Roku is ushering in its "Roku 2.0" phase—a strategic evolution focused less on user growth

What's happening?

Roku is ushering in its "Roku 2.0" phase—a strategic evolution focused less on user growth and more on monetization and increased engagement. With over 90 million active accounts and a staggering 125 billion streaming hours recorded in 2024, the company is capitalizing on its large user base to build more solid and sustainable financial growth.

What does this shift mean?

The new strategy no longer relies solely on acquiring new users, but instead aims to increase revenue through deeper platform usage. Roku is leveraging the global rise in streaming and connected TV advertising, improving ad fill rates through targeted third-party partnerships. As challenges in the media sector gradually ease, Roku is well positioned to seize new opportunities.

Why should I care?

For markets: Roku is turning up the volume on financials.

UBS Bank has renewed its confidence in Roku, forecasting a 12% compound annual growth rate (CAGR) in revenue, an impressive 37% annual EBITDA growth, and a 50% increase in free cash flow over the next three years. Supporting this optimistic outlook, UBS reiterated a "buy" rating and set a $100 price target per share, despite the stock recently falling to $77.63.

As Roku shifts from a phase of pure expansion to a more mature, strategic phase, it's aiming to redefine its role in the streaming ecosystem. The combination of growing demand and a strong position in the TV advertising market places Roku as a key player in the industry's evolution. This strategic shift highlights not only the company’s dynamic potential but also the beginning of a profound financial transformation.