The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with our condensed consolidated
financial statements and related notes included elsewhere in this Quarterly
Report and with our audited consolidated financial statements included in our
Annual Report for the year ended December 31, 2021, filed on February 18, 2022,
with the SEC.

Overview

We operate in two reportable segments: the platform segment and the player
segment. Platform revenue is generated from the sale of digital advertising and
related services, including our OneView ad platform, content distribution
services (such as subscription and transaction revenue shares, media and
entertainment promotional spending, the sale of Premium Subscriptions, and the
sale of branded channel buttons on remote controls), and licensing arrangements
with service operators and TV brands.

Player revenue is generated primarily from the sale of streaming players and
audio products. We expect to continue to manage the average selling prices
("ASP") of our streaming players to increase our active accounts. We expect that
the trade off from player gross profit or loss to grow active accounts will
result in increased platform revenue and platform gross profit.

COVID-19 and Other Macroeconomic Factors

The COVID-19 pandemic has negatively impacted the global economy, disrupted
global supply chains, and created significant volatility and disruption of
financial markets. The Russian invasion of Ukraine in February 2022 has led to
further economic disruptions. Mounting inflationary cost pressures and
recessionary fears have negatively impacted the global economy. The U.S. Federal
Reserve increased interest rates starting in March 2022 and additional increases
are expected throughout the year.

The ongoing effects of the COVID-19 pandemic and associated economic factors
remain difficult to predict due to numerous uncertainties, including the
severity, duration, and resurgence of the outbreak, new variants and the
contagiousness of these new variants, the effectiveness of health and safety
measures including vaccines, and managing the different pace of return-to-office
in different locations. We continue to monitor the effects of the pandemic and
take appropriate steps to mitigate the impact on our business. Most of our
employees have a hybrid work schedule (consisting of both in-person work and
working from home) in 2022.

Global supply chain disruptions have resulted in shipping delays, increased
shipping costs, component shortages, and increases in component prices. Though
we do not believe that the cost constraints and supply chain issues are
permanent, they may continue to impact us and we expect our player gross margin
to be negative in the near term as we choose to prioritize account acquisition
and insulate consumers from higher costs caused by supply chain disruptions and
inflationary pressures. In addition, some of our TV brand partners have faced
inventory challenges that have negatively impacted their unit sales. Some of our
advertising verticals experienced supply chain disruptions that negatively
impacted their product availability, which, together with inflation and other
macroeconomic factors, have resulted in advertisers in a variety of industries
reducing their overall advertising spend. We believe rising inflation and
recessionary fears also have led to a reduction in consumer discretionary
spending, which has driven a decrease in our player revenue.

We believe that as the COVID-19 pandemic evolves, the direct and indirect
impacts of the pandemic on global macroeconomic conditions, as well as
conditions specific to us, are becoming more difficult to isolate or quantify.
In addition, these direct and indirect factors can make it difficult to isolate
and quantify the portion of our costs that are a direct result of the pandemic
and costs arising from factors that may have been influenced by the pandemic,
such as supply chain constraints, changes in the spending patterns of
advertisers and consumers, rising inflation, and recessionary fears. We expect
these factors and their effects on our operations may persist for a longer
period, even after the COVID-19 pandemic has subsided.

Key Performance Metrics

The key performance metrics we use to evaluate our business, measure our
performance, develop financial forecasts and make strategic decisions are gross
profit, active accounts, streaming hours, and average revenue per user (“ARPU”).

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Gross Profit

We use gross profit as the primary metric to measure the performance of our
business because we have two revenue segments that have different margin
profiles, and we aim to maximize our higher margin platform revenue from our
active accounts as they stream content on our platform. Substantially all of our
gross profit is generated from our platform segment.

Our gross profit was $720.0 million and $665.0 million for the six months ended
June 30, 2022 and 2021, respectively, reflecting an increase of 8%.

