Roku’s Q3 Earnings: Why the Fox Merger Changes Everything for ROKU Stock Nov. 2
Fox Corporation offered $160 a share for Roku, but the DOJ antitrust review keeps the deal in limbo, and Q3 earnings on Nov. 2 will reveal whether the standalone business actually justifies that price.
Investors are watching Roku (NASDAQ:ROKU | ROKU Price Prediction) ahead of third-quarter results expected around Nov. 2. This is the first full quarter since Fox Corporation (NASDAQ:FOXA) agreed to buy the company. I’ll be reading it as a test of whether the standalone business still supports the $160 per share offer.
Record Momentum Meets a Merger Cloud
Last quarter, Roku delivered GAAP EPS of $1.08 against a $0.5625 consensus. That made it the 5th consecutive EPS beat. Revenue rose 21.9% to $1.3547 billion, Platform revenue climbed 25%, and advertising gross margin expanded 650 basis points to 62.4%.
One-time items shaped that result. A tariff refund of about $37 million raised Devices gross margin to 20.1%. Without it, that margin would have been -7.6%. Separately, $18.72 million in merger-related costs weighed on EPS.
Fox announced the deal on June 15, 2026, and management stopped releasing guidance. The Justice Department has since extended its antitrust review of the $22 billion transaction, and the deal can’t close until that review ends. Shares sit at $157.23, up 44.93% year to date and just below the offer price.
Consensus Points to Triple-Digit Earnings Growth
Q3 EPS estimates slipped in the past week, from $0.548 to $0.53.
| Metric | Consensus | Prior Year | YoY Growth |
|---|---|---|---|
| Q3 FY2026 EPS | $0.53 | $0.16 | 231% |
| Q3 FY2026 Revenue | $1.41 billion | $1.21 billion | 16.7% |
| FY2026 EPS | $2.9767 | $0.57 (sum of quarters) | 422% |
| FY2026 Revenue | $5.63 billion | $4.737 billion | 18.9% |
Political Ads and Devices Margins Will Set the Tone
Political advertising comes first. Management expects political spend to build through late Q3 and into Q4 ahead of Election Day. The focus is whether it holds Platform growth near Q2’s 25% rate. Third-party DSPs already handle ~75% of in-stream video ad spend, which gives campaigns easy access to Roku inventory.
The new Home Screen, the biggest redesign in a decade, finished its U.S. rollout in early Q3. Look for early proof that it’s making money, plus any update on international timing.
Devices remain the pressure point. The tariff refund won’t repeat, distribution costs for Roku TV models are weighted toward the second half of 2026, and Sales & Marketing expense should rise as shipments ramp. Tighter DRAM and Flash supply adds cost risk. In April, though, CEO Anthony Wood said that “as memory prices go up, the bill of materials advantage we have versus competitors gets bigger.”
Finally, any word on the DOJ review or the expected closing date matters as much as the quarter itself. Roku is reportedly skipping executive commentary, so the shareholder letter has to do all the explaining.
This Report Sets the Floor Under the Fox Deal
With shares just below $160, the deal terms limit upside. If regulators delay the transaction, the downside depends on what Roku is worth on its own, and Q3 results help define that value. Analysts hold 7 Buy and 20 Hold ratings with a $162.33 target, and the stock trades at 67 times earnings. A clean quarter would back the case that Fox is paying a fair price.
Contact [email protected] for any questions or corrections.
After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years, he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, Money Morning, and, of course, 24/7 Wall St. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
