By Priyanka G

(Reuters) -Roku ( ROKU ) forecast annual revenue above Wall Street estimates and topped fourth-quarter revenue expectations on Thursday, signaling strong advertising sales as more customers switch to streaming platforms, sending its shares up 14% in extended trading.

The surge in political ad spending and the launch of streaming channels like Peacock, Disney+ and HBO Max have boosted Roku's ( ROKU ) subscriber base, ad revenue and overall growth.

"We continue to make progress growing ad demand through deeper third-party platform integrations, improving the Roku Experience (which starts at our Home Screen) to expand monetization, and growing Roku ( ROKU )-billed subscriptions," the company said in a letter to shareholders.

Roku ( ROKU ) has expanded its advertising offerings to small- and medium-sized businesses, leveraging its home screen to diversify revenue streams across sectors.

Brands from retail, automotive and telecom feature their ads on the platform, enhancing visibility and boosting user engagement. This move allows businesses to tap into Roku's ( ROKU ) extensive user base.

The company's platform segment, which derives revenue from ad sales and subscriptions, grew 25% to $1.04 billion due to advertising activities, particularly from the political vertical.

Ahead of the results, Barton Crockett from Rosenblatt said: "Political advertising on connected TV (CTV) stepped up meaningfully this cycle versus the last cycle, in part because of a big push into the medium by Kamala Harris."

The Trump administration has recently imposed tariffs on electronics, particularly those imported from China. In a post-earnings call, Roku ( ROKU ) executives mentioned that while these tariffs could broadly impact the industry, they are not expected to have a material effect on the company's platform business.

The company reported revenue of $1.20 billion in the fourth quarter, compared to the analysts' average estimate of $1.15 billion, according to data compiled by LSEG.   

For the full year, Roku ( ROKU ) expects net revenue of $4.61 billion, compared to analysts' consensus estimate of $4.59 billion.