Active Accounts

We believe that the number of active accounts is a relevant measure to gauge the
size of our user base. We define active accounts as the number of distinct user
accounts that have streamed content on our platform within the last 30 days of
the period. Users who streamed content from The Roku Channel only on non-Roku
platforms are not included in this metric. The number of active accounts also
does not correspond to the number of unique individuals who actively utilize our
platform, or the number of devices associated with an account. For example, a
single account may be used by more than one individual, such as a family, and
one account may be used on multiple streaming devices.

We had 63.1 million and 55.1 million active accounts as of June 30, 2022 and
2021, respectively, reflecting an increase of 14%.

Hours Streamed

We believe the number of streaming hours on our platform is an effective measure
of user engagement and that the growth in the number of hours of content
streamed across our platform reflects our success in addressing the growing user
demand for TV streaming. We define streaming hours as the aggregate amount of
time streaming devices stream content on our platform in a given period. Hours
streamed from The Roku Channel on non-Roku platforms are not included in this
metric. We report streaming hours on a calendar basis.

We believe that over time, increasing user engagement on our streaming platform
increases our platform monetization because we earn platform revenue from
various forms of user engagement, including advertising, as well as revenue
shares from subscriptions and transactional video on-demand. However, our
revenue from content publishers is not tied to the hours streamed on their
streaming channels, and the number of streaming hours does not correlate to
revenue earned from such content publishers or ARPU on a period-by-period basis.

Furthermore, streaming hours on our platform are measured whenever a Roku player
or a Roku TV is streaming content, whether a viewer is actively watching or not.
For example, if a Roku player is connected to a TV, and the viewer turns off the
TV, steps away, or falls asleep and does not stop or pause the player, then the
particular streaming channel may continue to play content for a period of time
determined by the streaming channel. We believe that this also occurs across a
wide variety of non-Roku streaming devices and other set-top boxes. However,
since the first quarter of 2020, all of our devices include a Roku OS feature
that is designed to identify when content has been continuously streaming on a
channel for an extended period of time without user interaction. This feature
periodically prompts the user to confirm that they are still watching the
selected channel and closes the channel if the user does not respond
affirmatively. Some of our leading channel partners, including Netflix, also
have implemented similar features within their channels. This Roku OS feature
supplements these channel features, and we believe that it benefits us, our
customers, channel partners, and advertisers. This feature has not had and is
not expected to have a material impact on our future financial performance.

We streamed 20.7 billion and 17.4 billion hours during the three months ended
June 30, 2022 and 2021, respectively, reflecting an increase of 19%.

Average Revenue per User

We measure our platform monetization progress with ARPU, which we believe
represents the inherent value of our business. We define ARPU as our platform
revenue for the trailing four quarters divided by the average of the number of
active accounts at the end of the current period and the end of the
corresponding period in the prior year. ARPU measures the rate at which we are
monetizing our active account base and the progress of our platform business.

ARPU was $44.10 as of June 30, 2022 as compared to $36.46 as of June 30, 2021,
reflecting an increase of 21%.

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Components of Results of Operations

Revenue

Platform Revenue

We generate platform revenue from digital advertising sales and related services
including our OneView ad platform, content distribution services (such as
subscription and transaction revenue sharing arrangements, media and
entertainment promotional spending, the sale of Premium Subscriptions, and the
sale of branded channel buttons on remote controls), and licensing arrangements
with service operators and TV brands. Our ad inventory includes video ad
inventory from AVOD content in The Roku Channel, native display ads on our home
screen and screen saver, as well as ad inventory we obtain through our content
distribution agreements with publishers. To supplement supply, we re-sell video
inventory that we purchase from content publishers and, to a lesser extent,
directly sell third-party inventory on a revenue share basis. To date, we have
generated most of our platform revenue in the United States.

Player Revenue

We generate player revenue primarily from the sale of streaming players through
consumer retail distribution channels, including major brick and mortar
retailers, such as Best Buy and Walmart, and online retailers, including Amazon.
We generate most of our player revenue in the United States. In our
international markets, we primarily sell our players through wholesale
distributors which, in turn, re-sell to retailers. We currently distribute our
players in various countries in North America, South America, and Europe.

Player revenue also includes the sale of our audio products, including wireless
speakers, smart soundbars and wireless subwoofers.

