10-Q 1 roku-20220930.htm 10-Q roku-20220930
false0001428439December 31Q320220P1Yhttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrenthttp://fasb.org/us-gaap/2021-01-31#AccruedLiabilitiesCurrentP1Y00014284392022-01-012022-09-300001428439us-gaap:CommonClassAMember2022-09-30xbrli:shares0001428439us-gaap:CommonClassBMember2022-09-3000014284392022-09-30iso4217:USD00014284392021-12-31iso4217:USDxbrli:shares0001428439roku:PlatformSegmentMemberus-gaap:ServiceMember2022-07-012022-09-300001428439roku:PlatformSegmentMemberus-gaap:ServiceMember2021-07-012021-09-300001428439roku:PlatformSegmentMemberus-gaap:ServiceMember2022-01-012022-09-300001428439roku:PlatformSegmentMemberus-gaap:ServiceMember2021-01-012021-09-300001428439roku:PlayerSegmentMemberus-gaap:ProductMember2022-07-012022-09-300001428439roku:PlayerSegmentMemberus-gaap:ProductMember2021-07-012021-09-300001428439roku:PlayerSegmentMemberus-gaap:ProductMember2022-01-012022-09-300001428439roku:PlayerSegmentMemberus-gaap:ProductMember2021-01-012021-09-3000014284392022-07-012022-09-3000014284392021-07-012021-09-3000014284392021-01-012021-09-300001428439us-gaap:CommonStockMember2022-06-300001428439us-gaap:AdditionalPaidInCapitalMember2022-06-300001428439us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-06-300001428439us-gaap:RetainedEarningsMember2022-06-3000014284392022-06-300001428439us-gaap:CommonStockMember2022-07-012022-09-300001428439us-gaap:AdditionalPaidInCapitalMember2022-07-012022-09-300001428439us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-012022-09-300001428439us-gaap:RetainedEarningsMember2022-07-012022-09-300001428439us-gaap:CommonStockMember2022-09-300001428439us-gaap:AdditionalPaidInCapitalMember2022-09-300001428439us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-09-300001428439us-gaap:RetainedEarningsMember2022-09-300001428439us-gaap:CommonStockMember2021-12-310001428439us-gaap:AdditionalPaidInCapitalMember2021-12-310001428439us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-310001428439us-gaap:RetainedEarningsMember2021-12-310001428439us-gaap:CommonStockMember2022-01-012022-09-300001428439us-gaap:AdditionalPaidInCapitalMember2022-01-012022-09-300001428439us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-09-300001428439us-gaap:RetainedEarningsMember2022-01-012022-09-300001428439us-gaap:CommonStockMember2021-06-300001428439us-gaap:AdditionalPaidInCapitalMember2021-06-300001428439us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-300001428439us-gaap:RetainedEarningsMember2021-06-3000014284392021-06-300001428439us-gaap:CommonStockMember2021-07-012021-09-300001428439us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001428439us-gaap:RetainedEarningsMember2021-07-012021-09-300001428439us-gaap:CommonStockMember2021-09-300001428439us-gaap:AdditionalPaidInCapitalMember2021-09-300001428439us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001428439us-gaap:RetainedEarningsMember2021-09-3000014284392021-09-300001428439us-gaap:CommonStockMember2020-12-310001428439us-gaap:AdditionalPaidInCapitalMember2020-12-310001428439us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001428439us-gaap:RetainedEarningsMember2020-12-3100014284392020-12-310001428439us-gaap:AdditionalPaidInCapitalMember2021-01-012021-09-300001428439us-gaap:CommonStockMember2021-01-012021-09-300001428439us-gaap:RetainedEarningsMember2021-01-012021-09-30roku:segment0001428439roku:CustomerTwoMember2022-01-012022-09-30roku:institution0001428439roku:CustomerOneMember2022-01-012022-09-300001428439roku:FinancialInstitutionOneMemberroku:CashAndCashEquivalentsBenchmarkMemberroku:FinancialInstitutionRiskMember2022-01-012022-09-30xbrli:pure0001428439roku:CashAndCashEquivalentsBenchmarkMemberroku:FinancialInstitutionRiskMemberroku:FinancialInstitutionTwoMember2022-01-012022-09-300001428439roku:FinancialInstitutionOneMemberroku:CashAndCashEquivalentsBenchmarkMemberroku:FinancialInstitutionRiskMember2021-01-012021-12-310001428439roku:CashAndCashEquivalentsBenchmarkMemberroku:FinancialInstitutionRiskMemberroku:FinancialInstitutionTwoMember2021-01-012021-12-310001428439roku:AllowancesForSalesReturnsMember2022-06-300001428439roku:AllowancesForSalesReturnsMember2021-06-300001428439roku:AllowancesForSalesReturnsMember2021-12-310001428439roku:AllowancesForSalesReturnsMember2020-12-310001428439roku:AllowancesForSalesReturnsMember2022-07-012022-09-300001428439roku:AllowancesForSalesReturnsMember2021-07-012021-09-300001428439roku:AllowancesForSalesReturnsMember2022-01-012022-09-300001428439roku:AllowancesForSalesReturnsMember2021-01-012021-09-300001428439roku:AllowancesForSalesReturnsMember2022-09-300001428439roku:AllowancesForSalesReturnsMember2021-09-300001428439roku:AllowanceForSalesIncentivesMember2022-06-300001428439roku:AllowanceForSalesIncentivesMember2021-06-300001428439roku:AllowanceForSalesIncentivesMember2021-12-310001428439roku:AllowanceForSalesIncentivesMember2020-12-310001428439roku:AllowanceForSalesIncentivesMember2022-07-012022-09-300001428439roku:AllowanceForSalesIncentivesMember2021-07-012021-09-300001428439roku:AllowanceForSalesIncentivesMember2022-01-012022-09-300001428439roku:AllowanceForSalesIncentivesMember2021-01-012021-09-300001428439roku:AllowanceForSalesIncentivesMember2022-09-300001428439roku:AllowanceForSalesIncentivesMember2021-09-300001428439us-gaap:AllowanceForCreditLossMember2022-06-300001428439us-gaap:AllowanceForCreditLossMember2021-06-300001428439us-gaap:AllowanceForCreditLossMember2021-12-310001428439us-gaap:AllowanceForCreditLossMember2020-12-310001428439us-gaap:AllowanceForCreditLossMember2022-07-012022-09-300001428439us-gaap:AllowanceForCreditLossMember2021-07-012021-09-300001428439us-gaap:AllowanceForCreditLossMember2022-01-012022-09-300001428439us-gaap:AllowanceForCreditLossMember2021-01-012021-09-300001428439us-gaap:AllowanceForCreditLossMember2022-09-300001428439us-gaap:AllowanceForCreditLossMember2021-09-300001428439us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2022-09-300001428439us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-12-3100014284392022-10-012022-09-300001428439roku:NielsenSAdvancedVideoAdvertisingMember2021-04-152021-04-150001428439us-gaap:GeneralAndAdministrativeExpenseMemberroku:NielsenSAdvancedVideoAdvertisingMember2021-04-152021-04-150001428439roku:NielsenSAdvancedVideoAdvertisingMember2021-04-150001428439us-gaap:DevelopedTechnologyRightsMemberroku:NielsenSAdvancedVideoAdvertisingMember2021-04-150001428439us-gaap:InProcessResearchAndDevelopmentMemberroku:NielsenSAdvancedVideoAdvertisingMember2021-04-150001428439us-gaap:DevelopedTechnologyRightsMemberroku:NielsenSAdvancedVideoAdvertisingMember2021-04-152021-04-150001428439roku:ThisOldHouseHoldingsLLCMember2021-03-192021-03-190001428439us-gaap:GeneralAndAdministrativeExpenseMemberroku:ThisOldHouseHoldingsLLCMember2021-03-192021-03-190001428439roku:ThisOldHouseHoldingsLLCMember2021-03-190001428439us-gaap:TradeNamesMemberroku:ThisOldHouseHoldingsLLCMember2021-03-190001428439us-gaap:CustomerRelationshipsMemberroku:ThisOldHouseHoldingsLLCMember2021-03-190001428439us-gaap:OtherNoncurrentAssetsMember2021-03-192021-03-190001428439us-gaap:TradeNamesMemberroku:ThisOldHouseHoldingsLLCMember2021-03-192021-03-190001428439us-gaap:CustomerRelationshipsMemberroku:ThisOldHouseHoldingsLLCMember2021-03-192021-03-190001428439us-gaap:InProcessResearchAndDevelopmentMemberroku:NielsenSAdvancedVideoAdvertisingMember2021-04-152021-04-150001428439us-gaap:DevelopedTechnologyRightsMember2022-09-300001428439us-gaap:DevelopedTechnologyRightsMember2022-01-012022-09-300001428439us-gaap:CustomerRelationshipsMember2022-09-300001428439us-gaap:CustomerRelationshipsMember2022-01-012022-09-300001428439us-gaap:TradeNamesMember2022-09-300001428439us-gaap:TradeNamesMember2022-01-012022-09-300001428439us-gaap:PatentsMember2022-09-300001428439us-gaap:PatentsMember2022-01-012022-09-300001428439us-gaap:InProcessResearchAndDevelopmentMember2022-09-300001428439us-gaap:DevelopedTechnologyRightsMember2021-12-310001428439us-gaap:DevelopedTechnologyRightsMember2021-01-012021-12-310001428439us-gaap:CustomerRelationshipsMember2021-12-310001428439us-gaap:CustomerRelationshipsMember2021-01-012021-12-310001428439us-gaap:TradeNamesMember2021-12-310001428439us-gaap:TradeNamesMember2021-01-012021-12-310001428439us-gaap:PatentsMember2021-12-310001428439us-gaap:PatentsMember2021-01-012021-12-3100014284392021-01-012021-12-310001428439us-gaap:InProcessResearchAndDevelopmentMember2021-12-310001428439roku:AllowanceForOtherAccountsReceivableMember2022-09-300001428439roku:AllowanceForOtherAccountsReceivableMember2021-12-310001428439roku:ComputerAndEquipmentMember2022-09-300001428439roku:ComputerAndEquipmentMember2021-12-310001428439us-gaap:LeaseholdImprovementsMember2022-09-300001428439us-gaap:LeaseholdImprovementsMember2021-12-310001428439roku:InternalUseSoftwareMember2022-09-300001428439roku:InternalUseSoftwareMember2021-12-310001428439roku:OfficeEquipmentAndFurnitureMember2022-09-300001428439roku:OfficeEquipmentAndFurnitureMember2021-12-310001428439roku