Roku, Inc Q3 FY2025 Earnings Call

Good day, and thank you for joining us. Welcome to Roku's Third Quarter 2025 Earnings Conference Call. Please note that today's conference is being recorded. I will now turn it over to Conrad Grodd, Vice President of Investor Relations. Please proceed.

Good afternoon. Welcome to Roku's Third Quarter 2025 Earnings Call. Joining us on today's call are Anthony Wood, Roku's Founder and CEO; Dan Jedda, our CFO and COO; Charlie Collier, President Roku Media; and Mustafa Ozgen, President, Devices. On this call, we'll make forward-looking statements, which are subject to risks and uncertainties. Please refer to our shareholder letter and periodic SEC filings for risk factors that could cause our actual results to differ materially from these forward-looking statements. We'll also present GAAP and non-GAAP financial measures. Reconciliations of non-GAAP measures to the most comparable GAAP financial measures are provided in our shareholder letter. Unless otherwise stated, all comparisons will be against the results for the comparable 2024 period. With that, operator, our first question, please.

Our first question comes from Cory Carpenter with JPMorgan.

Anthony, hoping you could expand on the trends you saw this quarter in the platform business and how you're thinking about the growth drivers in 4Q in 2026? And Dan, maybe a question for you. You bought back 50 million shares this quarter. So I thought it would be helpful to hear your latest thoughts on capital allocation priorities given your cash balance.

We have a very positive outlook and feel confident about our performance this year and next. The growth in our platform revenue is driven by several key monetization initiatives that we have outlined for 2024. Our strategy is effective, as evidenced by our results, and we expect to maintain double-digit platform revenue growth along with increased profitability through 2026 and beyond. To recap, there are three main areas we're focusing on for growing our platform revenue. First is optimizing our home screen, which is critical for us. Every Roku user, which represents about half of broadband households in the U.S., begins their viewing on the home screen, making it essential for content discovery and viewing decisions. We continually refine this area and test various improvements. For instance, we've recently added a recommendation row, which is performing well. We are also testing a more significant update to the home screen, which has received positive feedback during testing and is planned for rollout in 2026. The second area is expanding our advertising business and demand. Our strategy involves collaboration with major platforms, including all major DSPs. We have recently established a deeper partnership with Amazon's DSP, which is still in its early phases but shows promise. We're also enhancing measurement capabilities, such as our recent integration with AppsFlyer. Additionally, we're investing in Ads Manager, our self-serve platform targeting small and medium-sized businesses, with a focus on performance marketing to attract a new class of advertisers. Finally, our subscription business is performing well, particularly with premium subscriptions. In the third quarter, we made improvements to the premium subscription experience and added new services. We're planning to launch more Tier 1 subscription services in 2026. Furthermore, we have introduced Howdy, our latest service priced at $3 a month with no ads, targeting a large, underserved market. While it's still early in this venture, we believe we can replicate the success we achieved with the Roku Channel. Now, regarding capital allocation, I'll hand it over to Dan.

Thanks, Anthony, and thanks for the question, Cory. I want to start by discussing our financial position and capital allocation. We have $2.3 billion in cash and short-term investments, which puts us in a very strong position. We reported a positive operating income in Q3, the first time since fiscal 2021. Our outlook for Q4 shows adjusted EBITDA of $145 million, which is our highest ever. For the full year, we expect EBITDA margins to improve by 200 basis points year-over-year to around 8.4%, with a similar improvement anticipated next year. As I’ve mentioned, we will maintain a light capital expenditure approach and our free cash flow is growing faster than our EBITDA. This has led to over $440 million in trailing 12-month free cash flow. We are performing strongly in terms of free cash flow generation and expect to continue this trend. Additionally, we launched our net share settlement program in early 2024, mitigating about 40% of gross dilution. Last quarter, as noted, we repurchased $500 million of our stock under our $400 million share repurchase program, resulting in total dilution of 130 basis points in Q3, the lowest we’ve seen. This underscores our commitment to managing dilution, share buybacks, and enhancing free cash flow. We aim to offset 100% of share dilution over time, and I remain optimistic about achieving that goal. We will keep seeking opportunities to grow our business and increase shareholder value through disciplined capital allocation, investing in platform revenue initiatives as discussed by Anthony, primarily through reallocating capital. We will focus on maximizing our return on investment as we continue to generate positive free cash flow.