Cost of Revenue

Cost of Platform Revenue

Cost of platform revenue primarily consists of costs associated with acquiring
advertising inventory, amortization costs of content, both licensed and
produced, and revenue share with content publishers. Cost of platform revenue
also includes other costs such as payment processing fees, allocated expenses
associated with the delivery of our services that primarily include costs of
third-party cloud services and salaries, benefits, and stock-based compensation
for our customer support and platform operations personnel, and amortization of
acquired developed technology.

Cost of Player Revenue

Cost of player revenue is comprised mostly of manufacturing costs for streaming
players and audio products payable to our third-party contract manufacturers and
technology licenses or royalty fees. Cost of player revenue also includes
inbound and outbound freight, duties and logistics costs, third-party packaging,
inventory provision, and allocated overhead costs related to facilities and
customer support, and salaries, benefits, and stock-based compensation for
operations personnel.

Operating and Other Expenses

Research and Development

Research and development expenses consist primarily of personnel-related costs,
including salaries, benefits, and stock-based compensation for our development
teams as well as outsourced development fees. In addition, research and
development expenses include allocated facilities and overhead costs. We expect
research and development expenses to increase in absolute dollars as we continue
to invest in the development of our platform and player products and services.

Sales and Marketing

Sales and marketing expenses consist primarily of personnel-related costs,
including salaries, benefits, commissions, and stock-based compensation for our
employees engaged in sales and sales support, marketing, communications, data
science and analytics, business development, product management, and partner
support functions. Sales and marketing expenses also include marketing, retail
and merchandising costs, and allocated facilities and overhead expenses. We
expect sales and marketing expenses to increase in absolute dollars in future
periods as we focus on growing active accounts, platform and player revenue, and
expanding our business internationally.

General and Administrative

General and administrative expenses consist primarily of salaries, benefits, and
stock-based compensation for our finance, legal, information technology, human
resources, and other administrative personnel. General and administrative
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expenses also include outside legal, accounting, and other professional service
fees as well as allocated facility expenses. We expect our general and
administrative expenses to increase due to the expansion of our business and
related infrastructure.

Other Income (Expense), Net

For the three and six months ended June 30, 2022, and 2021, other income
(expense), net consists of interest income on cash and cash equivalents, income
recognized related to non-cash consideration associated with the delivery of
services as part of a strategic commercial arrangement, interest expense that
includes interest on our debt and amortization of deferred debt costs, foreign
currency re-measurement, and transaction gains and losses.

Income Tax Expense (Benefit)

Our income tax expense (benefit) consists primarily of income taxes in certain
foreign jurisdictions where we conduct business and income taxes in the United
States. We have a valuation allowance for deferred tax assets, including net
operating losses primarily for U.S. and any jurisdiction where we do not expect
to realize their benefits in the future. We expect to maintain this valuation
allowance for the foreseeable future.

Results of Operations

The following table sets forth selected condensed consolidated statements of
operations data as a percentage of total revenue for each of the periods
indicated.

                                                      Three Months Ended                               Six Months Ended
                                             June 30, 2022           June 30, 2021           June 30, 2022           June 30, 2021
Net Revenue:
Platform                                               88  %                   83  %                   88  %                   82  %
Player                                                 12  %                   17  %                   12  %                   18  %
Total net revenue                                     100  %                  100  %                  100  %                  100  %
Cost of Revenue:
Platform                                               39  %                   29  %                   37  %                   28  %
Player                                                 15  %                   19  %                   14  %                   17  %
Total cost of revenue                                  54  %                   48  %                   52  %                   45  %
Gross Profit (Loss):
Platform                                               49  %                   54  %                   51  %                   54  %
Player                                                 (3) %                   (2) %                   (2) %                    1  %
Total gross profit                                     46  %                   52  %                   48  %                   55  %
Operating Expenses:
Research and development                               25  %                   18  %                   24  %                   18  %
Sales and marketing                                    24  %                   14  %                   22  %                   15  %
General and administrative                             11  %                   10  %                   11  %                   10  %
Total operating expenses                               60  %                   42  %                   57  %                   43  %
Income (Loss) from Operations                         (14) %                   10  %                   (9) %                   12  %
Other Income (Expense), Net:
Interest expense                                        -  %                    -  %                    -  %                    -  %
Other income (expense), net                             -  %                    -  %                    -  %                    -  %
Total other income (expense), net                       -  %                    -  %                    -  %                    -  %
Income (Loss) Before Income Taxes                     (14) %                   10  %                   (9) %                   12  %
Income tax expense (benefit)                            -  %                   (1) %                    -  %                    -  %
Net Income (Loss)                                     (14) %                    9  %                   (9) %                   12  %