:PlatformSegmentMember2022-09-300001428439roku:PlatformSegmentMember2021-12-310001428439roku:PlayerSegmentMember2022-09-300001428439roku:PlayerSegmentMember2021-12-310001428439us-gaap:LicenseMember2022-09-300001428439us-gaap:LicenseMember2021-12-310001428439roku:ProducedContentReleasedLessAmortizationMember2022-09-300001428439roku:ProducedContentReleasedLessAmortizationMember2021-12-310001428439roku:ProducedContentCompletedNotReleasedMember2022-09-300001428439roku:ProducedContentCompletedNotReleasedMember2021-12-310001428439roku:ProducedContentInProductionMember2022-09-300001428439roku:ProducedContentInProductionMember2021-12-310001428439us-gaap:ProductMember2022-09-300001428439us-gaap:ProductMember2021-12-3100014284392022-04-012022-06-3000014284392022-01-012022-06-300001428439us-gaap:CashMember2022-09-300001428439us-gaap:FairValueInputsLevel1Memberus-gaap:CashMember2022-09-300001428439us-gaap:FairValueInputsLevel3Memberus-gaap:CashMember2022-09-300001428439us-gaap:CashMember2021-12-310001428439us-gaap:FairValueInputsLevel1Memberus-gaap:CashMember2021-12-310001428439us-gaap:FairValueInputsLevel3Memberus-gaap:CashMember2021-12-310001428439us-gaap:MoneyMarketFundsMember2022-09-300001428439us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2022-09-300001428439us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2022-09-300001428439us-gaap:MoneyMarketFundsMember2021-12-310001428439us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMember2021-12-310001428439us-gaap:FairValueInputsLevel3Memberus-gaap:MoneyMarketFundsMember2021-12-310001428439us-gaap:FairValueInputsLevel1Member2022-09-300001428439us-gaap:FairValueInputsLevel3Member2022-09-300001428439us-gaap:FairValueInputsLevel1Member2021-12-310001428439us-gaap:FairValueInputsLevel3Member2021-12-310001428439us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2022-09-300001428439us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Member2021-12-310001428439srt:MinimumMember2022-09-300001428439srt:MaximumMember2022-09-300001428439roku:TermLoanAFacilityMember2022-09-300001428439roku:TermLoanAFacilityMember2021-12-310001428439roku:TermLoanAFacilityMember2022-07-012022-09-300001428439roku:TermLoanAFacilityMember2021-07-012021-09-300001428439roku:TermLoanAFacilityMember2022-01-012022-09-300001428439roku:TermLoanAFacilityMember2021-01-012021-09-300001428439us-gaap:RevolvingCreditFacilityMemberroku:CreditAgreementMemberroku:MorganStanleySeniorFundingIncMember2019-05-032019-05-030001428439us-gaap:RevolvingCreditFacilityMemberroku:CreditAgreementMemberroku:MorganStanleySeniorFundingIncMember2019-05-030001428439roku:TermLoanAFacilityMemberroku:CreditAgreementMemberroku:MorganStanleySeniorFundingIncMember2019-05-032019-05-030001428439roku:TermLoanAFacilityMemberroku:CreditAgreementMemberroku:MorganStanleySeniorFundingIncMember2019-05-030001428439roku:TermLoanAFacilityMemberroku:CreditAgreementMemberroku:MorganStanleySeniorFundingIncMember2019-11-182019-11-180001428439roku:TermLoanAFacilityMemberroku:CreditAgreementMemberroku:MorganStanleySeniorFundingIncMemberroku:AdjustedOneMonthLIBORMember2019-11-182019-11-180001428439us-gaap:RevolvingCreditFacilityMemberroku:CreditAgreementMemberroku:MorganStanleySeniorFundingIncMember2022-09-300001428439us-gaap:RevolvingCreditFacilityMemberroku:CreditAgreementMemberroku:MorganStanleySeniorFundingIncMember2021-12-31roku:Classroku:vote0001428439us-gaap:CommonClassAMemberroku:AtTheMarketOfferingMember2021-03-022021-03-020001428439us-gaap:CommonClassAMemberroku:AtTheMarketOfferingMember2021-03-012021-03-310001428439us-gaap:CommonClassAMemberroku:AtTheMarketOfferingMember2021-09-300001428439roku:EquityIncentivePlanMember2022-09-300001428439roku:TwoThousandSeventeenEmployeeStockPurchasePlanMember2022-09-300001428439roku:TwoThousandSeventeenEquityIncentivePlanMember2022-09-30roku:Plan0001428439roku:TwoThousandSeventeenEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMember2022-09-300001428439roku:TwoThousandSeventeenEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMemberroku:TenPercentShareholderMembersrt:MinimumMember2022-01-012022-09-300001428439us-gaap:RestrictedStockUnitsRSUMember2021-12-310001428439us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-09-300001428439us-gaap:RestrictedStockUnitsRSUMember2022-09-300001428439roku:TwoThousandSeventeenEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMembersrt:MinimumMember2022-01-012022-09-300001428439roku:TwoThousandSeventeenEquityIncentivePlanMembersrt:MaximumMemberus-gaap:EmployeeStockOptionMember2022-01-012022-09-300001428439roku:TwoThousandSeventeenEquityIncentivePlanMemberus-gaap:EmployeeStockOptionMember2022-01-012022-09-300001428439us-gaap:CostOfSalesMemberroku:PlatformSegmentMember2022-07-012022-09-300001428439us-gaap:CostOfSalesMemberroku:PlatformSegmentMember2021-07-012021-09-300001428439us-gaap:CostOfSalesMemberroku:PlatformSegmentMember2022-01-012022-09-300001428439us-gaap:CostOfSalesMemberroku:PlatformSegmentMember2021-01-012021-09-300001428439us-gaap:CostOfSalesMemberroku:PlayerSegmentMember2022-07-012022-09-300001428439us-gaap:CostOfSalesMemberroku:PlayerSegmentMember2021-07-012021-09-300001428439us-gaap:CostOfSalesMemberroku:PlayerSegmentMember2022-01-012022-09-300001428439us-gaap:CostOfSalesMemberroku:PlayerSegmentMember2021-01-012021-09-300001428439us-gaap:ResearchAndDevelopmentExpenseMember2022-07-012022-09-300001428439us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001428439us-gaap:ResearchAndDevelopmentExpenseMember2022-01-012022-09-300001428439us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001428439us-gaap:SellingAndMarketingExpenseMember2022-07-012022-09-300001428439us-gaap:SellingAndMarketingExpenseMember2021-07-012021-09-300001428439us-gaap:SellingAndMarketingExpenseMember2022-01-012022-09-300001428439us-gaap:SellingAndMarketingExpenseMember2021-01-012021-09-300001428439us-gaap:GeneralAndAdministrativeExpenseMember2022-07-012022-09-300001428439us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001428439us-gaap:GeneralAndAdministrativeExpenseMember2022-01-012022-09-300001428439us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001428439roku:ManufacturingMember2022-09-300001428439roku:ContentPublishersMember2022-09-300001428439roku:ContentPublishersMemberroku:CurrentLiabilitiesMember2022-09-300001428439roku:ContentPublishersMemberus-gaap:OtherNoncurrentLiabilitiesMember2022-09-300001428439us-gaap:RestrictedStockUnitsRSUMember2022-07-012022-09-300001428439us-gaap:RestrictedStockUnitsRSUMember2021-07-012021-09-300001428439us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-09-300001428439us-gaap:EmployeeStockOptionMember2022-07-012022-09-300001428439us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001428439us-gaap:EmployeeStockOptionMember2022-01-012022-09-300001428439us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001428439roku:PlatformSegmentMemberus-gaap:CustomerConcentrationRiskMemberroku:CustomerHMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001428439roku:PlatformSegmentMemberus-gaap:CustomerConcentrationRiskMemberroku:CustomerHMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:PlayerSegmentMemberroku:CustomerAMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:PlayerSegmentMemberroku:CustomerAMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:CustomerBMemberroku:PlayerSegmentMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:CustomerBMemberroku:PlayerSegmentMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:CustomerBMemberroku:PlayerSegmentMemberus-gaap:SalesRevenueNetMember2022-01-012022-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:CustomerBMemberroku:PlayerSegmentMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:CustomerCMemberroku:PlayerSegmentMemberus-gaap:SalesRevenueNetMember2022-07-012022-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:CustomerCMemberroku:PlayerSegmentMemberus-gaap:SalesRevenueNetMember2021-07-012021-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:CustomerCMemberroku:PlayerSegmentMemberus-gaap:SalesRevenueNetMember2022-01-012022-09-300001428439us-gaap:CustomerConcentrationRiskMemberroku:CustomerCMemberroku:PlayerSegmentMemberus-gaap:SalesRevenueNetMember2021-01-012021-09-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 001-38211
ROKU, INC.
(Exact name of registrant as specified in its charter)
Delaware26-2087865
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer
Identification No.)
1155 Coleman Avenue
San Jose, California 95110
(Address of principal executive offices including zip code)
Registrant’s telephone number, including area code: (408) 556-9040
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:Trading Symbol(s):Name of Exchange on Which Registered:
Class A Common Stock, $0.0001 par valueROKUThe Nasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of September 30, 2022, the registrant had 121,844,605 shares of Class A common stock, $0.0001 par value per share, and 17,424,911 shares of Class B common stock, $0.0001 par value per share, outstanding.