Our next question comes from Brent Navon with Bank of America.

In your shareholder letter, you mentioned progress from third-party DSPs and Roku Ad Manager in advertising. Can you clarify the size of these businesses and their growth rates? Also, regarding the opportunities in 2026, it appears you are achieving 20% organic growth excluding political factors and ASC 606 in the third quarter, with a similar outlook for the fourth quarter. You mentioned several potential growth areas, but are there any challenges or tough comparisons we should consider? It seems you have strong momentum in Ad Manager, the Amazon DSP is ramping up, there's a political year ahead, and potential improvements in M&E. I just want to ensure we're considering all aspects correctly.

Brent, I think Charlie will answer that question.

Sure. I'll address the DSP and Ad Manager sections of your question before handing it over to Dan. Our strategy is to remain open and interoperable while being fully integrated with all DSPs, allowing us to engage with clients wherever they choose to transact. It makes perfect sense for us to enhance our integrations across the board, which includes our recently announced integration with Amazon. Over the past few years, we've added numerous ad tech partners, ranging from Yahoo! DSP to AppLovin and Magnite on the SSP side. Last year, we focused on strengthening our relationships with each of these partners. Regarding third-party DSPs, last year we discussed our UID integration with Trade Desk, and our expanding relationship with Amazon parallels that discussion. Our aim with these partnerships is to increase efficiency and performance, and we are optimistic about our role as an open and interoperable partner in a landscape filled with walled gardens. As for Ads Manager, we appreciate the trend towards proof of performance and performance marketing, particularly in CTV. Although it's still early, we are encouraged by what we observe. There's a growing market emphasis on automation and advanced proof of performance with Ads Manager, our self-service platform. The innovations we're introducing position Roku as a premier performance CTV platform, providing us with favorable conditions. We are seeing new advertisers joining and remaining with us due to the success of their Roku campaigns. In the third quarter, around 90% of advertisers using Ads Manager were new to Roku, which is a positive trend. Dan, would you like to cover the rest?

Thank you, Charlie, and thank you for the question, Brent. To address your question about 2026, let’s first focus on Q3 and Q4. In Q3, we achieved a strong growth rate of just over 17%. Our guidance is set at a 15% growth rate, factoring in political and promotional influences. Excluding these factors, Q3 shows a 19% year-over-year growth. For Q4, the growth also rises slightly above 19%. We’re confident in how we will complete this year, finishing very strong. Regarding 2026, we will share more guidance after the next quarter. As mentioned by Anthony and Charlie, we have numerous initiatives ongoing, some launched and some yet to be. We are particularly excited about the new home screen and overall user interface improvements. Our Ads Manager and new advertising products are performing well, and our premium subscriptions are also thriving. Overall, I feel very optimistic about entering 2026 and am excited about the upcoming year.

Our next question comes from Justin Patterson with KeyBanc.

Could you explain a bit more about what the new home screen means for the business? How do you envision it affecting engagement and monetization compared to the current home screen? Additionally, regarding the deeper DSP integrations, there have been many investor inquiries about what follows this integration. I would like to know about any upcoming ad product innovations and how you believe they will contribute to sustaining platform revenue growth.

