Earnings season always creates some winners and some losers. Streaming specialist Roku (ROKU 2.48%) was firmly in the former camp this time around. The company's stock soared by about 14% in one day following excellent fourth-quarter results. Though Roku has since given up some of those gains, it is up by an impressive 15% since 2025 started.

Some might wonder if it's still worth investing in the stock after its big rally. Fortunately, the streaming giant is looking at plenty of upside potential for patient investors. Here is why.

Roku finally bounces back

Despite its recent jump, Roku has significantly lagged the market over the past three years. The company encountered several issues that led to its poor performance, including slowing revenue growth and persistent net losses. These were partly due to broader economic issues. Companies cut back on ad spending a few years ago -- Roku's biggest source of revenue -- due to the challenging economic environment.

And with inflationary pressures, Roku chose to absorb many of the costs of putting its namesake streaming devices on the market instead of passing them onto customers. However, even as the ad market bounced back, Roku's performance barely improved -- until now. In Q4, Roku's revenue grew by 22% year over year to $1.2 billion, the best year-over-year revenue growth the company has recorded in some time.

ROKU Operating Revenue (Quarterly YoY Growth) data by YCharts.

Elsewhere, Roku improved its average revenue per user (ARPU) by 4% year over year to $41.49. Roku had failed to grow this metric in several quarters. Furthermore, the company's ecosystem continues to deepen. It ended the year with 89.8 million households, an increase of 12% year over year, and during Q4, it recorded 34.1 billion streaming hours, up 18% compared to the year-ago period.

Roku remains unprofitable, but it is also improving on that front. Its Q4 net loss per share of $0.24 was much better than the net loss per share of $0.55 reported in the prior-year quarter.

Think long term

Roku is the leading connected TV (CTV) player in major markets, such as the U.S., Canada, and Mexico. However, there remains significant growth fuel for the company, especially in international markets. One of the reasons its ARPU underperformed in recent quarters is that it was focused on increasing its presence abroad -- growing streaming households -- while putting monetization efforts aside for now.

The company is still doing that, as Anthony Wood, CEO of the company, emphasized during its Q4 earnings conference call: "I would say, internationally, in most markets, except for maybe Canada, we're still focused primarily on scale of streaming households and less so on monetization, but that will come."

This fact has important implications for the company's future. Let's consider three of them. First, there is still massive room for it to grow its presence. While Roku will no longer report streaming households, it plans to continue to increase that number. It will hit the 100 million mark within the next year and a half. Second, an increasing percentage of these households will be in places where monetization efforts are still in their infancy, i.e., outside the U.S. and Canada. Once Roku shifts to monetization in these markets, the company's sales growth should improve, as will its margins.

Why? Roku's platform segment, where it records revenue from advertising and other services, is far more profitable than its devices segment, with revenue from the sale of its namesake streaming devices. Once the focus shifts from scale to monetization, platform revenue will take off. That's the same blueprint Roku followed in the U.S. And there is still massive whitespace. Even in the U.S., the company continues to make headway thanks to initiatives such as Content Row, an artificial intelligence (AI)-powered, personalized recommendation service on its home screen that is seeing success.

Streaming made up just under 43% of TV viewing time in the U.S. in January, a number that is lower in most countries abroad. Thanks to its leadership in this space and network effect, Roku could be one of the biggest winners over the long run as streaming continues to overtake cable and other forms of entertainment. So, despite its post-earnings jump, it is still worth investing in the stock.