Table of Contents
  Page
PART I.
Item 1.
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
i

NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q ("Quarterly Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. For example, statements in this Quarterly Report regarding the potential future impact of the COVID-19 pandemic on our business and results of operations are forward-looking statements. In some cases, forward-looking statements may be identified by words such as “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “plan,” “potentially,” “predict,” “project,” “should,” “will” or the negative of these terms or other similar expressions. We caution you that the foregoing list may not encompass all of the forward-looking statements made in this Quarterly Report.
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions, including risks described in the section titled “Risk Factors” and elsewhere in this Quarterly Report, regarding, among other things:
our financial performance, including our revenue, cost of revenue, operating expenses, and profitability;
the impact of the COVID-19 pandemic, supply chain disruptions, inflationary pressures, recessionary fears, and geopolitical conflicts on our business, operations, and the markets and communities in which we and our advertisers, content providers, Roku TV brand partners, other device licensees, manufacturers, suppliers, retailers, and users operate;
our ability to attract and retain users and increase streaming hours;
our ability to attract and retain advertisers;
our ability to attract and retain TV brands and service operators to license and deploy our technology;
our ability to produce or acquire rights to distribute popular content on our platform on favorable terms, or at all, including the renewals of our existing agreements with content publishers;
changes in consumer viewing habits and the growth of TV streaming;
the growth of our relevant markets, including the growth in advertising spend on TV streaming platforms, and our ability to successfully grow our business in those markets;
our ability to adapt to changing market conditions and technological developments;
our ability to develop and launch new products and provide ancillary services and support;
our ability to integrate acquired businesses, products, and technologies;
our ability to compete effectively with existing competitors and new market entrants;
our ability to successfully manage domestic and international expansion;
our ability to attract and retain qualified employees and key personnel;
our ability to address potential and actual security breaches and system failures involving our products, systems and operations;
our ability to maintain, protect, and enhance our intellectual property; and
our ability to comply with laws and regulations that currently apply or may become applicable to our business both in the United States and internationally, including compliance with privacy and data protection regulations in various U.S. and international jurisdictions.
Other sections of this Quarterly Report may include additional factors that could harm our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time, and it is not possible for our management to predict all risk factors nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in, or implied by, any forward-looking statements.
ii