Justin, this is Anthony. Regarding the new home screen, I would say we have an iconic design that is distinct and feels simpler to use compared to our competitors, which we take pride in. It's designed to be enjoyable, and we aim to maintain and enhance that aspect. Our goal is to keep it unique, more delightful, and also increase its usefulness. Customers appreciate our current home screen because it's functional, but we see room for improvement. We want to boost customer satisfaction while also driving monetization. We are testing various features that have shown to enhance engagement and increase monetization, whether by encouraging viewers to subscribe to more services or to engage with more ad-supported content. These are our two main business objectives: improving viewer satisfaction and increasing engagement and monetization. Our tests indicate that we're making progress in both areas, and we plan to implement these changes by 2026. Regarding DSP integrations, we are actively partnering with all major DSPs, but there is still significant potential to deepen these relationships to benefit our business. In terms of ad products, we have a range of new offerings in development. We are intensely focusing on performance, especially with integrating next-generation generative AI into our ad systems to enhance effectiveness. Our goal is to be the top-performing Connected TV platform. Additionally, while our traditional ad business with brand advertisers and agencies remains important, we are also targeting small- and medium-sized businesses that are typically more digital-first. We are creating products to meet the needs of those markets as well. Charlie, do you have anything to add?

You nailed it, Justin. This is Charlie. You asked what comes next, but what comes before it is equally important. Anthony mentioned that we're in half of the broadband households in the country. Authentication leads everything; literally all else follows. Roku has high fidelity signals, which allows us to drive results for marketers in authenticated premium content. That's where it all begins. Everything Anthony discussed is spot on. We'll continue to refine our integrations with each of these partners. The best part is that we will drive outcomes for our marketers and be able to continuously refine our approach to meet their needs. Dan, I'm not sure?

No, I don't have anything except to say that the question was around sustainable revenue on ad product. And I think Charlie and Anthony answered that. We also have a subscription business, which is driving a lot of revenue growth and is, in fact, growing faster. Premium subscriptions are doing exceptionally well. We had a Tier 1 launch last quarter, we'll have more Tier 1 launches in the coming months that we feel very good about. So we have a whole other business in subscriptions that is also growing exceptionally fast and we fully expect that to continue. In addition to the ad revenue that Charlie and Anthony just discussed.

Our next question comes from Laura Martin with Needham.

My question is for Anthony regarding data. I recognize that you are developing new revenue streams utilizing Roku's top-tier data. Do you have any updates on the idea of licensing your superior data to large language models, considering Meta is investing $72 billion this year and Gemini $85 billion, and these models are running low on data? It seems you have a valuable revenue opportunity that isn't being tapped into. Additionally, for Charlie or Dan, there’s a lot happening with auction density and subscription revenue, but you didn't mention shoppable. How do you prioritize these new or ancillary revenue streams over the next one to two years? Would it be increasing the sellout rate first, followed by subscriptions, and then shopping?

Thank you for the question, Laura. It's great to hear from you. Yes, our first-party data is a highly valuable asset that we utilize in multiple ways. It drives our targeted advertising, supports our AI for performance marketing, and helps us personalize the home screen and make user recommendations. Primarily, we leverage this data to increase ad sales, boost subscriptions, and enhance viewer experiences. We are always exploring better ways to monetize our data. While working with large language models is something we've considered, it's not currently in place, but we are investigating it. Additionally, we are looking at other opportunities to monetize our data. Charlie or Dan, would you like to add anything?

Laura, it's Charlie. In terms of the order, I think they're all important. I'll address your shoppable question. We're bullish on Shoppable, and it's one of those opportunities that I think is early but working from some original programming where we've integrated product and made the products in the show Shoppable to the far larger opportunity, which is to teach America how to shop on TV. I think Roku will be the best place to do that simply because of our scale. But in terms of behavior, I think it is slightly early days. We do see, obviously, great performance metrics across our platform and certainly with some of our ads, including our Shoppable ads, but it wasn't mentioned because it's early days not because we don't have great interest in pursuing it. And we have lots of partners, who are working with us on that.

Our next question comes from Michael Nathanson with MoffettNathanson.

I have 2, Charlie, Dan. Charlie, as more and more sports content moves to streaming, it feels like you guys have a major opportunity here with sports experiences. Can you talk a bit about what you're seeing to date? Is it driving revenue growth? And then longer term, do you envision at a time, when I can actually watch all my sports in 1 experience zone, right? So instead of going to different apps, can I just have 1 centralized aggregation place to watch my sports, that's for you. And then for Dan, I just want to confirm, you said distribution revenues are growing faster than advertising and you had 1 new launch. But I think we had both Fox and ESPN launched in the quarter. So is there a timing issue because those are the 2 major launches? Just want to confirm that.

Michael, it's Charlie. It's great to connect with you. The fact that every NFL game is now available for streaming is a significant advantage for Roku, which represents half of the broadband households in the country. We see substantial opportunities with sports for several reasons. Firstly, we often discuss being a leading platform for television. During the last Olympics, we took pride in being the main gateway for all the experiences viewers wanted, and we successfully partnered with NBC to facilitate that. We plan to do the same for the upcoming World Cup and other events. Anthony mentioned the simplicity of our home screen, and our ability to guide viewers to what they want to watch, particularly their favorite sports experiences through platforms like our sports zone, indicates we're just beginning to tap into that potential. As a sports fan, I can see how Major League Baseball fans navigate from one site to another throughout the week. Our sports experiences simplify that process. Ultimately, we envision a time when fans can watch everything in one location, which I believe every sports enthusiast would appreciate. While we know the challenges regarding rights fees and paywalls, I firmly believe that Roku will provide the best experience for watching sports, and we are continuously improving how we assist sports fans in navigating this complex landscape. Dan, would you like to address the latter part?

Yes, thanks, Charlie. The short answer to your question is no, it's not a timing issue with revenue related to FOX and ESPN. Even if you exclude any partner launch and media & entertainment, we are still experiencing remarkable growth, outpacing the market. It's not a timing issue.

Faster than advertising.

Yes.

This is Anthony. I'll just add. Look, on the sports thing, I mean, Charlie answered that, but just to be super clear, it's a big opportunity for us, the fact that sports is and will continue to be fragmented across a lot of apps is a big opportunity for us with products like our sports zone to create a simplified experience that allows viewers to find the sports they want to watch. So it's an area that we're focused on. It's also an opportunity for marketing and promotions and advertising and sponsorships as well.

Our next question comes from Vasily Karasyov with Cannonball Research.

Dan, I have a question for you. Now that we've seen several consecutive quarters of steady growth in platform revenue, and you, Anthony, and Charlie have highlighted the growth drivers for the upcoming years, could you help us consider ARPU growth? Given the expansion of your user base and the growth in platform revenue, would ARPU potentially increase at double the rate of platform revenue growth in the midterm? If you could clarify that trajectory, it would be very helpful.

Thanks for the question, Vasily. It's a good question. Several years ago, we saw our ARPU remaining relatively flat, and we discussed that a lot. I can say that in both the U.S. and globally, our platform revenue continues to rise. We have mentioned an overall platform revenue growth of 17%. The guidance is at 15%, and we're also seeing an increase in our streaming households. We've expanded internationally and continue to see growth in the U.S. as well. Overall, ARPU is also increasing, and I expect that trend to persist. In a previous call, I shared my belief that our ARPU could significantly increase due to our monetization initiatives. While we will continue to grow streaming households, I firmly believe we'll reach 100 million streaming households by 2026, and our ARPU will grow at a faster rate because our platform revenue initiatives are set to accelerate. So, it's a positive outlook for both U.S. and international ARPU.

I'm sorry, you said faster, faster than the active accounts growth or then the platform revenue growth?

It's going to depend on the country. I can say that in the U.S., we are experiencing growth in both key areas of that equation. Due to the increase in platform revenue and our ongoing efforts, we expect to maintain double-digit growth, with a strong 17% growth in Q3. I believe our average revenue per user will increase, and more importantly, I think it can rise significantly from its current level per account or per streaming household. We will continue to increase the number of streaming households, and our average revenue per user will also grow quickly.

Our next question comes from James Heaney with Jefferies.

I know, it's been under pressure for a while now, but is there anything you can say about the M&E vertical this quarter and in Q4? And separately, how do you think about the consolidation in the media industry and how that potentially can influence your position as a distribution partner for streamers? And then I had a follow-up.

James, this is Anthony. I'll address the second question about consolidation first and then pass it to Charlie to talk about M&E. As we've stated numerous times, over half of broadband households in the U.S. use a Roku to watch television. This means that more than half of all TV streaming occurs on our platform, making us a vital partner for every content owner and streaming service. Regardless of any consolidation in the industry, this will not change. We will continue to be an essential partner. The streaming sector is strong and continues to grow, which presents many opportunities for us to expand our business. Now, Charlie will take over on M&E.

Absolutely, I would agree. It's clear that the media and entertainment industry is still navigating its path, particularly regarding profitability. There are ongoing challenges in connected TV, yet our advertising segment is performing exceptionally well despite these obstacles. We've benefited from new launches this quarter, although the industry is under pressure. However, within our media and entertainment sector, there is a significant amount of positive news. The theatrical segment is starting to show strong performance, and we are witnessing advertisers investing in our unique offerings like custom home screen takeovers and the popular video in our marquee unit. We've also concentrated on diversifying and expanding our platform business, making us less dependent on any single vertical than ever before, including media and entertainment. Given our extensive reach—being present in half of U.S. broadband households—we are the premier destination for media and entertainment advertising, facilitating subscriber attraction, engagement, retention, and ROI measurement. While we aren’t solely counting on media and entertainment to drive growth, any improvement in the industry will be a benefit for us. If the segment rebounds strongly, it will positively impact our business as we excel in building the media and entertainment sector, making us the top choice for advertisers in that space.

Great. And then maybe just a quick follow-up on just overall macro environment in the quarter and so far in Q4, like anything stand out that's been particularly strong or weak anything on the call out there, maybe for Dan.

I think Charlie should start by discussing the macro environment regarding ads, and then I can add a few remarks afterward. Charlie, would you like to take that question?

Sure. Thanks, Dan. James, I'm encouraged by the current trends. Roku has some distinctive features that enable us to leverage today's advertising dynamics. It's crucial to note that Roku serves as a gateway to all television, which provides us with significant advantages in this market. Additionally, we've been diversifying demand across our platform and streaming service, establishing strong programmatic capabilities and various third-party partnerships that allow us to connect with our clients wherever they choose to transact. Roku has benefited from its position as both a platform and a publisher. When I mention publisher, I refer to owning and operating the Roku Channel, which is among the top five streaming services according to the Nielsen Gauge, and we rank number two in terms of engagement in the U.S. The value of our home screen engagement has enhanced our ad product development, among other factors. For instance, our marquee ad unit, which has gained popularity as a video unit, demonstrates this. Regarding the positive impact of diversifying demand and programmatic capabilities, we’re seeing encouraging results as we approach the fourth quarter and beyond. Our platform revenue grew 17% year-on-year, largely driven by strong video advertising performance, indicating that we are outpacing growth in the U.S. OTT and digital ad markets. Excluding political revenue and other specific factors, our platform revenue increased by 19% year-on-year in the third quarter. So, to answer your question, James, the trends are favorable, and Roku is well-positioned as both a platform and a leading streaming service to capitalize on these market opportunities. Dan, did you want to...

The only thing I would add, I think on upfront pricing, Charlie. Like I think I'll just say that the 1 trend going into Q4 is we're pretty happy with our upfront in terms of pricing. Maybe you want to touch base on that as a trend because I think that is a change.

Yes. You're correct that with October comes the new upfront schedule, and we not only have a strong upfront but also saw stable pricing. If you’d like more details on pricing, it’s quite fascinating how it impacts different services in various ways. I would like to emphasize, Dan, that we have multiple strategies available to us, which aligns with what I mentioned earlier. Regarding pricing, we do not face a supply issue, allowing us to adjust prices along the demand curve to our benefit. We are performing well in both volume, and our pricing strategy is quite unique in this market.