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Comparison of Three and Six Months Ended June 30, 2022 and June 30, 2021

Net Revenue

                                      Three Months Ended                                                                      Six Months Ended
                             June 30, 2022           June 30, 2021           Change $           Change %            June 30, 2022           June 30, 2021           Change $           Change %
(in thousands, except percentages)
Platform                   $      673,163          $      532,303          $ 140,860                  26  %       $    1,320,067          $      998,829          $ 321,238                  32  %
Player                             91,243                 112,816            (21,573)                (19) %              178,038                 220,473            (42,435)                (19) %
Total net revenue          $      764,406          $      645,119          $ 119,287                  18  %       $    1,498,105          $    1,219,302          $ 278,803                  23  %


Platform

Platform revenue increased by $140.9 million, or 26%, and $321.2 million, or
32%, during the three and six months ended June 30, 2022 as compared to the
three and six months ended June 30, 2021, respectively, primarily from higher
revenue from advertising and content distribution services, such as media and
entertainment promotional revenue and distribution of Premium Subscriptions
through The Roku Channel. The increase in the variety of content, both licensed
and original productions, have significantly increased the advertising
opportunities available on the platform.

Player

Player revenue decreased by $21.6 million, or 19%, during the three months ended
June 30, 2022 as compared to the three months ended June 30, 2021, primarily due
to a decrease in both the volume of streaming players sold and the average
selling prices. The volume of streaming players sold decreased by 16% and the
average selling price of players decreased by 5% mainly due to the slowdown in
growth in the three months ended June 30, 2022 as compared to the three months
ended June 30, 2021 driven by reductions in consumer discretionary spending,
which we believe is a result of rising inflation and recessionary fears. Revenue
from the sale of audio products and accessories was also impacted by the same
factors resulting in lower revenue during the period.

Player revenue decreased by $42.4 million, or 19%, during the six months ended
June 30, 2022 as compared to the six months ended June 30, 2021, primarily due
to a decrease in both the volume of streaming players sold and the average
selling prices. The volume of streaming players sold decreased by 14% and the
average selling price of players decreased by 7% mainly due to the slowdown in
growth in the six months ended June 30, 2022 as compared to the six months ended
June 30, 2021 driven by reductions in consumer discretionary spending, which we
believe is a result of rising inflation and recessionary fears. Revenue from the
sale of audio products and accessories was also impacted by the same factors
resulting in lower revenue during the period.

Cost of Revenue and Gross Profit

                                      Three Months Ended                                                                      Six Months Ended
                             June 30, 2022           June 30, 2021           Change $           Change %            June 30, 2022           June 30, 2021           Change $           Change %
(in thousands, except
percentages)
Cost of Revenue:
Platform                   $      296,054          $      187,328          $ 108,726                  58  %       $      563,039          $      341,918          $ 221,121                  65  %
Player                            113,203                 119,525             (6,322)                 (5) %              215,110                 212,347              2,763                   1  %

Total cost of revenue $ 409,257 $ 306,853 $ 102,404

                  33  %       $      778,149          $      554,265          $ 223,884                  40  %
Gross Profit (Loss):
Platform                   $      377,109          $      344,975          $  32,134                   9  %       $      757,028          $      656,911          $ 100,117                  15  %
Player                            (21,960)                 (6,709)           (15,251)                227  %              (37,072)                  8,126            (45,198)               (556) %
Total gross profit         $      355,149          $      338,266          $  16,883                   5  %       $      719,956          $      665,037          $  54,919                   8  %


Platform

The cost of platform revenue increased by $108.7 million, or 58%, during the
three months ended June 30, 2022 as compared to the three months ended June 30,
2021. This increase is primarily driven by higher cost of acquiring content
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that includes content amortization costs, Premium Subscription costs, content
publisher revenue share and credit card processing fees, and higher cost of
acquiring advertising inventory totaling $89.3 million. Platform costs also
increased an additional $19.6 million due to increases in cloud services costs
for supporting the platform and higher personnel costs.

The cost of platform revenue increased by $221.1 million, or 65%, during the six
months ended June 30, 2022 as compared to the six months ended June 30, 2021.
This increase is primarily driven by higher cost of acquiring content that
includes content amortization costs, Premium Subscription costs, content
publisher revenue share and credit card processing fees, and higher cost of
acquiring advertising inventory totaling $184.8 million. Platform costs also
increased an additional $36.0 million due to increases in cloud services costs
for supporting the platform and higher personnel costs.

Gross profit for platform revenue increased by $32.1 million, or 9%, and
$100.1 million, or 15%, during the three and six months ended June 30, 2022 as
compared to the three and six months ended June 30, 2021, primarily driven by
the overall growth in our platform revenue.

Player

The cost of player revenue decreased by $6.3 million, or 5%, during the three
months ended June 30, 2022 as compared to the three months ended June 30, 2021.
The decrease is driven by lower manufacturing costs and lower freight costs of
$4.9 million due to lower player revenue and a lower number of units sold during
the period and lower inventory provision of $1.6 million during this period.

The cost of player revenue increased by $2.8 million, or 1%, during the six
months ended June 30, 2022 as compared to the six months ended June 30, 2021.
The increase is driven by higher inventory provision of $3.4 million offset by
lower manufacturing costs and lower freight costs of $1.4 million due to lower
player revenue and a lower number of units sold during the period.

Gross profit for player revenue decreased by $15.3 million and $45.2 million,
during the three and six months ended June 30, 2022 as compared to the three and
six months ended June 30, 2021, resulting in a gross loss for the three and six
months ended June 30, 2022. The loss was mainly driven by reduced player revenue
during the period.

Operating Expenses

                                         Three Months Ended                                                                      Six Months Ended
                                June 30, 2022           June 30, 2021           Change $           Change %            June 30, 2022           June 30,
2021           Change $           Change %
(in thousands, except
percentages)
Research and development      $      196,637          $      113,276          $  83,361                  74  %       $      360,635          $      214,857          $ 145,778                  68  %
Sales and marketing                  184,971                  93,678             91,293                  97  %              331,493                 182,551            148,942                  82  %
General and administrative            84,054                  62,228             21,826                  35  %              161,831                 122,739             39,092                  32  %
Total operating expenses      $      465,662          $      269,182          $ 196,480                  73  %       $      853,959          $      520,147          $ 333,812                  64  %


Research and development

Research and development expenses increased by $83.4 million, or 74%, during the
three months ended June 30, 2022 as compared to the three months ended June 30,
2021. The increase is primarily due to increases in personnel-related costs of
$67.6 million, as a result of increased engineering headcount and related
stock-based compensation, higher facilities and information technology costs of
$14.3 million from expansion of office facilities, computer equipment, and
infrastructure to support growth and higher headcount, and higher consulting,
professional services, and cloud services costs of $1.6 million.

Research and development expenses increased by $145.8 million, or 68%, during
the six months ended June 30, 2022 as compared to the six months ended June 30,
2021. The increase is primarily due to increases in personnel-related costs of
$114.0 million, as a result of increased engineering headcount and related
stock-based compensation, higher facilities and information technology costs of
$26.6 million from expansion of office facilities, computer equipment, and
infrastructure to support growth and higher headcount, and higher consulting,
professional services, and cloud services costs of $5.5 million.