You should not rely upon forward-looking statements as predictions of future events. We cannot assure you that the events and circumstances reflected in the forward-looking statements will be achieved or occur. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Quarterly Report or to conform these statements to actual results or to changes in our expectations. You should read this Quarterly Report and the documents that we referenced in and filed as exhibits to this Quarterly Report with the understanding that our actual future results, levels of activity, performance, and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Investors and others should note that we may announce material business and financial information to our investors using our investor relations website (roku.com/investor), SEC filings, webcasts, press releases, and conference calls. We use these mediums to communicate with investors and the general public about our company, our products and services, and other issues. It is possible that the information that we make available may be deemed to be material information. We therefore encourage investors, the media, and others interested in our company to review the information that we post on our investor relations website.
Roku, the Roku logo, and other trade names, trademarks, or service marks of Roku appearing in this report are the property of Roku. Trade names, trademarks, and service marks of other companies appearing in this report are the property of their respective holders.
iii

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements
ROKU, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value data)
(unaudited)
 As of
 September 30, 2022December 31, 2021
Assets
Current Assets:
Cash and cash equivalents$2,018,616 $2,146,043 
Accounts receivable, net of allowances of $25,633 and $56,827 as of
719,187752,393
September 30, 2022 and December 31, 2021, respectively
Inventories119,25250,276
Prepaid expenses and other current assets113,889105,795
Total current assets2,970,9443,054,507
Property and equipment, net272,193177,567
Operating lease right-of-use assets535,031345,660
Intangible assets, net70,78784,126
Goodwill161,519161,519
Other non-current assets381,730258,766
Total Assets$4,392,204 $4,082,145 
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable$175,026 $124,921 
Accrued liabilities625,836549,055
Current portion of long-term debt82,4579,883
Deferred revenue, current portion60,10145,760
Total current liabilities943,420729,619
Long-term debt, non-current portion 79,985
Deferred revenue, non-current portion26,26928,726
Operating lease liability, non-current portion568,193394,724
Other long-term liabilities76,39582,485
Total Liabilities1,614,2771,315,539
Commitments and contingencies (Note 13)
Stockholders’ Equity:
Common stock, $0.0001 par value
1414
Additional paid-in capital3,129,8182,856,572
Accumulated other comprehensive income (loss)(1,074)41
Accumulated deficit(350,831)(90,021)
Total stockholders’ equity2,777,9272,766,606
Total Liabilities and Stockholders’ Equity$4,392,204 $4,082,145 
See accompanying notes to condensed consolidated financial statements.
1

ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
 Three Months Ended Nine Months Ended
 September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Net Revenue:
Platform$670,401 $582,514 $1,990,468 $1,581,343 
Player90,972 97,439 269,010 317,912 
Total net revenue761,373 679,953 2,259,478 1,899,255 
Cost of Revenue:
Platform296,158 203,989 859,197 545,907 
Player108,428 112,045 323,538 324,392 
Total cost of revenue404,586 316,034 1,182,735 870,299 
Gross Profit (Loss):
Platform374,243 378,525 1,131,271 1,035,436 
Player(17,456)(14,606)(54,528)(6,480)
Total gross profit356,787 363,919 1,076,743 1,028,956 
Operating Expenses:
Research and development207,608 120,307 568,243 335,164 
Sales and marketing209,364 109,700 540,857 292,251 
General and administrative86,804 65,066 248,635 187,805 
Total operating expenses503,776 295,073 1,357,735 815,220 
Income (Loss) from Operations(146,989)68,846 (280,992)213,736 
Other Income (Expense), Net:
Interest expense(1,157)(743)(3,273)(2,231)
Other income (expense), net27,914 500 30,152 2,461 
Total other income (expense), net26,757 (243)26,879 230 
Income (Loss) Before Income Taxes(120,232)68,603 (254,113)213,966 
Income tax expense (benefit)1,951 (332)6,697 (4,732)
Net Income (Loss)$(122,183)$68,935 $(260,810)$218,698 
Net income (loss) per share — basic$(0.88)$0.52 $(1.90)$1.66 
Net income (loss) per share — diluted$(0.88)$0.48 $(1.90)$1.54 
Weighted-average common shares outstanding — basic138,571133,685136,997 132,036 
Weighted-average common shares outstanding — diluted138,571142,286136,997 141,593 
See accompanying notes to condensed consolidated financial statements.
2

ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(in thousands)
(unaudited)

Three Months EndedNine Months Ended
September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Net Income (Loss)$(122,183)$68,935 $(260,810)$218,698 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustment(703) (1,115) 
Comprehensive Income (Loss)$(122,886)$68,935 $(261,925)$218,698 




































See accompanying notes to condensed consolidated financial statements.
3

ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
(unaudited)
   AdditionalAccumulated Other  Total
 Common StockPaid-inComprehensiveAccumulated Stockholders’
 SharesAmountCapitalIncome (Loss)Deficit Equity
Three and Nine Months Ended September 30, 2022
     
       
Balance—June 30, 2022137,929 $14 $3,024,897 $(371)$(228,648)$2,795,892 
Issuance of common stock pursuant to equity incentive plans1,341 — 5,899 — — 5,899 
Stock-based compensation expense— — 99,022 — — 99,022 
Foreign currency translation adjustment— — — (703)— (703)
Net loss— — — — (122,183)(122,183)
Balance—September 30, 2022
139,270 $14 $3,129,818 $(1,074)$(350,831)$2,777,927 
 
Balance—December 31, 2021
135,137 $14 $2,856,572 $41 $(90,021)$2,766,606 
Issuance of common stock pursuant to equity incentive plans4,133 — 17,592 — — 17,592 
Stock-based compensation expense— — 255,654 — — 255,654 
Foreign currency translation adjustment— — — (1,115)— (1,115)
Net loss— — — — (260,810)(260,810)
Balance—September 30, 2022
139,270 $14 $3,129,818 $(1,074)$(350,831)$2,777,927 
 
 AdditionalAccumulated OtherTotal
 Common StockPaid-inComprehensiveAccumulatedStockholders’
 SharesAmountCapitalIncomeDeficitEquity
Three and Nine Months Ended September 30, 2021
 
Balance—June 30, 2021133,299 $13 $2,743,629 $29 $(182,643)$2,561,028 
Issuance of common stock pursuant to equity incentive plans857 — 3,148 — — 3,148 
Stock-based compensation expense— — 50,520 — — 50,520 
Net income— — — — 68,935 68,935 
Balance—September 30, 2021
134,156 $13 $2,797,297 $29 $(113,708)$2,683,631 
 
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 plans3,515 — 13,433 — — 13,433 
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— — 133,866 — — 133,866 
Net income— — — — 218,698 218,698 
Balance—September 30, 2021
134,156 $13 $2,797,297 $29 $(113,708)$2,683,631 

See accompanying notes to condensed consolidated financial statements.
4

ROKU, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Nine Months Ended
 September 30, 2022September 30, 2021
Cash flows from operating activities:
Net income (loss)$(260,810)$218,698 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization36,415 31,304 
Stock-based compensation expense255,654 133,479 
Amortization of right-of-use assets40,354 21,588 
Amortization of content assets163,121 56,580 
Foreign currency remeasurement (gains) losses(12,152) 
Change in fair value of strategic investment(3,556) 
Provision for (recoveries of) doubtful accounts469 (1,480)
Other items, net(258)(298)
Changes in operating assets and liabilities:
Accounts receivable32,186 (64,710)
Inventories(68,976)(22,050)
Prepaid expenses and other current assets(15,177)(63,402)
Other non-current assets(79,962)(78,549)
Accounts payable29,550 15,139 
Accrued liabilities(104,249)34,204 
Operating lease liabilities(20,516)(14,465)
Other long-term liabilities465 201 
Deferred revenue11,884 (12,731)
Net cash provided by operating activities4,442 253,508 
Cash flows from investing activities:
Purchases of property and equipment(96,318)(28,020)
Acquisition of businesses, net of cash acquired (136,778)
Purchase of strategic investment(40,000) 
Net cash used in investing activities(136,318)(164,798)
Cash flows from financing activities:
Proceeds from equity issued under at-the-market offering, net of issuance costs 989,615 
Repayments of borrowings(7,500)(3,750)
Proceeds from equity issued under incentive plans17,592 13,433 
Net cash provided by financing activities10,092 999,298 
Net increase (decrease) in cash, cash equivalents and restricted cash(121,784)1,088,008 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(5,535) 
Cash, cash equivalents and restricted cash —beginning of period2,147,670 1,093,249 
Cash, cash equivalents and restricted cash —end of period$2,020,351 $2,181,257 

5

Nine Months Ended
September 30, 2022September 30, 2021
Cash, cash equivalents and restricted cash at end of period:
Cash and cash equivalents$2,018,616 $2,179,745 
Restricted cash, non-current1,735 1,512 
Cash, cash equivalents and restricted cash —end of period$2,020,351 $2,181,257 
Supplemental disclosures of cash flow information:
Cash paid for interest$2,537 $1,932 
Cash paid for income taxes$6,644 $956 
Supplemental disclosures of non-cash investing and financing activities:
Non-cash consideration for business combination$ $15,200 
Services to be received as part of a business combination$ $6,300 
Unpaid portion of property and equipment purchases$23,410 $3,310 
Unpaid portion of acquisition-related expenses$ $43 
See accompanying notes to condensed consolidated financial statements.
6

ROKU, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. THE COMPANY
Organization and Description of Business
Roku, Inc. (the “Company” or “Roku”), was formed in October 2002 as Roku LLC under the laws of the State of Delaware. On February 1, 2008, Roku LLC was converted into Roku, Inc., a Delaware corporation. The Company operates in two reportable segments and generates platform revenue from the sale of digital advertising and related services including the OneView ad platform, content distribution services (such as subscription and transaction revenue shares, media and entertainment promotional spending, the sale of Premium Subscriptions, and the sale of branded channel buttons on remote controls), and licensing arrangements with service operators and TV brands, and player revenue from the sale of streaming players and audio products.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on February 18, 2022 (the “Annual Report”).
The condensed consolidated balance sheet as of December 31, 2021 has been derived from the audited consolidated financial statements as of that date but does not include all of the information and footnotes included in the Company’s Annual Report. The interim financial information is unaudited, but reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly present the information set forth herein. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the operating results to be expected for the full year or any future periods.
Use of Estimates
The preparation of the Company’s condensed consolidated financial statements in accordance with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, net revenue, and expenses. Significant items subject to such estimates and assumptions include:
revenue recognition: determining the nature and timing of satisfaction of performance obligations, variable consideration, determining the stand-alone selling prices of performance obligations, gross versus net revenue recognition, and evaluation of customer versus vendor relationships;
the impairment of intangible assets;
valuation of assets acquired and liabilities assumed in connection with business combinations;
valuation of strategic investments;
useful lives of tangible and intangible assets;
allowances for sales returns and sales incentives; and
the valuation of deferred income tax assets.
The Company bases its estimates on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ from the Company’s estimates and assumptions.
Principles of Consolidation
The condensed consolidated financial statements, which include the accounts of Roku, Inc. and its wholly-owned subsidiaries, have been prepared in conformity with U.S. GAAP. All intercompany accounts and transactions have been eliminated in consolidation.
7

Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Two financial institutions managed 20% and 24% of the Company’s cash and cash equivalents balance as of September 30, 2022 and 30% and 27% of the Company’s cash and cash equivalents balance as of December 31, 2021, respectively.
Accounts Receivable, net
Accounts receivable are typically unsecured and are derived from revenue earned from customers. They are stated at invoice value less estimated allowances for sales returns, sales incentives, doubtful accounts, and other miscellaneous allowances. The Company performs ongoing credit evaluations of its customers to determine allowances for potential credit losses and doubtful accounts. The Company considers historical experience, ongoing promotional activities, historical claim rates, and other factors to determine the allowances for sales returns and sales incentives.
Allowance for Sales Returns: Allowance for sales returns consists of the following activities (in thousands):
 Three Months Ended Nine Months Ended
 September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Beginning balance$4,670 $4,515 $6,015 $5,912 
Add: Charged to revenue4,187 3,082 12,997 10,133 
Less: Utilization of sales return reserve(3,294)(3,554)(13,449)(12,002)
Ending balance$5,563 $4,043 $5,563 $4,043 
Allowance for Sales Incentives: Allowance for sales incentives consists of the following activities (in thousands):
 Three Months Ended  Nine Months Ended
 September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Beginning balance$24,893 $16,640 $48,411 $30,838 
Add: Charged to revenue15,661 17,379 47,211 44,953 
Less: Utilization of sales incentive reserve(22,848)(14,184)(77,916)(55,956)
Ending balance$17,706 $19,835 $17,706 $19,835 
Allowance for Doubtful Accounts: Allowance for doubtful accounts consists of the following activities (in thousands):
 Three Months Ended  Nine Months Ended
 September 30, 2022September 30, 2021September 30, 2022September 30, 2021
Beginning balance$2,278 $3,082 $2,158 $4,181 
Provision for (recoveries of) doubtful accounts2 (381)469 (1,480)
Adjustments for write-off(97)(1,119)(444)(1,119)
Ending balance$2,183 $1,582 $2,183 $1,582 
The Company did not have any customer that accounted for more than 10% of its accounts receivable, net balance as of September 30, 2022 and December 31, 2021.
Recently Adopted Accounting Standards
On January 1, 2022, the Company early adopted the guidance issued by the Financial Accounting Standards Board (“FASB”) in October 2021. The FASB issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, to require companies to apply Accounting Standards Codification, Revenue from Contracts with Customers (Topic 606) to recognize and measure contract assets and contract liabilities from contracts with customers acquired in a business combination. The adoption did not have any impact on the Company's condensed consolidated financial statements.
8

