Roku, Inc 10-K for FY2021

Roku, Inc (ROKU)

10-K 2022-02-18 For: 2021-12-31

Added on April 10, 2026

About this 10-K

Roku, Inc filed this 10-K on February 18, 2022, covering the fiscal year ended December 31, 2021 (FY2021).

Headline figures

Fiscal year ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.76B; up 55.5% from $1.78B a year earlier
Net income: $242.39M; compared with a net loss of $17.51M a year earlier
Diluted EPS: $1.71; compared with -$0.14 a year earlier

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Delaware	4841	26-2087865
(State or other jurisdiction of incorporation or organization)	(Primary standard industrial code number)	(I.R.S. employer identification no.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value	ROKU	The Nasdaq Global Select Market


Large Accelerated Filer	☑	Accelerated Filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging Growth Company	☐


		Page
	PART I
Item 1	Business	5
Item 1A	Risk Factors	12
Item 1B	Unresolved Staff Comments	46
Item 2	Properties	46
Item 3	Legal Proceedings	46
Item 4	Mine Safety Disclosures	46
	PART II
Item 5	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	47
Item 6	Reserved	49
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	49
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	60
Item 8	Financial Statements and Supplementary Data	62
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	97
Item 9A	Controls and Procedures	97
Item 9B	Other Information	99
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	99
	PART III
Item 10	Directors, Executive Officers and Corporate Governance	100
Item 11	Executive Compensation	100
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	100
Item 13	Certain Relationships and Related Transactions, and Director Independence	100
Item 14	Principal Accounting Fees and Services	100
	PART IV
Item 15	Exhibits, Financial Statement Schedules	101
Item 16	Form 10-K Summary	103
	Signatures	104


Company / Index	Dec-17	Dec-18	Dec-19	Dec-20	Dec-21
Roku, Inc.	$370	$219	$956	$2,371	$1,630
Nasdaq Composite Index	$107	$104	$142	$206	$252
Peer Group	$107	$98	$134	$193	$270


☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Plan Category	Number of securities to be issued upon exercise of outstanding options and awards	Weighted-average exercise price of outstanding options (1)		Number of securities remaining available for future issuances under equity compensation plans (excluding securities in column (a))
	(a)	(b)		(c)
	(in thousands, except per share amount)
Equity compensation plans approved by security holders (2)	9,460	$	51.87	32,100
Equity compensation plans not approved by security holders	—	—		—
Total	9,460	$	51.87	32,100


Quarter	Published SHs	Revised SHs	SHs % Delta	Published YoY	Revised YoY
2017 Q1	3.3B	3.2B	(0.5)%	63.4%	NA
2017 Q2	3.5B	3.5B	(0.4)%	60.0%	NA
2017 Q3	3.8B	3.8B	(0.4)%	57.8%	NA
2017 Q4	4.3B	4.3B	(0.2)%	55.3%	NA
2018 Q1	5.1B	5.1B	(0.5)%	56.0%	56.1%
2018 Q2	5.5B	5.4B	(0.5)%	57.2%	57.0%
2018 Q3	6.2B	6.1B	(0.7)%	62.7%	62.1%
2018 Q4	7.3B	7.1B	(2.2)%	68.6%	65.2%
2019 Q1	8.9B	8.4B	(5.4)%	74.1%	65.5%
2019 Q2	9.4B	8.8B	(6.0)%	72.1%	62.6%
2019 Q3	10.3B	9.6B	(6.5)%	67.6%	57.9%
2019 Q4	11.7B	10.9B	(6.3)%	60.2%	53.7%
2020 Q1	13.2B	12.3B	(7.0)%	49.3%	46.8%

Year	Published SHs	Revised SHs	SHs % Delta	Published YoY	Revised YoY
2017	14.8B	14.8B	(0.4)%	58.8%	NA
2018	24.0B	23.7B	(1.1)%	61.7%	60.5%
2019	40.3B	37.8B	(6.1)%	67.8%	59.3%


