1. $ROKU (Connected TV hardware & software provider)

Problem: Connected TV software is clunky with weak advertising capabilities

Solution: Roku OS creates an all-in-on platform for streaming that serves the consumer, advertiser, manufacturer & content provider

2. $ROKU OS is the moat.

Roku has executed the licensing of its OS quicker than competitors

Market Share:

Roku @ 33%
Amazon Fire @ 12%
Samsung Tizen @ 11%

Roku is focused on the software being TV first compared to HTML designed for web and Android designed for mobile.

3. $ROKU is designed for simplicity and solves a painpoint for manufacturers taking away the issues of creating and updating OS and hardware design - a win-win partnership

A comparison -

Roku OS is the iOS of TV
Amazon Fire is the Android of TV

OS strategy is now scalable.

4. $ROKU strong execution will now ride the secular shift from linear TV to streaming accelerated by COVID

Key: Roughly 30% of consumers consume video through streaming, yet only 3% of ad budgets are directed towards reaching those consumers (Magna Global Study)

5. $ROKU will leverage its OS with its OneView Ad Platform to attract advertising dollars

Acquisition of dataxu is moving smoothly with the rebranding of the direct selling platform (DSP)

Differentiator: Leverage first party data info to help better measure and optimize ads

6. $ROKU ultimate goal is to sell a platform that helps advertisers invest marketing dollars in OTT AND media more effectively

Advertisers can now reach four out of five US households across Roku Media & other OTT platforms, desktop & mobile

Strong reach --> inventory demand

7. $ROKU now has fingers in both the supply ad inventory and demands ad space for its own offerings. It says it will continue to work with companies like $TTD to sell its ad inventory.

Important to keep an eye on how this evolves and if companies limit access to inventory.

8. $ROKU metrics indicate larger OPEX growth compared to revenue growth as per Q1 2020. Much of this is due to S&M to growth as it expands globally. This is prudent as it doubles down on market leadership as COVID causes an acceleration in streaming as people stay at home.

9. $ROKU metrics are solid driven by high margin advertising

Platform GM: 55-65%
Player GM: 8-12%
ARPU: $24 and growing 28% YoY

Behaviourial changes of TV ad buyers to be more prudent with marketing spend will result in a LT shift to programmatic advertising - drive platform GM

10. The $ROKU Channel pioneers a free ad-supported channel that serves as an aggregation of free content. Roku has seen a search in free trials for premium subscriptions and this can be funnel for SVOD conversions.

Potential to be a central discovery platform to shop for SVOD

11. $ROKU is bringing value to the consumer, advertiser, manufacturer and content provider through its platform.

Prudently investing to capture market share and cement its leading position.

Relatively cheap with compared to other SaaS/platform companies.

12. $ROKU has ST headwinds with advertising being hit reflected by its price. However, so long as it executes on its strategy, it should come out of COVID as a winner

Growth rate > 50%
LTM EV/S - 12x
NTM EV/S - approx 9x

I have taken a position.

@Beth_Kindig @saxena_puru @OphirGottlieb @cperruna
@7AustinL @adventuresinfi @investing_city @InvestmentTalkk

Did I miss anything out? Thanks for all the quality content on this fun part of twitter.