Roku Stock Soars on Strong Platform Revenue Forecast

80 million active users spend an average of 4.1 hours daily on Roku's platform. That's more time than most people spend at the gym in a week, and it's exactly why investors sent Roku shares up 15% in a single trading session.

The streaming platform company raised its annual revenue forecast, citing stronger-than-expected growth in its platform business—the division that sells ads and takes cuts from streaming services. While competitors struggle with subscriber churn and content costs, Roku found a different path to profitability.

The Ad-Supported Streaming Gold Rush

Traditional TV advertising is hemorrhaging money. Cable viewership among the coveted 18-49 demographic has plummeted 40% over the past five years. Meanwhile, Roku's ad-supported channels are thriving, offering something cable can't: precise targeting and measurable results.

Walmart, Ford, and McDonald's are shifting millions in ad spend to Roku's platform. They're not just buying eyeballs—they're buying data. Roku knows when viewers pause, rewind, or skip ads. It knows which commercials drive actual purchases. That intelligence is worth premium pricing.

But the competition isn't sleeping. Netflix launched its ad tier, Disney+ followed suit, and even Amazon Prime Video is testing new ad formats. The question isn't whether ad-supported streaming will grow—it's who'll capture the biggest slice.

The Platform Play vs. Content Wars

While Netflix spends $15 billion annually on original content, Roku takes a different approach. It doesn't need to create the next "Stranger Things." Instead, it profits from hosting everyone else's content while collecting valuable viewer data.

This strategy has risks. If major studios decide to pull their content and go direct-to-consumer, Roku's value proposition weakens. But for now, even Disney and Warner Bros. need Roku's reach to find audiences cutting the cord.