	Years Ended December 31,
	2021		2020		2019
Net Revenue:
Platform	83	%	71	%	66	%
Player	17	%	29	%	34	%
Total net revenue	100	%	100	%	100	%
Cost of Revenue:
Platform	30	%	28	%	23	%
Player	19	%	27	%	33	%
Total cost of revenue	49	%	55	%	56	%
Gross Profit (Loss):
Platform	53	%	43	%	43	%
Player	(2)	%	2	%	1	%
Total gross profit	51	%	45	%	44	%
Operating Expenses:
Research and development	17	%	20	%	24	%
Sales and marketing	16	%	17	%	16	%
General and administrative	9	%	10	%	10	%
Total operating expenses	42	%	47	%	50	%
Income (Loss) from Operations	9	%	(2)	%	(6)	%
Other Income (Expense), Net:
Interest expense	—	%	—	%	—	%
Other income (expense), net	—	%	—	%	1	%
Total other income (expense), net	—	%	—	%	1	%
Income (Loss) Before Income Taxes	9	%	(2)	%	(5)	%
Income tax benefit	—	%	—	%	—	%
Net Income (Loss)	9	%	(2)	%	(5)	%


			Page
Report of Independent Registered Public Accounting Firm (PCAOB ID 34)			63
Consolidated Balance Sheets			65
Consolidated Statements of Operations			66
Consolidated Statements of Comprehensive Income (Loss)			67
Consolidated Statements of Stockholders’ Equity			68
Consolidated Statements of Cash Flows			69
Notes to Consolidated Financial Statements			71


	As of December 31,
	2021		2020
Assets
Current Assets:
Cash and cash equivalents	$	2,146,043	$	1,092,815
Accounts receivable, net of allowances of $56,827 and $41,236 as of	752,393		523,852
December 31, 2021 and 2020, respectively
Inventories	50,276		53,895
Prepaid expenses and other current assets	105,795		27,078
Total current assets	3,054,507		1,697,640
Property and equipment, net	177,567		155,197
Operating lease right-of-use assets	345,660		266,197
Intangible assets, net	84,126		62,181
Goodwill	161,519		73,058
Other non-current assets	258,766		16,269
Total Assets	$	4,082,145	$	2,270,542
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	124,921	$	112,314
Accrued liabilities	549,055		347,668
Current portion of long-term debt	9,883		4,874
Deferred revenue, current portion	45,760		55,465
Total current liabilities	729,619		520,321
Long-term debt, non-current portion	79,985		89,868
Deferred revenue, non-current portion	28,726		21,283
Operating lease liability, non-current portion	394,724		307,936
Other long-term liabilities	82,485		3,119
Total Liabilities	1,315,539		942,527
Commitments and contingencies (Note 12)
Stockholders’ Equity:
Common stock, $0.0001 par value;	14		13
1,150,000 (Class A - 1,000,000 and Class B - 150,000) shares authorized
as of December 31, 2021 and 2020;
135,137 (Class A - 118,767 and Class B - 16,370) shares and
128,004 (Class A - 110,645 and Class B - 17,359) shares
issued and outstanding as of December 31, 2021 and 2020, respectively
Additional paid-in capital	2,856,572		1,660,379
Accumulated other comprehensive income	41		29
Accumulated deficit	(90,021)		(332,406)
Total stockholders’ equity	2,766,606		1,328,015
Total Liabilities and Stockholders’ Equity	$	4,082,145	$	2,270,542


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders' Equity
	Shares	Amount
Balance-December 31, 2018	109,770	$	11	$	498,553	$	(17)	$	(253,896)	$	244,651
Vesting of early exercised stock options	—	—		86		—		—		86
Share repurchases	(2)	—		—		—		—		—
Issuance of common stock pursuant to equity incentive plans	6,169	1		28,181		—		—		28,182
Issuance of common stock in connection with at-the-market offerings, net of issuance costs of $6,400	3,389	—		330,539		—		—		330,539
Issuance of common stock in connection with acquisition	571	—		69,684		—		—		69,684
Stock-based compensation expense	—	—		85,175		—		—		85,175
Unrealized gain on short-term investments	—	—		—		17		—		17
Foreign currency translation adjustment	—	—		—		29		—		29
Net loss	—	—		—		—		(59,937)		(59,937)
Balance-December 31, 2019	119,897	12		1,012,218		29		(313,833)		698,426
Vesting of early exercised stock options	—	—		38		—		—		38
Issuance of common stock pursuant to equity incentive plans	4,107	1		16,805		—		—		16,806
Issuance of common stock in connection with at-the-market offering, net of issuance costs of $6,800	4,000	—		497,242		—		—		497,242
Stock-based compensation expense	—	—		134,076		—		—		134,076
Adoption of ASU 2016-13	—	—		—		—		(1,066)		(1,066)
Net loss	—	—		—		—		(17,507)		(17,507)
Balance-December 31, 2020	128,004	13		1,660,379		29		(332,406)		1,328,015
Vesting of early exercised stock options	—	—		4		—		—		4
Issuance of common stock pursuant to equity incentive plans	4,496	1		18,531		—		—		18,532
Issuance of common stock in connection with at-the-market offering, net of issuance costs of $10,400	2,637	—		989,615		—		—		989,615
Stock-based compensation expense	—	—		188,043		—		—		188,043
Foreign currency translation adjustment	—	—		—		12		—		12
Net income	—	—		—		—		242,385		242,385
Balance-December 31, 2021	135,137	$	14	$	2,856,572	$	41	$	(90,021)	$	2,766,606


