Okay. Good morning, everyone. Again, I'm John Hodulik, a media and telecom analyst here at UBS. And I'm very pleased to announce our next speakers come to us from Roku. We have Dan Jedda, the CFO, and Conrad from IR joining us as well. So we've got about 35 minutes of Q&A. I've got a list of questions to run through. And if anybody wants to lob one in, I can. I've got the iPad here, and I can work it into the conversation, so with that, again, thank you guys for joining us.
Yeah. Thanks for having us. Excited to be here.
Yeah, as we do every year, could you just give us a sense of how you see Roku positioned and what your priorities are for the company as you look out into 2025?
Yeah. Sure. Well, so going into 2023, we set our main goal was to get profitable by 2024. We made that very clear back in January of 2023. And we were able to accomplish that goal, a whole year ahead of schedule. We hit EBITDA positive in 2023, $4 million. But it was a huge win because we weren't expecting to do it until 2024. And as we exited the year, again, we made it very clear what our priorities were going into 2024. And that was on the monetization side of the business.
So we right-sized our cost structure. We got it in line. And now our focus was and continues to be on growing our platform side of the business, which is our monetization. So that's basically focusing on ads, on our ads business.
It's focusing on our content distribution business. It's focusing on our subscriptions business. We've got a lot of product initiatives in all these areas. It is our top priority, as we come out of 2024 and going forward. So, we think we're well-positioned to do that as well. I mean, we've focused a lot on these as investment areas within our business throughout 2024.
Okay, so the move to streaming is obviously still very much in the early days here in the U.S. and even more so, I'd say, globally. What do you see as the biggest drivers of growth for Roku over the next several years?
So, yeah, first and actually, quite importantly, the secular tailwinds in the industry are in our favor. They are a tailwind. So if you think about the overall ad market, the linear plus the CTV ad market, the shift is clearly moving from linear to CTV. The eyeballs and the hours moving much faster than the ad dollars. And so, like, when I look at the total addressable market, it's like a third of the ads have moved from total advertising from linear to CTV. It's growing. It's increasing its growth rate. That's going to continue.
That's a secular tailwind for us. It puts us in a great position. That's a huge positive for us just in the industry itself.
Now, we as a platform are well-positioned to take advantage of that shift because we control the home screen. We control the UI. I'm sure we'll get into some questions on that. But that allows us to take particular advantage of this, of this shift. Again, like, the eyeballs and hours are already happening. We've mentioned a lot of data points on the hours growth. Our hours growth are growing right around 20%, in our total platform. You know, they're in the hundreds of billions. It's very impressive, the hours growth and the Streaming Households growth, which is what we call, Active Accounts.
We call them Streaming Households. So we're approaching, and in fact, are very close to, half of broadband penetration in the U.S.
So we have half the households, which means we have a tremendous amount of reach in our platform. And that allows us a particularly powerful position to take advantage of this TAM. If you call the CTV ad market an adjustable market as the dollars shift over, we're in a unique position to take advantage of that.
For sure. Maybe we'll start with, you know, sort of the highest level sort of competition in the CTV OS market, especially maybe in the U.S. How would you characterize the competition? Is it, you know, versus, you know, this year, say, versus a year or two years ago? How does competition appear to be shaping up to you?
Yeah. There's, that's a great question. So you look at it, I kinda look at it on two fronts. You have the competition in the advertising perspective. You have competition in the OS perspective or the platform perspective. We look at it both ways, of course. Obviously, you know, it's very obvious that companies have started to realize the potential for this space, not just in the ad dollars, but in the OS. You see more companies moving into advertising. You see more companies, and some recent announcements of folks moving in, companies moving into the OS space. It just tells you how valuable this industry, this space is.
And one of the benefits of Roku, you know, and really a testament to Anthony, he saw this, you know, 15-plus years ago, that this was going to be a big space. Roku's first-mover advantage is tremendously helpful. Again, as we are number one in this space, and not by a little. We're number one by a lot. It's a great position to be in. You do not want to be in the OS space specifically, I'm talking now. You do not want to be a number five or a number four or even a number three player's part. You wanna be number one or number two. And that's Roku's unique advantage is we're number one in the U.S.