3. REVENUE
The Company’s disaggregated revenue is represented by the two reportable segments discussed in Note 16.
The contract balances include the following (in thousands):
 As of
 September 30, 2022December 31, 2021
Accounts receivable, net$719,187 $752,393 
Contract assets (included in Prepaid expenses and other current assets)39,743 46,952 
Deferred revenue, current portion$60,101 $45,760 
Deferred revenue, non-current portion26,269 28,726 
Total deferred revenue$86,370 $74,486 
Accounts receivable are recorded at the amount invoiced, net of allowances for sales returns, sales incentives, and doubtful accounts. Payment terms can vary by customer and contract.
The timing of revenue recognition may differ from the timing of invoicing to customers. Contract assets are created when invoicing occurs subsequent to revenue recognition. Contract assets are transferred to accounts receivable when the right to invoice becomes unconditional. The Company’s contract assets are current in nature and are included in Prepaid expenses and other current assets. Contract assets decreased by $7.2 million during the nine months ended September 30, 2022 due to the timing of billing to customers as well as an overall decrease in the transaction prices in content arrangements.
Deferred revenue reflects consideration invoiced prior to the completion of performance obligations and revenue recognition. Deferred revenue increased $11.9 million during the nine months ended September 30, 2022 primarily due to the timing of fulfillment of performance obligations related to platform revenue contracts, offset by lower deferral of player revenue.
Revenue recognized during the three and nine months ended September 30, 2022, from amounts included in total deferred revenue as of December 31, 2021, was $7.9 million and $41.6 million, respectively. Revenue recognized during the three and nine months ended September 30, 2021, from amounts included in total deferred revenue as of December 31, 2020, was $9.3 million and $49.0 million, respectively.
Revenue allocated to remaining performance obligations represents estimated contracted revenue that has not yet been recognized which includes unearned revenue and amounts that will be invoiced and recognized as revenue in future periods. Estimated contracted revenue for these remaining performance obligations was $1,113.2 million as of September 30, 2022 of which the Company expects to recognize approximately 50% over the next 12 months and the remainder thereafter.
The Company reversed revenue of $8.7 million and $0.5 million during the three and nine months ended September 30, 2022, respectively, and recognized revenue of $4.5 million and $29.3 million during the three and nine months ended September 30, 2021, respectively, from performance obligations that were satisfied in previous periods due to changes in the estimated transaction price of its revenue contracts.
The Company did not have any customer that accounted for more than 10% of its total net revenue during the three and nine months ended September 30, 2022 and 2021.
4. BUSINESS COMBINATIONS
Nielsen’s Advanced Video Advertising Business
On February 28, 2021, the Company entered into an Asset and Stock Purchase Agreement to purchase the Advanced Video Advertising (“AVA”) business from Nielsen Holdings PLC (“Nielsen”). The AVA business consists primarily of video automatic content recognition and dynamic ad insertion technologies. On April 15, 2021, the Company closed the transaction, acquiring from Nielsen the AVA business, consisting of certain assets and liabilities and all of the equity interests in a subsidiary associated with the AVA business (the “Acquisition”). In conjunction with the Acquisition, the Company and Nielsen entered into a strategic commercial arrangement under which the parties will provide certain
9

advertising measurement solutions to each other. The Company acquired Nielsen’s AVA business to accelerate its launch of an end-to-end linear ad replacement solution and to further integrate Nielsen’s ad and content measurement products into the Company’s ad platform.
The total purchase consideration for Nielsen’s AVA business was $53.4 million, which consisted of (i) $38.5 million paid in cash and (ii) $21.4 million of non-cash consideration related to obligations to deliver services to Nielsen, offset by (iii) $6.5 million of services to be received from Nielsen. The obligations to deliver services to Nielsen were recorded at fair value using the incremental cash flow method. The services to be delivered to Nielsen are recognized within Other income (expense), net in the condensed consolidated statements of operations over the six year service period. The services to be received from Nielsen represent contract terms that the Company entered into for future goods and services that were recorded at fair value using the incremental cash flow method. These services are recognized as Cost of revenue, platform in the condensed consolidated statements of operations over the six year service period. The Company incurred $3.9 million in acquisition-related expenses that were recorded in General and administrative expenses in the consolidated statements of operations during the year ended December 31, 2021.
The allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed based on estimated fair values is as follows (in thousands):
Fair Values
Assets acquired
Cash and cash equivalents$3,057 
Prepaid expenses and other current assets85 
Property and equipment, net584 
Intangible assets:
Developed technology11,000 
IPR&D technology7,500 
Goodwill36,790 
Operating lease right-of-use assets1,235 
Other non-current assets1,905 
Total assets acquired62,156 
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 
The excess of the total consideration over the tangible assets, intangible assets, and liabilities assumed is recorded as goodwill. Goodwill is primarily attributable to expected synergies in advertising offerings and cross-selling opportunities. The majority of the goodwill recorded is deductible for tax purposes.
The fair value of the developed technology is estimated using the relief-from-royalty method. The key valuation assumptions include the Company’s estimates of expected future earnings and royalty rate. The Company amortizes the fair value of the developed technology on a straight-line basis over its useful life. The fair value of the in-process research and development (“IPR&D”) technology is estimated using the multi-period-excess-earnings method. The key valuation assumptions include the Company’s estimates of expected future revenue and margin. Once the project reaches technological feasibility, the Company will amortize the fair value of the IPR&D technology on a straight-line basis over its useful life.
10

The valuation of the intangible assets acquired from Nielsen’s AVA business along with their estimated useful lives, is as follows (in thousands, except years):
Estimated Fair ValueEstimated Weighted-Average Useful Lives
(in years)
Developed technology$11,000 5.9
IPR&D technology7,500 
Estimated fair value of acquired intangible assets$18,500 5.9
This Old House
On March 19, 2021, the Company acquired all outstanding shares of TOH Intermediate Holdings, LLC (“This Old House”), a home improvement media business, according to the terms and conditions of an Equity Purchase Agreement. The Company acquired the This Old House business because the Company believes the content aligns with The Roku Channel’s ad-supported growth strategy.
The total purchase consideration for This Old House was $97.8 million, paid entirely in cash. The Company incurred $2.4 million in acquisition-related expenses that were recorded in General and administrative expenses in the consolidated statements of operations during the year ended December 31, 2021.
The allocation of the purchase consideration to tangible and intangible assets acquired and liabilities assumed based on estimated fair values is as follows (in thousands):
 Fair Values
Assets acquired 
Cash and cash equivalents$7 
Accounts receivable5,830 
Prepaid expenses and other current assets7,310 
Property and equipment, net307 
Intangible assets:
Tradename20,000 
Customer relationships700 
Goodwill46,671 
Operating lease right-of-use assets5,498 
Other non-current assets23,487 
Total assets acquired109,810 
Liabilities assumed
Accounts payable and accrued liabilities(2,747)
Deferred revenue, current portion(4,146)
Operating lease liabilities, non-current portion(4,262)
Deferred revenue, non-current portion(816)
Other long-term liabilities(28)
Total liabilities assumed(11,999)
Total purchase consideration$97,811 
Other non-current assets include $22.5 million of content assets acquired. The fair value of the content assets is estimated using the income approach. Amortization expense related to the content assets is recorded on an accelerated basis according to the pattern of monetization.
The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities is recorded as goodwill. Goodwill is primarily attributable to expected synergies in the advertising offerings as the Company brings more free ad-supported content to the users. The goodwill recorded is deductible for tax purposes.
11

The fair value of the tradename is estimated using the relief-from-royalty method. The key valuation assumptions include the Company's estimates of expected future revenue and royalty rate. The Company amortizes the fair value of the tradename on a straight-line basis over its useful life.
The valuation of the intangible assets acquired from This Old House along with their estimated useful lives, is as follows (in thousands, except years):
Estimated Fair ValueEstimated Weighted-Average Useful Lives
(in years)
Tradename$20,000 10.0
Customer relationships700 4.0
Estimated fair value of acquired intangible assets$20,700 9.8
5. GOODWILL AND INTANGIBLE ASSETS
Goodwill
Goodwill represents the excess of purchase consideration in a business combination over the fair value of tangible and intangible assets acquired net of the liabilities assumed. All goodwill relates to the Company’s platform segment.
Intangible Assets
The following table is the summary of the Company’s intangible assets (in thousands, except years):
As of September 30, 2022
Gross Carrying AmountAccumulated AmortizationNet Carrying AmountWeighted-Average Useful Lives
(in years)
Developed technology$73,367 $(34,326)$39,041 5.9
Customer relationships14,100 (10,039)4,061 4.0
Tradename20,400 (3,466)16,934 9.8
Patents4,076 (825)3,251 14.0
Intangible assets subject to amortization111,943 (48,656)63,287 6.7
IPR&D technology7,500 — 7,500 
Total Intangible assets$119,443 $(48,656)$70,787 
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 relationships14,100 (7,395)6,705 4.0
Tradename20,400 (1,966)18,434 9.8
Patents4,076 (606)3,470 14.0
Intangible assets subject to amortization111,943 (35,317)76,626 6.7
IPR&D technology7,500 — 7,500 
Total Intangible assets$119,443 $(35,317)$84,126 
The Company recorded $4.4 million and $4.7 million for amortization of intangible assets during the three months ended September 30, 2022 and 2021, respectively. The Company recorded $13.3 million and $13.0 million for amortization of intangible assets during the nine months ended September 30, 2022 and 2021, respectively. During the three and nine months ended September 30, 2022 and 2021, the Company recorded amortization of developed technology in Cost of revenue, platform and Research and development expenses. The Company recorded amortization of customer relationships and tradename in Sales and marketing expenses, and recorded amortization of patents in General and administrative expenses in the condensed consolidated statements of operations.
12

As of September 30, 2022, the estimated future amortization expense for intangible assets for the next five years and thereafter is as follows (in thousands):
Year Ending December 31, 
2022 (remaining 3 months)$4,406 
202317,066 
202414,275 
202512,571 
20264,074 
Thereafter10,895 
Total$63,287 
6. BALANCE SHEET COMPONENTS
Accounts Receivable, net: Accounts receivable, net consisted of the following (in thousands):
 As of
 September 30, 2022December 31, 2021
Accounts receivable, gross$744,820 $809,220 
Less: Allowances
Allowance for sales returns5,563 6,015 
Allowance for sales incentives17,706 48,411 
Allowance for doubtful accounts2,183 2,158 
Other allowances181 243 
Total allowances25,633 56,827 
Accounts receivable, net$719,187 $752,393 
Property and Equipment, net: Property and equipment, net consisted of the following (in thousands):
 As of
 September 30, 2022December 31, 2021
Computers and equipment$43,972 $38,473 
Leasehold improvements288,168 182,229 
Internal-use software7,274 7,274 
Office equipment and furniture27,045 20,829 
Property and equipment, gross366,459 248,805 
Less: Accumulated depreciation and amortization(94,266)(71,238)
Property and equipment, net$272,193 $177,567 
Depreciation and amortization expense, for property and equipment assets, for the three months ended September 30, 2022 and 2021 was $9.0 million and $6.2 million, respectively. Depreciation and amortization expense, for property and equipment assets, for the nine months ended September 30, 2022 and 2021 was $23.0 million and $18.3 million, respectively.
13

Accrued Liabilities: Accrued liabilities consisted of the following (in thousands):
 As of
 September 30, 2022December 31, 2021
Payments due to content publishers$180,673 $165,894 
Accrued cost of revenue107,300 142,014 
Marketing, retail, and merchandising costs56,015 47,428 
Operating lease liability, current51,345 37,116 
Content liability, current106,341 70,462 
Other accrued expenses124,162 86,141 
Total accrued liabilities$625,836 $549,055 
Deferred Revenue: Deferred revenue consisted of the following (in thousands):
 As of
 September 30, 2022December 31, 2021
Platform, current$40,453 $22,240 
Player, current19,648 23,520 
Total deferred revenue, current60,101 45,760 
Platform, non-current4,931 9,324 
Player, non-current21,338 19,402 
Total deferred revenue, non-current26,269 28,726 
Total deferred revenue$86,370 $74,486 
Other Long-term Liabilities: Other Long-term liabilities consisted of the following (in thousands):
As of
September 30, 2022December 31, 2021
Content liability, non-current$44,619 $51,211 
Other long-term liabilities31,776 31,274 
Total other long-term liabilities$76,395 $82,485 
7. CONTENT ASSETS
Content assets, net recorded as part of Other non-current assets consisted of the following (in thousands):
 As of
 September 30, 2022December 31, 2021
Licensed content, net$235,500