	Fair Values
Assets acquired
Cash and cash equivalents	$	3,057
Prepaid expenses and other current assets	85
Property and equipment, net	584
Intangible assets:
Developed technology	11,000
IPR&D technology	7,500
Goodwill	36,790
Operating lease right-of-use assets	1,235
Other non-current assets	1,905
Total assets acquired	62,156
Liabilities assumed
Accounts payable and accrued liabilities	(1,168)
Operating lease liabilities, non-current portion	(830)
Other long-term liabilities	(6,767)
Total liabilities assumed	(8,765)
Total purchase consideration	$	53,391


	Estimated Fair Value		Estimated Weighted-Average Useful Lives (in years)
Developed technology	$	11,000	5.9
IPR&D technology	7,500
Estimated fair value of acquired intangible assets	$	18,500	5.9


	Years Ended December 31,
	2021		2020
Consolidated Statements of Cash Flows Data:
Cash flows provided by operating activities	$	228,081	$	148,192
Cash flows used in investing activities	$	(176,819)	$	(81,324)
Cash flows provided by financing activities	$	1,003,147	$	509,048


	Years Ended December 31,
	2021		2020		2019
Supplemental disclosures of cash flow information:
Cash paid for interest	$	2,578	$	3,470	$	3,095
Cash paid for income taxes	$	1,363	$	1,014	$	759
Supplemental disclosures of non-cash investing and financing activities:
Non-cash consideration for business combination	$	21,400	$	—	$	—
Services to be received as part of a business combination	$	6,500	$	—	$	—
Issuance of common stock for business combinations	$	—	$	—	$	69,684
Unpaid portion of property and equipment purchases	$	3,073	$	1,242	$	10,762
Unpaid portion of acquisition related expenses	$	—	$	—	$	2,190
Unpaid portion of purchased intangibles	$	—	$	—	$	400
Unpaid portion of at-the-market offering costs	$	—	$	—	$	144


	Years Ended December 31,
	2021		2020		2019
Beginning balance	$	5,912	$	6,550	$	7,335
Add: Charged to revenue	16,181		14,594		15,541
Less: Utilization of sales return reserve	(16,078)		(15,232)		(16,326)
Ending balance	$	6,015	$	5,912	$	6,550


	Years Ended December 31,
	2021		2020		2019
Beginning balance	$	30,838	$	19,476	$	13,750
Add: Charged to revenue	90,530		68,315		65,676
Less: Utilization of sales incentive reserve	(72,957)		(56,953)		(59,950)
Ending balance	$	48,411	$	30,838	$	19,476


	Estimated Fair Value		Estimated Weighted-Average Useful Lives (in years)
Tradename	$	20,000	10.0
Customer relationships	700		4.0
Estimated fair value of acquired intangible assets	$	20,700	9.8


	Carrying Value
Balance as of December 31, 2019	$	74,116
Adjustments:
Dataxu working capital adjustment	(1,058)
Balance as of December 31, 2020	$	73,058
Additions:
This Old House acquisition	46,671
Nielsen AVA business acquisition	36,790
Other immaterial acquisition	5,000
Balance as of December 31, 2021	$	161,519