We're number one in Mexico. We're number one in Canada. We're gaining in the other areas. We see paths to being a dominant player in all our countries that we operate in. And so that is, again, a very unique position. And we've invested a lot to get there. You can't just come in and, you know, just become a market-scaled player in this space, in the OS space. We've invested a lot in the OS. It's a unique OS. It's built specifically for CTV streaming. Our streamers love it. They love the simplicity of it.
Our advertisers are starting to see the benefit and the value of owning the OS in our reach, in our ad product, in our subscription service, and what we can do. So, while the competition is there, again, we're in a very unique position. Being the number one in terms of OS, we're going, we're growing that. It's not shrinking. It's actually growing.
It's growing in every country that we operate, including the U.S. And then from the advertiser perspective, yes, there are a lot of different players that have moved into the, quote, AVOD space or ad space. Again, it tells you the testament to where the dollars are going in this space. And we're uniquely positioned to benefit from our different ad products. I'm sure we'll get into some questions on that as well. Not only do we have tremendous reach, 120 million people start their streaming experience in our home screen.
That is incredibly powerful reach. And then within the ad product itself, our ability to target, our ability to differentiate ad product is really unmatched in my opinion, in the market segment space.
So maybe if we drill down into a couple of, you said there's some recent news in the, on the CTV OS, sort of competitive front. First, Walmart's acquisition of Vizio. How much of a headwind or how does that impact Roku?
Yeah. We obviously get that question. And this was not a surprise for us. We did see this coming. One of the, a couple of things to say on that. First, our first-party TV is a differentiation strategy. It's an amazing product. It's doing very well. It's priced appropriately. And that helps us, because now we're fully distributed for our first-party TV, where we started out originally for about six months exclusively with one retailer, Best Buy.
At the start of this year, we have basically branched off and we're fully distributed and becoming more so even on a regional basis. But with the big retailers, we're fully distributed with our first-party TV, including Amazon, including Target, including Best Buy, including Walmart, etc. So, that's one piece.
But getting back to the specifics of your question, we'll continue to do business with Walmart. We have a great relationship with Walmart. Our streamers love our product. They ask for Roku by name. And so, I don't, you know, it's, I do not believe that this will particularly impact us. In fact, in our last quarter, we talked about reaching 100 million broadband, 100 million Streaming Households in the next 18 months. We basically, you know, we said very clearly, like, we're gonna grow in all our countries, including the US. So we see a path to 100 million Streaming Households in this space.
That's very powerful. We're at 85 million right now. That path is not, like, years and years away. It's relatively quickly. So we feel good about, you know, despite the competition, despite the movements of content companies into the AVOD space, despite the move of more into the OS space, we feel very good about our position.
So you don't think it doesn't sound like I don't wanna put words in your mouth, but it doesn't sound like you think this deal is really gonna change your account growth that we've seen?
Yeah. You know, we wouldn't have said 100 million if we did not see this path to it. You know, that is very powerful. That's 15 million more from where we are now. That's gonna happen, you know, call it over the next 18 months, which is what we said when we had our last quarter earnings. We feel good about it.
That's great. What about competition from big guys like Google and Amazon? I mean, obviously, they're making, you know, with their devices and now their TVs, or at least from Amazon Fire standpoint. But, I mean, how should we think about competition? Obviously, these guys have a big checkbooks. But at the same time, the, from what I understand, they're doing other things as well, not just CTV.
Yeah. Yeah. Again, it's really the same answer. We have been in this space, you know, for 15 years. They've always had big checkbooks. When I was at Amazon, they had a big checkbook as well, and, you know, you can't diminish being number one in this space because it's the position you wanna be in, and it's a position of strength. That's where Roku comes from, a position of strength. We're used to this. We're used to being surrounded by big companies. We also partner with those companies. So when you think of, you know, Amazon, yes, they have an OS and a player, but they also need to be on Roku.
