Roku's stock fell sharply and remains about 80% below its peak despite a 27% gain in 2025, prompting investor interest. The company shifted revenue from hardware to its platform, with hardware falling from 54% in Q2 2017 to 12% in the latest quarter. The platform now generates most revenue through advertising and subscription arrangements and delivers a roughly 51% gross margin, while hardware has generally been sold at a loss. Hardware still matters for household penetration to drive platform monetization, but its financial impact is expected to decline over five to ten years. Roku benefits as an agnostic streaming platform but faces competition from large tech companies.
Because of the potential to achieve strong returns, it makes sense that investors want to find companies benefiting from secular trends. fits the bill, but long-term shareholders haven't been rewarded. As of Aug. 22, this streaming stock trades an alarming 80% below its peak, even though it has climbed 27% in 2025. This huge dip might prompt investors to want to add the business to their portfolios. However, it's important to know these three things about Roku first.
The growth in the platform segment is the catalyst. Roku makes most of its money these days from advertising and subscription arrangements. For instance, Roku might control certain ad inventory from other streamers. Or when a customer signs up for a streaming service on Roku, the company generates revenue. The beauty of this is that the platform segment commands a strong gross margin of 51%, while hardware has generally been sold at a loss in recent quarters.
Collection
[
|
...
]