	As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted-Average Useful Lives (in years)
Developed technology	$	73,367	$	(25,350)	$	48,017	5.9
Customer relationships	14,100		(7,395)		6,705		4.0
Tradename	20,400		(1,966)		18,434		9.8
Patents	4,076		(606)		3,470		14.0
Intangible assets subject to amortization	$	111,943	$	(35,317)	$	76,626	6.7
IPR&D technology	7,500		—		7,500
Total Intangible assets	$	119,443	$	(35,317)	$	84,126


	As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted-Average Useful Lives (in years)
Developed technology	$	62,367	$	(13,439)	$	48,928	5.9
Customer relationships	13,400		(3,908)		9,492		4.0
Tradename	400		(400)		—		0.5
Patents	4,076		(315)		3,761		14.0
Total Intangible assets	$	80,243	$	(18,062)	$	62,181	6.0


Year Ending December 31,
2022	$	17,745
2023	17,066
2024	14,275
2025	12,571
2026	4,074
Thereafter	10,895
Total	$	76,626


Year Ending December 31,	Licensed content		Produced content		Total
2022	$	86,584	$	4,055	$	90,639
2023	38,861		4,202		43,063
2024	23,293		3,951		27,244
Total	$	148,738	$	12,208	$	160,946


	As of December 31, 2021				As of December 31, 2020
	Fair Value		Level 1		Fair Value		Level 1
Assets:
Cash and cash equivalents:
Cash	$	1,130,172	$	1,130,172	$	1,021,022	$	1,021,022
Money market funds	1,015,871		1,015,871		71,793		71,793
Restricted cash, current	—		—		434		434
Restricted cash, non-current	1,627		1,627		—		—
Total assets measured and recorded at fair value	$	2,147,670	$	2,147,670	$	1,093,249	$	1,093,249


Year Ending December 31,	Operating Leases
2022	$	52,636
2023	63,548
2024	62,162
2025	61,649
2026	60,044
Thereafter	218,954
Total future lease payments	518,993
Less: imputed interest	(79,073)
Less: expected tenant improvement allowance	(8,080)
Total	$	431,840


			As of December 31, 2021
Common stock awards granted under equity incentive plans			9,460
Common stock awards available for issuance under the 2017 Employee Stock Purchase Plan *			5,089
Common stock awards available for issuance under the 2017 Equity Incentive Plan			27,011
Total reserved shares of common stock			41,560


	Number of Shares	Weighted-Average Grant Date Fair Value Per Share
Balance, December 31, 2020	4,355	$	92.91
Awarded	983	348.62
Released	(1,655)	81.95
Forfeited	(397)	135.44
Balance, December 31, 2021 - Outstanding	3,286	$	169.76


	Number of Shares	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (Years)	Weighted-Average Grant Date Fair Value Per Share		Aggregate Intrinsic Value
Balance, December 31, 2020	8,733	$	26.19	5.7	—
Granted	320	356.55		—	$	139.76
Exercised	(2,841)	6.51		—	—
Forfeited and expired	(38)	104.47		—	—
Balance, December 31, 2021 - Outstanding	6,174	$	51.87	5.8	—		$	1,129,748

Balance, December 31, 2021- Exercisable	4,548	$	14.73	4.9	—		$	973,186


Year Ending December 31,
2022	$	212,355
2023	99,848
2024	59,544
2025	36,731
2026	8,715
Thereafter	3,815
Total content liabilities	$	421,008



10.9 +	Employment Terms Agreement, by and between Roku, Inc. and Stephen Kay, dated November 15, 2013	S-1	333-220318	10.9	9/1/2017

10.10 +	Employment Terms Agreement, by and between Roku, Inc. and Steve Louden, dated June 11, 2015	S-1	333-220318	10.11	9/1/2017

10.11 +	Employment Terms Agreement, by and between Roku, Inc. and Scott Rosenberg, dated October 30, 2012	S-1	333-220318	10.13	9/1/2017

10.12 +	Employment Terms Agreement, by and between Roku, Inc. and Mustafa Ozgen, dated January 17, 2019	10-K	001-38211	10.18	3/2/2020

10.13 +	Roku, Inc. Amended and Restated Severance Benefit Plan	8-K	001-38211	99.1	7/16/2019

10.14	Coleman Highline Office Lease by and between Roku, Inc. and Cap Phase 1, LLC dated August 1, 2018 (1155 Coleman Ave)	10-Q	001-38211	10.26	8/10/2018