Yes, exactly. So pricing is positive for us in Q4, at least as part of our upfront, which is different than the last upfront. So that's a good positive trend for us. In terms of other trends, like our guidance that we provided, which was roughly 15% per platform, and again, backing out political and friendly, it's above the Q3 growth rate of 19%. It actually implies 20% growth on an ex-political ex-friendly basis. Just would imply that a lot of the trends that we're seeing in Q3, we expect to continue. And again, it is advertising, for sure, on everything Charlie just said, but it's also our subscriptions business, which is performing incredibly strong, including our premium subscription business, which is growing very well.

Our next question comes from Ross Walthall with Cleveland Research Company.

I just wanted to ask a little more detail on the Amazon DSP partnership. I know it's early days, but can you talk to you what the rollout looks like from here? Any customer feedback and whether this could be a material driver going into either Q4 of '26?

Ross, this is Anthony. I'll begin. I'm not sure if Charlie has anything to add, but as you mentioned, it's still early with Amazon. It's live now, but it has only recently launched. There is significant interest from customers, many of whom are eager to use the Amazon DSP. We are an important partner for them in this endeavor. While there are customers looking to use Trade Desk, there is also a growing interest in Amazon. Therefore, I would say there is robust customer interest. The initial signs we are observing are positive, but it's still too early to make definitive statements. Charlie, do you have anything else to add?

I think you mentioned Trade Desk. We saw the Trade Desk integration last year, and it takes some time to roll out. However, I like what we're seeing so far. Clients are asking us the right questions about how to use it. There's a general trend towards outcome-based buying and measurement of performance, and our strategy to be everywhere, including a strong presence on Amazon, positions us well. I believe it will ramp up nicely into 2026.

And then I don't know, Dan, do you want to same thing on Q4 '26?

No. I guess I would just say that I'm going to reiterate both Anthony and Charlie's point is we just turned it on the first of this month here. We're in very, very early days. We like what we see. It is contemplated in our Q4 guide. And we're going to have a lot more visibility as we exit the year and go into 2026, and we'll update you at that point in time.

That's great. One other question on the self-serve business. Do you think you have the right tech and partnerships in place to really scale this, like are all the pieces in place? Or are there like additional capabilities or partnerships that you need to add? And just ultimately, like where can this business go long term?

So this is Anthony. I'll start and see if Charlie has anything to add. The short answer is yes, we have everything we need. We have the necessary partnerships, but it's still early in this business's evolution. We're continuing to invest in research and development and building more partnerships. We have our own self-serve platform called Ad Manager, but there are other businesses doing similar things, and we are collaborating with those companies as well. We're not limited to just using our own platform for this market. It is a significant market, worth billions, nearly as large as the traditional brand advertising business. We're also focused on integrating generative AI into our platform to enhance targeting and performance-based marketing. I believe we are well-prepared, but there is still much evolution and growth ahead. Charlie, would you like to add anything?

Yes. That's right. We have everything we need, and we're going deeper. I mean, it's so funny. We talk about deepening these integrations. We continue to do the same with our own products and look for ways to refine and improve more and more performance. One thing that's unique about our product, obviously, is that these small and medium-sized businesses will now have access to authenticated premium content. And so, when they see that they're able to, we said in the early days, democratize television and access our platform, I think we have a really compelling and differentiated offering. And of course, because we have the scale that we do we're going to perform really well. And what's great about these platforms, which is different than our traditional business is that when we improve ROI, people will leave it on as long as there's a positive return. So I like these advertisers. I like how many new advertisers are coming to the platform, and I think there's a lot of opportunity ahead that we're poised for.

Yes, I will add that this is a large business that has driven the growth of social media platforms in their advertising efforts. What's unlocked for platforms like Roku is generative AI, which enables a business to create a high-quality, professional-looking video ad almost effortlessly with just one click. This advancement makes video platforms like Roku as accessible as social media platforms for performance marketing.

Our next question comes from Robert Coolbrith with Evercore ISI.