There's a partnership there. Same with, you know, there's a partnership with Google. There's a partnership with Walmart.
These are all partners and competitors. And you know, that's fine. That keeps us on our toes. But again, I go back to being number one. We've always had this competition. We've been able to grow our share every year for the last several years in the U.S., the same in Mexico, the same in Canada, the same in Brazil, the same of what we call the rest of Latin America. So, I don't see it changing, going forward. And I again, that number one position is the position you wanna be in, in this space. And you know, it's not like we're number one with 20% broadband penetration.
We're number one with close to 50% of broadband penetration in the U.S. Mexico is going to get there as well to that level of penetration and relatively soon.
And when you have that kind of penetration, a lot of good things happen because you've built the scale. Now, it was expensive to get to that position, obviously. You have to build a great product. You have to invest in it. You have to distribute it, etc. That investment, we'll continue to do. But a lot of that investment is behind us. So now we're focusing on monetization, monetizing all that scale that we spent years and years building.
Gotcha.
I would just add one more point is we've never had a first-mover advantage. There was a little company called Google that was first to market on the TV license OS. We just did it better, and we're able to get to our market share that we had today.
Gotcha.
Just a couple more. Again, getting back to sort of recent events, The Trade Desk recently announced it was developing a CTV OS, even though the CEO said it wouldn't necessarily compete directly with Roku. Just do you see this as an eventual risk for the company and maybe, you know, portending sort of changes to the business model? I don't. I don't see it as a risk. Again, like, I think it's more of a testament to companies that see the value of being in the OS space. Again, when you have a first-mover advantage, when you remember we built this position over 15-plus years.
We built it, again, not on a monetization side of it. That's what we're doing now. We built it on an amazing streamer experience. So our customers, our streamers absolutely love the product.
So you have to be able to do both. You have to actually have an OS that the streamers come in and wanna use, and you have to have a way to monetize it. Again, we have both of that. Now, you know, will players come in and maybe try to get some small percentage of market share? Perhaps. I think that's playing defense. That's playing from behind. That's a very difficult position. I also think that, again, like with everything, we have great partnerships. We have a great partnership with The Trade Desk.
They're one of many DSPs that we integrate with, and one that we integrate deeply with. So there's also a partnership there.
Gotcha, and just lastly on this, if you look at your crystal ball, I mean, how do you see the market over the next five years from a consolidation or M&A or we don't have to give a, you know, names, but do you expect there to be consolidations? It seems, frankly, aside from Roku and your dominant market share, there's a lot of smaller players out there. Do you think they eventually get rolled up?
That's a hard question. You know, people have been talking about consolidation on the content side of it for many, many years. And some of that is happening. I think it's been slower than most expected. Who knows with the new administration how that changes on M&A? I find it hard to speculate in that area. I think for us it's more important, like we're heads down focused on the operational execution of monetizing this incredible asset that we've built up over many, many years. And so if it happens, it happens. We'll be ready for it.
We are forward-looking in how we think about things. But it's really hard to predict what happens in any OS space, in any content space, you know, from the different media companies out there.
I just think that regardless, I strongly believe that Roku's in a good position to take advantage of any, whether it's status quo, whether there's more acquisitions in this space, whether there's more consolidation and/or leverage in the DSP space. I think regardless of any of that, we are in a very good position.
Gotcha. Now let's shift towards monetization of the platform. And maybe let's start with outside the U.S., or opportunities outside North America. First of all, what's competition like in terms of the OS market? And then how big is the opportunity, right? A lot of these markets aren't as advanced from an advertising standpoint, and they might even be behind from a streaming standpoint in general. So just how would you.
Yeah.
Characterize the non-North American opportunity?
That's a great question. So they are all very different in where they are, not just on the CTV and the OS side. In other words, CTV moving to digital. They're also very different on where they are on the ad perspective, on the advertising side. So the way we look at every country is very unique and very different. And we're at different stages in every country. So for example, in Canada, we're basically in the monetization space. We've got enough scale. We're monetizing it.