10.15	Coleman Highline Office Lease by and between Roku, Inc. and Cap Oz 34, LLC dated August 1, 2018 (1173/1167/1161 Coleman Ave)	10-Q	001-38211	10.27	8/10/2018

10.16	First Amendment to Coleman Highline Office Lease by and between Roku, Inc. and Cap Phase 1, LLC dated November 12, 2018 (1155 Coleman Ave)	10-K	001-38211	10.30	3/1/2019

10.17	First Amendment to Coleman Highline Office Lease by and between Roku, Inc. and Cap Oz 34, LLC dated November 18, 2018 (1173/1167/1161 Coleman Ave)	10-K	001-38211	10.31	3/1/2019

10.18	Credit Agreement, dated as of February 19, 2019, by and among Roku, Inc., Morgan Stanley Senior Funding, Inc., as lender, issuing bank, administrative agent and collateral agent, and the other issuing banks and lenders party thereto from time to time	10-K	001-38211	10.32	3/1/2019

10.19	Assignment and Assumption of Lease, Landlord’s Consent and First Amendment of Lease, dated as of April 30, 2019, by and among Roku, Inc., 8x8, Inc. and CAP Phase I, LLC	10-Q	001-38211	10.1	8/9/2019

10.20	Second Amendment to Coleman Highline Office Lease by and between Roku, Inc. and Cap Phase 1, LLC dated April 30, 2019 (1155 Coleman Ave)	10-Q	001-38211	10.2	8/9/2019

10.21	Second Amendment to Coleman Highline Office Lease by and between Roku, Inc. and Cap Oz 34, LLC dated April 30, 2019 (1173/1167/1161 Coleman Ave)	10-Q	001-38211	10.3	8/9/2019

10.22	Incremental Assumption and Amendment No. 1 to Credit Agreement, dated as of May 3, 2019, by and among Roku, Inc., Morgan Stanley Senior Funding, Inc., as administrative agent and issuing bank, and the other issuing banks and lenders party thereto from time to time	10-Q	001-38211	10.4	8/9/2019

21.1	List of Significant Subsidiaries of Roku, Inc.					X

23.1	Consent of Independent Registered Public Accounting Firm					X

24.1	Power of Attorney (included in signature page)					X

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002					X


Roku, Inc.

By:						/s/ Anthony Wood
						Anthony Wood
						President and Chief Executive Officer
						(Principal Executive Officer)


By:						/s/ Steve Louden
						Steve Louden
						Chief Financial Officer
						(Principal Financial and Accounting Officer)


Name	Title	Date

/s/ ANTHONY WOOD	President, Chief Executive Officer and Chairman	February 18, 2022
Anthony Wood	(Principal Executive Officer)

/s/ STEVE LOUDEN	Chief Financial Officer	February 18, 2022
Steve Louden	(Principal Financial and Accounting Officer)

/s/ RAVI AHUJA	Director	February 18, 2022
Ravi Ahuja

/s/ MAI FYFIELD	Director	February 18, 2022
Mai Fyfield

/s/ JEFFREY HASTINGS	Director	February 18, 2022
Jeffrey Hastings

/s/ LAURIE SIMON HODRICK	Director	February 18, 2022
Laurie Simon Hodrick

/s/ NEIL HUNT	Director	February 18, 2022
Neil Hunt

/s/ GINA LUNA	Director	February 18, 2022
Gina Luna

/s/ RAY ROTHROCK	Director	February 18, 2022
Ray Rothrock


Optionholder:
Date of Grant:
[Vesting Commencement Date:]
Number of Shares Subject to Option:
Exercise Price (Per Share):
Total Exercise Price:
Expiration Date:


Roku, Inc.			Optionholder:
By: ____________________________________			_________________________________________
Signature			Signature
Title: ___________________________________			Date: ____________________________________
Date: ___________________________________


[Type of option (check one):	Incentive	Nonstatutory ]
Stock option dated:	_______________	_______________
Number of Shares as to which option is exercised:	_______________	_______________
Certificates to be issued in name of:	_______________	_______________
Total exercise price:	$______________	$______________
Cash payment delivered herewith:	$______________	$______________
Regulation T Program (cashless exercise):2	$______________	$______________
Value of ________ Shares delivered herewith:3	$______________	$______________]


			Very truly yours,
			________________________________________
			Signature
			________________________________________
			Print Name
			Address of Record: