Roku Inc ( ROKU ) shares are trading higher in Tuesday’s after-hours session after Netflix Inc ( NFLX ) reported better-than-expected financial results for the fourth quarter.

What Happened With Netflix: Netflix ( NFLX ) reported fourth-quarter revenue of $10.25 billion, beating analysts estimates of $10.11 billion. The streaming giant reported quarterly earnings of $4.27 per share, beating analyst estimates of $4.19 per share.

Shares appear to be soaring in response to the company’s strong subscriber growth. Netflix ( NFLX ) said it added 18.91 million paid subscribers in the quarter, bringing its total subscriber count up to 301.63 million.

Netflix ( NFLX ) noted that its advertising plan continues to be quite popular, generating over 55% of sign-ups in the quarter. The company’s ads plan grew nearly 30% on a quarter-over-quarter basis.

“We're on track to reach sufficient scale for ads members in all of our ads countries in 2025. A top priority in 2025 is to improve our offering for advertisers so that we can substantially grow our advertising revenue,” the company said.

NFLX Earnings: Netflix ( NFLX ) Q4 Earnings: Record Subscribers, NFL, ‘Squid Game’ Push Past ‘Highest Expectations’

Why It Matters For ROKU: Roku ( ROKU ) is well-positioned to benefit from strong advertising trends from Netflix ( NFLX ) and other streaming companies.

Roku ( ROKU ) creates revenue opportunities with streaming companies through partnerships and advertising. The company operates an advertising distribution platform, allowing it to capitalize on the growth of streaming. Netflix ( NFLX ) was reportedly considering a takeover of Roku ( ROKU ) a couple of years ago, but a deal never materialized.

Roku ( ROKU ) is due to report its fourth-quarter financial results in early February, although a date has not yet been confirmed by the company. Analysts expect Roku ( ROKU ) to report a loss of 41 cents per share and revenue of $1.15 billion, according to estimates from Benzinga Pro.

ROKU Price Action: Roku ( ROKU ) shares were up 3.71% in after-hours, trading at $82.70 at the time of publication Tuesday, according to Benzinga Pro.