The Roku Channel is there. We're investing in the subscriptions business in Canada, just like the U.S. And we're in a good position. Mexico, we have tremendous market share, broadband penetration in Mexico. It's exceptional.
We're getting to a point now where we're really focused on starting to monetize. In Brazil, we're not there yet in terms of we're building scale and building it very fast. It's just further behind, and it's gonna take us, you know, more time to get to the scale we need to trend the market to truly monetize Brazil, and same with rest of what we call the rest of Latin America. So we're at different stages. I will say, though, that even though they're at different stages, the cost to grow market share is very different. It's obviously with the U.S. being very mature, it's more expensive to get scale in the U.S. via distribution.
That is, you know, it's just different when you're at different stages of it. Being in early is a huge advantage because it just doesn't cost as much to get to the scale. We've already built the OS. We may have to make modifications in different countries, of course. The core OS that we've done is already built, and it does port over to the different countries. A lot of the investment, it's not like you are incrementally investing, you know, a significant additional amount of money for the OS to go into Mexico.
Now, you do, you know, we do have the Roku channel in Mexico, and that's very different than the Roku channel in the U.S. Your investment in the OS is different. Your cost to get fully distributed is different. Being in early is really important.
That's how we think of our international expansion: where we can grow to be a significant presence so when the market is ready and when we have scale, we can turn around and start to monetize that, just like we're doing in the U.S. and Canada and just starting to do in Mexico.
Speaking of the monetization in the U.S., so you laid out the landscape, I think. 40% of the viewership, just based on our numbers, has migrated to streaming, but just 25% of the ad dollars. So do you think, just given the initiatives we've seen more recently at Amazon, Netflix, and Disney, and on some of the other sort of media co DTC services, is that the shift in the ad dollars gaining momentum in your view, or how do you see that over the next?
It absolutely is gaining momentum for a variety of reasons. You know, you have, obviously, you've had big content available on streaming. That's always been helpful. Now you have sports moving over, which is helpful to gain in terms of advertising. It's the lines are starting to blur between, like, all sports being on linear. Now you actually have exclusive games on digital, which is a tailwind for us. You have unique ad products in digital that are not available in linear, which I believe, if it hasn't helped already, is going to be the catalyst that allow more dollars to come over.
That's where I think our expertise lies, and so, and then, of course, you just have pure scale. The scale is changing. The scale is becoming digital, more digital, which matters from the brand advertiser perspective. So again, like, all this is what I referred to earlier from the secular tailwinds perspective and why we think we're, you know, in a very unique position to take advantage of it.
Yeah. What are the impediments to growth? 'Cause you would think now that the sort of inventory is growing so rapidly that the dollars would be flowing very quickly. But we often hear that.
Yeah.
That the fill rates are not where, you know, where you would like them to be.
I think, you know, it is a little, and not perplexing, but yes, some of the dollars are moving slower than the hours. You'd think they'd move, you know, if not quicker, at least at the hours or the eyeballs. That's not happening. But that will happen over time because that's where the performance is gonna be. And I think as new and innovative ad products come out, that actually should speed up that because you'll be able to measure.
Think about it like if you could truly have a good ROAS measurements and/or the best targeting imaginable, which will allow CPMs to adjust to whatever the market CPMs are for highly targeted, depending on where they go. I think all this will come into play over time.
And I think I don't have great answers as to why some of its legacy, some of its sports is still on linear. I think as all that transitions that it'll the dollars are going to follow. And I don't think they're gonna follow in a slow way. I actually think they're gonna follow in a fast way because there's going to be an ability to not only get the broad reach but to measure the efficacy of what you're trying to, whatever you're trying to measure from an advertising perspective. The efficacy is gonna be far better in the digital world than it is in the linear world.
Gotcha. How has the relationship with The Trade Desk helped here in 2024?
Yeah. It's The Trade Desk going very well. We've integrated. We've been integrated with The Trade Desk for a while, but more importantly, we did a deeper integration with UID 2.0. That has the tendency to allow more volume to come our way. And once more volume comes our way because we're not sold out on the Roku Channel, we can fill that volume. And, you know, it's really about performance and measurement. So, we're doing a lot with The Trade Desk, not just with The Trade Desk, but with other DSPs. That's going to continue. More volume will come our way.
Then it's all about performance. And when you think of what we're doing, we're integrating with measurement companies. We're developing our own measurement capabilities. We believe that, you know, our ad products will perform.
The good news is if they don't perform to some sort of standards, we'll quickly adjust because we have the capabilities to measure the performance. That's why we integrate with companies like iSpot and other ad measurement capabilities. We're ensuring that the efficacy of the ads are what our advertisers and our partners want.
Gotcha. Moving over to the Roku channel, me and the team look at the Nielsen Gauge numbers very closely, cut the numbers a bunch of different ways. And you guys have had phenomenal growth. So, so what's driving that growth, maybe even versus a lot of the other FAST guys? And then, do you think that you can continue to grow at, at those rates?
Yeah. Great, great question. I mean, I'm so proud of what Roku has done on the Roku Channel. So let me, let me give a few data points. As you know, I love data points. Let me just give a few data points on the Roku Channel. First of all, like, we've said this before, about a quarter of ingress of entering the Roku Channel is done through the app. The other 75% is done outside the app via the home screen and/or the UI. So we are unique as a platform in that we can have five, six, seven ingress points into the Roku Channel because we control the home screen and the UI.
It shows you the power of owning the home screen as a platform. That drives a lot of eyeballs and streamers into the Roku Channel.
The Roku Channel has great content. It doesn't have the most exclusive content. It doesn't have Netflix-type original content, but it has great content, and streamers love to be told where great content is that they can go stream, and so whether it's Fast, whether it's fixed, Fixed Content, that, that people wanna watch or our, our own set of, of originals, the streamers love that. They, they simply need to be told where it is and how to get there. Here's another data point. We talked about the home screen, the power of the home screen.
The home screen was static for many, many years. We, we were now making changes to the home screen. That is our focus on monetization, so one of the first changes that we made is the top bar we put in the Content Row at the top of our home screen. It was one of the first changes we've done in a while. We do the left nav changes a lot, but from the actual app grid, the top, we put in the content row. That content row is a machine learning-based content row. And the version one of that content row, it's relatively new. It's about six months old, maybe a little longer.
Version one of that content row increased our reach 6%, literally version one, our ad reach, our monetizable ad reach by 6% just by putting the content row up at the top. Because again, it's a machine learning-based content row that's showing streamers what to watch. A lot of that sits in the Roku channel. A lot of that sits with our premium subscription partners, etc.
That, as everyone knows, like, reach is a KPI that advertisers wanna see. Now, we already have broad reach, but we were able to increase it 6%. That's a big number just by putting the content row. And it had a positive streamer experience because hours went up relative to the A/B test we ran. And subscriptions went up because we put some of our partnered subscriptions in that content row. I mean, it is a win-win-win in the form of our home screen, but that we got more monetization out of it. We got our content partners to get more subscriptions out of it, and our streamers loved it.
That is just an example of the power of the home screen and driving eyeballs and hours to the Roku channel. I'm okay. I wanna give you one more data point.
So I'll give you another data point on the Roku Channel. This is a big one. Like, in the US, we, you know, we don't say this often, but I think it's such an important one and something I'm so proud of for the team for doing. In the US, two-thirds of our Streaming Households, we call that's what we call Active Accounts, Streaming Households, two-thirds engage in the Roku Channel. That puts us as the number two app on our platform. That is the growth. That is the power of the home screen.
So when you think about it, there's only one partner who's ahead of us in terms of Active Accounts or Streaming Households who engage in the Roku Channel in the US. That is incredibly powerful, and it shows you how we can generate a lot of supply for ad impressions in the Roku Channel.
Now, we got to talk about demand. I'm sure we'll get there. That's where, you know, ad product and integration with DSPs come in is to drive more demand. Supply, not an issue. It's actually pretty easy for us to generate supply of ad impressions on our platform.