Sales and marketing

Sales and marketing expenses increased by $91.3 million, or 97%, during the
three months ended June 30, 2022 as compared to the three months ended June 30,
2021
. The increase is primarily due to increases in personnel-related costs of

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$44.7 million related to increased headcount and related stock-based
compensation in sales and sales support, product management, marketing, and
business analytics to support efforts to grow our business. Sales and marketing
expenses also include an increase of $33.8 million mainly due to increases in
marketing, retail and merchandising costs, and other advertising expenses to
promote the Roku brand, an increase of $3.6 million in professional services and
consulting fees, and an increase in facilities and information technology costs
of $6.6 million to support expansion of office facilities and higher headcount.

Sales and marketing expenses increased by $148.9 million, or 82%, during the six
months ended June 30, 2022 as compared to the six months ended June 30, 2021.
The increase is primarily due to increases in personnel-related costs of $84.2
million related to increased headcount and related stock-based compensation in
sales and sales support, product management, marketing, and business analytics
to support efforts to grow our business. Sales and marketing expenses also
include an increase of $43.2 million mainly due to increases in marketing,
retail and merchandising costs, and other advertising expenses to promote the
Roku brand, an increase of $6.9 million in professional services and consulting
fees, and an increase in facilities and information technology costs of $11.0
million to support expansion of office facilities and higher headcount.

General and administrative

General and administrative expenses increased by $21.8 million, or 35%, during
the three months ended June 30, 2022 as compared to the three months ended June
30, 2021. The increase is primarily due to increases in personnel-related costs
of $21.6 million related to increased headcount and related stock-based
compensation, and an increase in facilities and information technology costs of
$4.4 million to support expansion of office facilities and higher headcount.

General and administrative expenses increased by $39.1 million, or 32%, during
the six months ended June 30, 2022 as compared to the six months ended June 30,
2021. The increase is primarily due to increases in personnel-related costs of
$33.9 million related to increased headcount and related stock-based
compensation and an increase in facilities and information technology costs of
$8.3 million to support expansion of office facilities and higher headcount.

Other Income (Expense), Net

                                      Three Months Ended                                                                    Six Months Ended
                                                       June 30,
                                June 30, 2022            2021             Change $            Change %            June 30, 2022           June 30, 2021           Change $            Change %
(in thousands, except
percentages)
Interest expense              $    (1,059)            $   (746)         $    (313)                  42  %       $       (2,116)         $       (1,488)         $    (628)                  42  %
Other income (expense), net         1,829                1,520                309                   20  %                2,238                   1,961                277                   14  %
Total other income (expense),
net                           $       770             $    774          $      (4)                  (1) %       $          122          $          473          $    (351)                 (74) %


Total other income (expense), net, decreased 1%, during the three months ended
June 30, 2022 as compared to the three months ended June 30, 2021. The reduction
was due to increased interest expense of $0.3 million due to higher interest
rates on the outstanding debt, foreign exchange losses of $1.5 million, and
lower other income of $0.6 million, offset by higher interest income of $2.4
million from improved interest rates on our cash balance.

Total other income (expense), net, decreased by $0.4 million, or 74%, during the
six months ended June 30, 2022 as compared to the six months ended June 30,
2021. The reduction was due to increased interest expense of $0.6 million due to
higher interest rates on the outstanding debt, foreign exchange losses of $2.2
million, and lower other income of $0.3 million, offset by higher interest
income of $2.8 million from improved interest rates on our cash balance.

Income Tax Expense (Benefit)

                                       Three Months Ended                                                                      Six Months Ended
                              June 30, 2022           June 30, 2021          Change $            Change %            June 30, 2022           June 30, 2021          Change $            Change %
(in thousands, except
percentages)
Income tax expense
(benefit)                   $        2,578          $       (3,609)         $  6,187                 (171) %       $        4,746          $       (4,400)         $  9,146                 (208) %


Income tax expense increased by $6.2 million and $9.1 million during the three
and six months ended June 30, 2022 as compared to the three and six months ended
June 30, 2021, driven primarily by U.S. federal and state tax liability as a
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result of the adoption of new U.S. tax legislation from the Tax Cuts and Jobs
Act, effective January 1, 2022, reduced stock-based compensation excess tax
benefits, and increased income in foreign jurisdictions.

