Dan Jedda: Hi, Jason. I’ll take the second part of that question on guidance. Obviously, we performed far better than what we said when we issued our 8-K in early September. And the reason for that was we did have a 606 adjustment that we talked about in the letter that I talked about earlier. We had a great September. And in Q3, on video ads revenue, we had a very strong content distribution quarter as well. And we saw the opportunity to go even a little deeper in our operating cost savings. And so, a lot of that played in to what resulted in Q3. And going forward, the ad market is variable. It’s challenging. A lot of ads are running closer to air date. That does create some variability within a quarter. It’s a very uneven ad market recovery.
We’re doing our best to forecast that. We think we’ve got a good handle on that. Content distribution activities is less seasonal and slightly more predictable. But the guidance is to give the best view that we have at the start of the quarter when we give the guidance. So, it’s not — I wouldn’t say it’s like overly conservative, it’s not overly aggressive. We don’t give a range for a reason. We give what we believe is our best view at the time that we give this call.
Jason Helfstein: Thank you.
Operator: Our next question comes from the line of Shweta Khajuria with Evercore ISI.
Shweta Khajuria: Thank you for taking my questions. Could you please provide some color on what drove the net adds acceleration specifically? You pointed to a couple of things in your letter. But anything that you can point to if it was specific to this quarter or something that was one time or just the trends that you saw? And my next question is, anything you want to call out on macro? There are a couple of other advertising platforms that did call out impact from the Israel war. Anything that you saw or just the overall brand sentiment right now and in Q3? Thank you.
Anthony Wood: Hey, Shweta. This is Anthony. I’ll ask Mustafa to see if he has any color on [indiscernible] net adds in the quarter. And then I think your second part of your question was about political ads — what was the question? [indiscernible] The war, Charlie can take.
Mustafa Ozgen: Hi, Shweta. This is Mustafa. Thank you for the question. In terms of the drivers of the net adds in the quarter, it’s a combination of strong growth in international markets as well as in the US market. Although we’re approaching half of the broadband households in the US, we still continue to grow and we still see growth opportunities as the shift with streaming is happening in the US and followed by the international markets. Overall, both the TV devices and the player devices were contributing to the growth. In general, TVs are slightly higher than the players because of the international markets that we have a strong share of TVs than the players because of the mix of the devices used by the consumers in those markets.
Overall, just looking at the international, we are doing really well in Latin America. In Mexico, we are the number one selling TV OS. We launched The Roku Channel, which continues to grow in reach and engagement. And we are beginning to monetize in Mexico. And again, the improvements that we’re doing in engagement and the improvements we’re doing with the distribution with our TV partners and with our player devices, we see continued growth in Mexico. And we have more than 10 TV partners in Mexico, and they’re all growing their market share, and that’s helping us to get the number one selling TV OS in Mexico. Equally, we’re growing in other markets like Brazil. We have a strong growth in Brazil. And just like Mexico, Brazil is a large country in terms of number of households.
So that’s helping us to drive our net adds.
Dan Jedda: I’ll just add really quick to that. On the international, it’s definitely a big tailwind for us, but on the ARPU side, which of course takes the actives into account, well, we were down 7% at $41.03 year-on-year. We did see a sequential change. That’s on a 12-month trail basis. We did see a sequential growth in ARPU, which is a big positive, despite a very solid net active adds quarter. And then, we also look at it on quarterly. We don’t share it out, but the quarterly ARPU also had a year-on-your change, positive change. So, really good ARPU in addition to a very strong net active adds for the quarter.
Anthony Wood: This is Anthony again. I’ll add just a couple other observations about net adds. One is we are beginning to see a shift in consumer’s minds to selecting value-oriented products and we excel in the value segment of TVs. That’s what helped us. And then, I think we also continue to see consumers selecting larger screen size Roku TVs, which is also beneficial because they tend to be consumers that — the larger screen sizes tend to be in the main room of the house, and so it’s a great spot to be in. And then, Charlie, do you want to talk about…
Charlie Collier: Yeah, thanks for the — Shweta, thanks for the question about the conflict. Thus far, we are not seeing a direct impact to ad spend from the conflict. We would, of course, like most companies, experience impact from it to the extent that it affects the macro environment. But again, we’re not seeing a direct impact as been from it yet.
Shweta Khajuria: Okay. Thank you very much.
Charlie Collier: Thank you.
Operator: Our next question comes from the line of Ruplu Bhattacharya with Bank of America.
Ruplu Bhattacharya: Hi, thanks for taking my questions, and congrats on the quarter. My first question is on the upfronts. Can you give some more details like how did upfront pricing compare to last year? I mean, I think last year you said you had $1 billion-plus in commitments. I mean, did you continue to gain share? So, any details on — specifically on the pricing? Because in the scatter market, as you open up your DSP to working with third-party DSPs, are you open to price discovery below that level of the upfronts? And so, how do you trade-off the fill rate versus CPMs and margins?
Anthony Wood: Hey, Ruplu. This is Anthony. Charlie, obviously, can take that question.
Charlie Collier: I was hoping you’d take it. All right. Thanks, Ruplu. Look, I’m not going to break out the upfronts, except to say you’ll be pleased with our numbers overall, whether they come in the broadcast upfront calendar, upfront scatter, at the blend you just described. I’ll start by saying, look, I’m pleased to report that we did do well in terms of total upfront dollars to the platform. It’s interesting, as I said in last quarter’s earnings call, this year was a very different one for everyone across the industry because it preceded at such a slower pace than usual. And despite the pace, it closed on time as we knew it would and we’re pleased with the outcome. It was interesting to me because the sales team pretty much pivoted from closing the upfront right into focusing on scatter.
And one trend you see is advertisers are still spending closer to air dates. I think that’ll continue and we certainly saw evidence of that in the third quarter. So, when I look at total dollars, we did well. We continue to take share from the overall TV market because of a combination of our unique scale, the data we offer and compelling Roku-only offerings. Again, business tends to keep coming in late as we keep highlighting, but the ad recovery itself is uneven, as Dan mentioned, across categories. So, that’s just making forecasting particularly challenging. But as broadcast and linear entertainment impressions continue to decline on Roku — as a reminder, by the way, global hours on Roku grew 22% year-over-year, while linear hours in the US declined 15%.
So, the gap is significant. So, as this continues, I believe CTV in general and Roku specifically will continue to be planned and bought earlier in the process. So, overall, advertisers engaged with Roku on the upfront. I talked a little bit about our third-party DSPs. We’re seeing great engagement there too. And we’re seeing again later than usual, but we’re seeing that engagement scatter as well. We’ve talked a lot about having nearly half the broadband households in the US. And the unique advantages of that scale in our data and our ad products like Roku City or shoppable ads or some of the powerful tools we use to attract and engage and retain audiences, I think all of that is what’s seeing us drive that success.