You've talked about the strength and the home screen, you know, in terms of, you know, getting viewers or, you know, suggesting what to watch for viewers and how effective that is. One of the things that was hard for us as we, you know, looked at the company is just where you are in terms of monetization of that. You would think that, you know, so we cover all the media companies.
As these DTC companies move from new subscriptions to driving revenues based on engagement and advertising, that the value of that home screen is, if it really is that big of a driver on viewership, would just go up. You know what I mean? It would increase in value as we move more towards advertising-based DTC models. Can you help us get a sense for what inning we are in terms of your monetization of the home screen as a result of that?
Yeah. Great, great question. I, you know, baseball analogy, inning's hard. Like, it's not one. It's probably two, inning two. So early. We're very early. And let me tell you why. First of all, to answer your question on content partners, you know, one of the things we've been very clear about is M&E, the M&E vertical continues to be challenged. And we're not counting on M&E going back to 2022 levels.
We were very smart when we saw that M&E started to decline to diversify, not diversify, I mean, will always be a great place for M&E partners, but to diversify into other ad verticals. Think health and wellness, think insurance, think, you know, CPG, etc.
So, everything in my world, when I look at, you know, if we're looking at those, we are not expecting the M&E market to bounce back, and we're totally fine with that. If it does bounce back, it's gonna be even more positive for us because we're sort of a must-have spend for our M&E partners to drive engagement. But to answer your question on where we are on the home screen, I talked about the Content Row. In our Marquee Unit, remember, it's 120 million people start their streaming experience on the Roku home screen. I talked about the Marquee.
We have an ad unit in the right slot, in the right-hand side of the homepage. We call it the Marquee Unit. That never had ad video in it.
It was a static, call it a static display ad. Now it has video into it. That's a diversification strategy that's gonna allow more advertisers because they want video to come in and advertise with us. So think, trailers, which I guess is a version of M&E, but think the autos, they all want, they all want video. Now they got that. That's a new ad unit. We just released it this last quarter for general availability. It's doing well. On the left-hand, I talked about the content row.
On the left-hand side of the home screen, on the left-hand nav, we make changes all the time. For example, you know, there's the sports zones. There's other zones. That is a UI we control where we put the content in those zones, and we monetize a lot of that journey, that streamer's journey experience through sponsorships, through content that we monetize with ads, etc. A great example is the Olympics, where we had the Olympic Zone with Peacock in partnership with Peacock on the left nav of our screen.
We also had it in-app, but on the left-hand nav, where it was a great experience where streamers could come in and they could start their Olympic experience with that journey that we partnered and we drove more sponsorships. We drove a lot of subscriptions for Peacock that we monetize in addition to Peacock monetizing. Again, all part of the left nav. That, again, we're just getting started on the home screen. There's more things we're doing in the left nav.
There's more things that we're doing on the home screen that are coming. These are not conceptual. These are products that are being built and tested as we speak. So there's a lot of opportunity from the home screen perspective. And the UI, it's not just the home screen. It's the UI we control. It's into the different zones that we have. It's into TRC. It's into even the Roku City, which is an amazingly cultural phenomenon that we've been able to monetize. And we're working on more ways to monetize because people love the screensaver of Roku City, etc.
Got it. So it sounds like you have the, you know, from a home screen standpoint, you're optimizing the platform with these new products. And at the same time, you know, the M&E market obviously has been under pressure. I mean, have we got to the point so you have these sort of conflicting issues? 'Cause the M&E, you know, segment has been the largest buyer in historically. I mean, if you put putting them all together, first of all, do you at least can we at this point say that M&E has bottomed at this point? Or what do you think are the trends in the spending there?
Hard to say if it's bottomed. I'd like to say yes. It's very hard to say. I do think, like, you know, for while some M&E might go down, there's others that could potentially come in and help offset that. Think of Venu. Think of, you know, ESPN, DTC. Think of, you know, if other of our content partners do DTC. There's possibilities. There will be new entrants. And any new entrants, again, is going to wanna partner with Roku because we're half a broadband household. So you wanna partner with us to drive that subscriptions. Hard to say if it has, in fact, bottomed out.