2 questions, please. First, on performance, I wanted to ask maybe about some of the advantages that you may have to sort of deliver on that, the platform player, your ability to provide feedback loops or certain types of consumer interactions with ads on your platform. And then also I wanted to ask sort of related to that as well, your ability or your interest level in perhaps launching new pricing models like cost per action or something along those lines? And then second, I just wanted to quickly touch on the streaming hours. It looks like you had a bit of a deceleration there. I wanted to just ask, if there were any comp factors or anything else to be aware of on that?

Okay. So regarding performance, I'll start and perhaps Dan will add his thoughts. The strengths of our platform encompass a massive scale, extensive first-party data, and a highly advanced technology framework that incorporates significant AI capabilities. These elements form the foundation of our performance, which includes a user experience rich in opportunities for promoting ads, including video ads. Our unique position lies in our scale and the richness of our data, along with what I believe is a world-class TV engineering team—arguably the best in the industry. We are assembling all these components effectively. As for our interest in new pricing models, Charlie, would you like to address that?

Well, the answer is you were asking about CPA. I think that performance is in the eye of the beholder, right? And you have some large packaged goods company, who just want to see incremental reach. And then you've got some other businesses who have a very specific KPI, and we can help them reach all of them. It's interesting. When I step back I think about the use cases we can meet and there are many. But ultimately, they all sort of fit into 1 of 3 buckets, which is planning or activation or measurement and we've got tools and we have Roku Data Cloud and all sorts of other ways to help people maximize the efficacy of their media across the largest streaming platform in America. And so the answer to your question is directionally, absolutely, we will meet people not just where they want to transact, but we'll start to prove ROI in deeper and deeper ways. And then our platform in terms of the ads manager platform will really make it easy for them to do so and continue to see a return on their investment.

I will address that. In terms of streaming hours, we experienced a slight slowdown compared to previous quarters, but there are no concerns from a monetization perspective. The numbers we are seeing are simply becoming very large. We continue to grow our streaming hours significantly, maintaining a strong double-digit increase. It's also important to highlight that both streaming hours and monetizable hours, which I monitor across the platform, are performing very well. We are gaining traction, not necessarily in terms of percentage growth, but our TRC remains the second most popular app on our platform by streaming hours and is gaining ground on other apps. There is nothing alarming about the streaming hours; these figures are huge, with hundreds of billions of hours being streamed. The deceleration from quarter to quarter is not a cause for concern, and I would reiterate that monetizable hours, particularly with the growth of our premium subscriptions and TRC, are performing robustly.

Yes. As the head of ad monetization, it is a nonissue. I think we have what we need to come to market, and we're maximizing that inventory opportunity.

Our next question comes from Alan Gould with Loop Capital.

I've got 2, please. First, on the Amazon, just 1 quick follow-up. What are the key features and functionality that Amazon provides at the other DSPs in addition to diversification is the key issue there, the frequency capping. And then for Dan, when I look at 3Q and 4Q platform, growth and you back out friendly and political. If you were to also back out ASC 606, would the numbers be north of 20% and would 4Q still be growing quicker than 3Q?

Thank you, Alan, for the question. The easiest way to explain it is that we're enhancing audience targeting, frequency management, and closed-loop measurement. As I mentioned, we typically don't advise clients on which DSP to choose. We are present wherever they need us, and we take pride in our Amazon partnership. At the core, that's what we're focusing on with the DSP integration.

To your question, I'll address the second part. You're correct that it would be just above 20%. In fact, without considering ASC 606, it would be closer to 21%. You would still observe a slight increase on the ASC 606 basis. To clarify, we have not recognized any ASC 606 for 2025, nor do I anticipate doing so.

That concludes today's question-and-answer session. I'd like to turn the call back to Anthony Wood for closing remarks.

All right. Well, I want to say thank you to our employees, customers, advertisers and content partners, and thank you for listening.

This concludes today's conference call. Thank you for participating. You may now disconnect.