But to answer your question on guidance, we did have a 606 adjustment in Q3 that did add 200 basis points of margin to Platform. We don’t — there’s no guidance to give for that, because, of course, that depends on the forecast that we have at the end of the quarter for 606 adjustments. But we do feel good about gross margins ex that 606 adjustment and where they are on a go-forward basis. But mix will play an impact on that based on the M&E market, which does continue to remain challenged. And we’re expecting that business to be challenged going forward. So that gives you a little bit of color on how to think about gross margins. To your question on OpEx, we guided to a gross profit of $405 million for Q4, and an EBITDA of $10 million. You all will do the math that puts OpEx in that $500 million to $510 million range.
From a go-forward perspective, we’ll give more guidance for 2024 next quarter when we do Q4 results, but I would anticipate low-single-digit growth rates from a run rate basis off that. But we’re — because we are focused on driving towards the positive adjusted EBITDA, but we’re also going to balance that with growth and look at positive ROI initiatives and invest in those as we look at to expand our scale and our monetization.
Steven Cahall: Thank you.
Operator: Our next question comes from the line of David Joyce with Seaport Research Partners.
David Joyce: Thank you. Could you please discuss your thoughts about the carriage deals in the legacy world such as Charter and Disney where the streaming apps are becoming more prevalent on those cable systems. How might that impact your business model or plans? And if you could marry that thought with the increasing pricing on the streaming services? How do you think the consumer is reacting to all of the streaming choices out there and the pricing versus the legacy model in terms of how that could impact your streaming trajectory?
Anthony Wood: Hey, David, this is Anthony. Well, I think, at a high level, the agreements like you just highlighted also highlight the importance of streaming in the current and future TV ecosystem. So, the fact that pay TV operators are more actively trying to promote streaming offerings, I think, just shows — it just makes it very clear that streaming is the future. And we’re the number one streaming platform in the United States. We’re in a great position to continue to benefit as the world and the country shifts to streaming. In the US, for example, our active account base is bigger than the larger three pay TV providers combined, which is awesome. I think when we started Roku, people would have thought that would never happen.
We’re the number one TV streaming platform in the country by our stream. And these both — we build both of these positions while competing with very large competitors. So I think we’re well positioned to continue to monetize your activity engagement on our platform, no matter where the viewers attain their streaming subscription credentials. So, I just think we’re in a great position and these pay TV companies are trying to figure out how to make the transition to streaming. But it’s going to be very tricky and very difficult for them to do that. And if you look at the Roku Platform, it serves not just viewers that are cord cutters and just sign up for Netflix and YouTube and The Roku Channel, but also, we do serve pay TV customers. Virtual TV services are very popular, even non-virtual TV services.
Like, for example, I personally live in a spectrum area, and I use Roku, obviously, to watch television. But I also subscribe to the Spectrum app, which is a great app on Roku as well. So, I think that we’re great at selling subscriptions. We monetize all viewer activity, not just by selling subscriptions. And we monetize viewers no matter how they attain their streaming credentials. And we’re extremely well positioned to continue to do well as the world shifts to streaming.
Charlie Collier: I think our big headline is going to be that you watch TV through Roku.
Anthony Wood: Yeah, it’s surprising. And I have a pay TV subscription, right. But it’s through the Spectrum app on Roku.
David Joyce: All right. Appreciate it. Thank you.
Anthony Wood: And then you asked the impact of increasing — price increases on streaming. I mean, it’s a natural evolution of the ecosystem. It will raise overall streaming revenue. And I think we’ve seen so far it’s been good for our business because we have a large business distributing content services. We do billing. We have revenue share arrangements. We have a lot of different arrangements that result in that being positive for our business overall.
Operator: Our next question comes from the line of Rich Greenfield with LightShed Partners.
Rich Greenfield: Hi, thanks for taking the question. Anthony, a lot of your streaming partners, your media and entertainment companies are losing billions of dollars and Wall Street is putting a lot of pressure on them. I’m sure you’ve seen their stock prices at multi-year, even multi-decade lows. What can Roku do to help them accelerate revenue growth and reduce costs? Like, what are the options or what types of creative things could you do to help these companies that are really struggling in their streaming businesses? Thank you.
Anthony Wood: Well, I mean, as they transform their businesses to streaming-first companies, I mean, there’s a lot of ways we can help them. We — that’s what we do, actually, at our core, is connect viewers with streaming services and advertisers. And we do it in a lot of different ways. We have a lot of products that can help them build their businesses, whether they’re trying to build an ad-supported business or whether they’re trying to build a subscription business. We’ve spent a lot of time putting those features into our platform, thinking deeply about it. And so, just in terms of effectiveness for them and spending dollars to make the transition to streaming and to sign up new subscribers, we’re by far their most efficient and effective platform to do that marketing platform.
So that’s one. Two is, there’s different ways for those companies to distribute their service. They can create apps. And a lot of companies are trying to do that. But that’s a heavy lift. I mean, when you do your own direct-to-consumer service, create your own app, it requires a lot of technical expertise. It requires a lot of marketing expertise. It requires a lot of money to acquire customers and retain customers and build user experiences. And the other way is for those companies to work with Roku and integrate into our overall user experience with what we call premium subscriptions, which is a way for them to offer SVOD services but without doing the heavy lifting of building their own app and figuring out how to become data science experts and how to build engagement when people might be using it — customers might be in a different user experience.
And so, that’s another way that a content partner or an app — or, sorry, a studio that’s — sorry, a streaming company — a company — a media company that’s transitioning to streaming can much more efficiently build their business without building a lot of new streaming expertise and with focusing more on what they’re good at, which is the content and their programming. So, those are a few examples. I don’t know if — Charlie, do you have anything?
Charlie Collier: Rich, one thing we talk about a lot is Roku is a really powerful engagement engine. So as people are moving from certainly subscription services to now embracing ad sales, we can help them drive engagement. And we’re seeing that a lot. It’s a really big shift, even psychically, moving from trying to get people to subscribe and not churn to getting them to watch the shows and the commercials. And so, we’re really good at driving engagement and we’re having a lot of positive response and seeing the impact of our media as we help our M&E partners drive engagement. And then, another thing we’re doing is windowing differently with the studios. So, you’re going to see a lot. We’re very efficient, as Anthony said, with respect to our programming costs.