Liquidity and Capital Resources

As of June 30, 2022, we had cash and cash equivalents of $2,050.4 million. Less
than 1% of our cash was held outside the United States in accounts held by our
foreign subsidiaries, which are used to fund foreign operations.

Our primary sources of cash are receipts from platform and player revenue and
proceeds from equity sales, including equity issued pursuant to our employee
equity incentive plans. The primary uses of cash are costs of revenue, including
costs to acquire advertising inventory, costs to acquire content through
licensing and producing, third-party manufacturing costs, as well as operating
expenses including payroll-related expenses, consulting and professional service
fees, and facility and marketing expenses. Other uses of cash include purchases
of property and equipment and mergers and acquisitions.

As our business and workforce continue to expand, we expect to continue to incur
expenses for facility and building related costs for our office locations in the
United States and internationally. In addition, we expect to continue our
investments in purchases of computer systems and other property and equipment.
We have pursued merger and acquisition activities, such as the acquisition of
the Nielsen AVA business, the This Old House business, and content rights from
Quibi in fiscal year 2021, and we may pursue additional merger and acquisition
activities in the future. These activities can materially impact our liquidity
and capital resources.

We believe our existing cash and cash equivalents balance, cash flow from
operations, and our undrawn available balance under our Credit Agreement will be
sufficient to meet our working capital, capital expenditures, and material cash
requirements from known contractual obligations for the next twelve months and
beyond. Our future capital requirements, the adequacy of available funds, and
cash flows from operations could be affected by various risks and uncertainties,
including, but not limited to, those detailed in Part II, Item 1A, Risk Factors,
the effects of the COVID-19 pandemic and the increasing risk of a recession as
well as other macroeconomic headwinds. While those factors have not severely
impacted our liquidity and capital resources to date, they have contributed to
disruption and volatility in local economies and in capital and credit markets,
which could adversely affect our liquidity and capital resources in the future.

We may attempt to raise additional capital through the sale of equity securities
or other financing arrangements. If we raise additional funds by issuing equity,
the ownership of our existing stockholders will be diluted. Our Credit Agreement
expires in February 2023. If we raise additional financing by the incurrence of
additional indebtedness, we may be subject to fixed payment obligations and also
to restrictive covenants.

Senior Secured Term Loan A and Revolving Credit Facilities

On February 19, 2019, we entered into a Credit Agreement with Morgan Stanley
Senior Funding, Inc. (as amended on May 3, 2019, the "Credit Agreement"), which
provides for (i) a four-year revolving credit facility in the aggregate
principal amount of up to $100.0 million (the "Revolving Credit Facility"), (ii)
a four-year delayed draw term loan A facility in the aggregate principal amount
of up to $100.0 million (the "Term Loan A Facility"), and (iii) an uncommitted
incremental facility subject to certain conditions (together with the Revolving
Credit Facility and the Term Loan A Facility, collectively, the "Credit
Facility").

For our current borrowings, we have elected a Eurodollar borrowing with interest
at a rate equal to the adjusted one-month LIBOR rate plus an applicable margin
of 1.75% based on our secured leverage ratio. The borrowings under the facility
mature or have to be repaid in full by February 2023. Our obligations under the
Credit Agreement are secured by substantially all of our assets. The Credit
Agreement contains customary representations and warranties, customary
affirmative and negative covenants, a financial covenant that is tested
quarterly and requires us to maintain a certain adjusted quick ratio of at least
1.00 to 1.00, and customary events of default. As of June 30, 2022, we were in
compliance with all of the covenants of the Credit Agreement. See Note 11 to the
condensed consolidated financial statements in Item 1 of this Quarterly Report
and Note 10 to the consolidated financial statements in our Annual Report for
additional details regarding the Credit Agreement.

We had outstanding letters of credit of $38.0 million as of June 30, 2022 and
December 31, 2021, against the Revolving Credit Facility.

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