David Baszucki, the Founder and CEO of Roblox Corporation.
Image by Steve Jennings | Getty Images
Roblox, the popular gaming platform, experienced a 10% drop in premarket trading on Wednesday following the release of its second-quarter financial results. Unfortunately, the company’s performance fell short of analysts’ expectations both in terms of revenue and profit.
Let’s take a closer look at the details:
- Earnings per share (EPS): The company reported a loss of 46 cents per share, missing the estimated loss of 45 cents per share based on a Refinitiv survey of analysts.
- Revenue (bookings): Roblox generated $781 million in bookings, slightly lower than the expected $785 million according to Refinitiv.
The revenue figure mentioned here represents what Roblox refers to as “bookings.” This category includes both sales recognized during the quarter and deferred revenue. On a year-over-year basis, bookings increased by 22%, reaching $639.9 million in the corresponding quarter of the previous year. Roblox earns revenue through the sale of its virtual currency called Robux, which players use to customize their avatars and purchase additional in-game features.
In terms of user engagement, Roblox reported a 25% increase in average daily active users compared to the previous year, with users spending over 14 billion hours on the platform during the quarter, a 24% year-over-year increase.
While Roblox has traditionally been popular among younger children, the company has been actively working to expand its user base across all age groups. In June, they announced that eligible creators can now develop experiences involving mature content, catering to users aged 17 and older, which broadens their target audience.
Roblox’s letter to shareholders highlighted their growth in daily active users across all age groups and geographical regions.
On the financial side, the company reported a net loss of $282.8 million for the quarter ending June 30, compared to a net loss of $176.4 million during the same period in 2022. The increased losses can be attributed to the higher expenses necessary to support their business growth, including corporate overhead, developer exchange fees, infrastructure, and personnel costs.
Looking ahead, Roblox anticipates continued losses in the foreseeable future.
The average bookings per daily active user decreased by 3% compared to the previous year, amounting to $11.92.
Roblox will hold its quarterly call with investors at 8:30 a.m. ET.
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