I will say from our standpoint, and I've said this many times, M&E is a significantly smaller part of our overall platform revenue than in 2023. You know, we don't disclose what it is, but it's really gone down, you know, a lot from where it was at our peak. And so that is our focus on diversifying beyond M&E, as a vertical. It's still an important vertical for us. And again, we'll continue to do well with our partners on that. But where it bottoms out, when and where, a little unclear at this point.
Makes sense. Maybe just shifting to distribution for a little bit. You know, obviously it's an important growth driver. The number of new sort of sign-ups has slowed, but price increases have been a tailwind. How do you see growth in the SSD business as you look into 2025?
Yeah. So the biggest driver within SSD is our subscriptions business. And it's great. I'm glad you asked the question. I probably haven't done justice as to how much we're investing in the subscriptions business. Unlike ad products where you could just, you know, issue a new ad product and you'll get a lot of demand. Subscriptions takes time. You have to build. Subscriptions is all about building the streamer experience that ultimately leads to more monetization.
We have tens of millions of subscriptions that we monetize on our platform, of course. And it has never been a big investment area for Roku, until recently. We've always had a payments platform, which was an investment called Roku Pay, which has served us very well.
But now we have a dedicated team whose focus is building the subscriptions experience that allows us to better monetize our subscriptions and also, very importantly, create the very positive streamer experience. Whether that's, you know, the journey of signing up, reducing churn, bundles of subscriptions, you know, subscription-type management, manager products so you know where all your subscriptions are. There's so many different areas we can improve, and we are improving, and we are investing in this area.
I do believe it's going to be a growth driver for us. Again, that takes a little bit of time 'cause you have to actually build the product. It has to be an amazing product for our streamers. A nd then we, again, but we're building it with the context of having it be an exceptional streamer experience that will ultimately lead to more monetization, as we monetize all the subscriptions that come through our Roku Pay product.
Gotcha. We gotta sort of move ahead here. We have only a couple more minutes. Platform margins have been in the low to mid-50s range for the past couple of years. How should we think of this, you know, given the evolution of the business and the different parts that you've laid out, Dan? How should we think of that progressing from here?
Yeah. It's a good question. We've been in that 52%-54%. We have, you know, we have activities within the platform business that have higher margins. We have activities that have slightly lower margins. You know, I, how I look at it is I, I want EBITDA on a mix-adjusted basis. I want us going up and to the right. That's how we look at it across our businesses is, are we getting better through more efficiency, things like, you know, cloud delivery costs, cloud storage, you know, being more efficient with our content spend, etc., having ad products that are higher margin, ad products. And we, we are getting better.
The mix does play an impact on it. And how I think about it is, you know, on a mix-adjusted basis, we'll get better. On a mixed-unadjusted basis, I think we'll be in that 52%-53%. So anything that's growing faster, that's lower margin, we'll be able to offset it with just being more efficient. So, I don't see us going too much below that. And we're always striving to go above it. You know, I think as we, you know, as we develop ad product, if we can find those ad products that are 80-ish% margins, that will be a big tailwind for us. But right now, I see margins in that 52%-53%.
Got it. And then for Q4 guidance, it implies that you'll come in at $200 million plus of EBITDA in 2024. How should we think of the trajectory of EBITDA growth from here as we look out to 2025?
Yeah. I have, I think we've made it pretty clear that we are investing, but we're investing with capital reallocation in focusing in these investment areas. I do not see OPEX growing double digits. I've been pretty clear on that. I think it's gonna grow, excluding impairment charges, you know, in that mid-single digits. I think our revenue is going to grow double digits. When that happens, you obviously get EBITDA-adjusted EBITDA leverage. I see us getting leverage over time. You know, that's always our goal. I also have made a, you know, I think I've made the point that our free cash flow mirrors our EBITDA.
As EBITDA gets leveraged, I fully expect our free cash flow, which is our ultimate North Star KOM, to get leverage as well.
That's great. I think that's a great place to leave it. Dan, Conrad, thanks for being here.
Thank you so much.
Thank you .
That was great.