail distribution channels, including major brick and mortar retailers, such as Best Buy and Walmart, and online retailers, primarily Amazon.


  • Roku faces substantial competition from large technology and consumer electronics companies including Amazon, Google, and Apple.
  • These large competitors have helped to increase consumer awareness of TV streaming and have contributed to the growth and evolution of the overall streaming media marketplace.
  • However, their resources and brand recognition pose significant competitive challenges.

Segment-wise Revenue Performance


  • The platform division has added $312 million in revenues in the last two years, with the revenue addition expected to more than double in the near future, as Trefis projects the division to add close to $770 million to its revenue base between 2018 and 2020.
  • Higher revenue is expected to be driven by healthy growth in active user accounts and a rise in ARPU.
  • Average active user accounts increased from 11 million in 2016 to 23 million in 2018. It is set to grow further to about 43 million by 2020.
  • Sharp growth in user base is likely to be driven by new player launches and smart TV operating system (OS) integrations, that include new Roku streaming players launched in September 2019, new smart soundbars at Best Buy and Walmart, and new Roku smart TVs from OEM partners like TCL.
  • Healthy growth in advertising revenue (which doubled in the last one year) has led to steady growth in ARPU.
  • This trend is expected to continue in the near term as advertising revenue is projected to grow further following the acquisition of dataxu, Inc., a demand-side platform (DSP) company that enables marketers to plan and buy video advertising campaigns.


Players’ revenue has increased from $294 million in 2016 to $326 million in 2018. To understand how Players’ division is expected to perform in the next two years and how Roku’s total revenue growth trend compares with that of its major peers, view our interactive dashboard.


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