TLDR:
- Roblox Q3 bookings grew 34% to $1.13B, beating analyst estimates
- Daily active users increased 27% to 88.9M
- Company raised full-year bookings forecast to $4.34B-$4.37B
- Stock rose 12% in premarket trading following results
- Recent Hindenburg Research allegations about inflated user metrics were dismissed by CFO
Roblox Corporation (RBLX) reported stronger-than-expected third-quarter results today, with bookings growing 34% to $1.13 billion, surpassing analyst estimates of $1.01 billion. The company’s shares responded positively, jumping 12% in premarket trading.
The gaming platform saw its daily active users reach 88.9 million in the third quarter, marking a 27% increase from the previous year. Users spent a total of 20.7 billion hours on the platform during the quarter, demonstrating robust engagement levels.
The company’s adjusted EBITDA, including deferred revenue effects, reached $223.4 million, well above analyst predictions of $141 million. This performance prompted Roblox to raise its fourth-quarter bookings forecast to between $1.34 billion and $1.36 billion.
For the full year 2024, Roblox has increased its bookings forecast range to $4.34 billion to $4.37 billion, up from its previous projection of $4.18 billion to $4.23 billion. This adjustment reflects growing confidence in the platform’s performance.
Chief Financial Officer Mike Guthrie attributed the strong results to several platform improvements implemented over the past six months, particularly in search and discovery algorithms. These changes have helped users find content more relevant to their interests.
The company’s growth was also supported by an expansion in game offerings and more frequent updates to existing games. Guthrie noted that more new experiences are breaking into the top 100 games on the platform, with established developers providing more regular content updates.
The gaming platform’s addition to Sony PlayStation consoles has proven successful, though Guthrie indicated that the impact peaked in the third quarter. Excluding the PlayStation effect, bookings still showed a robust 28% increase.
Despite posting these strong results, Roblox reported a net loss of $239.3 million, or 37 cents per share, for the third quarter. However, this loss was slightly better than Wall Street expectations of a 38-cent per share loss.
The company recently faced allegations from short-seller Hindenburg Research regarding its user metrics and safety measures. Guthrie directly addressed these claims, explaining that the company is transparent about how it counts daily active users, including multiple accounts from single players.
Roblox’s spending on infrastructure, trust, and safety increased by 4% year-over-year in the quarter, following four quarters of decline. The company is focusing on “intelligent investing,” including the use of AI for problem-solving and human moderation for more complex issues.
The platform’s strategy to attract older users appears to be gaining traction, with improvements in content discovery and more mature games being added to the platform. This initiative aims to expand Roblox’s user base beyond its traditional younger audience.
Guthrie, who previously announced his planned departure as CFO, indicated that the company is taking a measured approach to finding his replacement. He mentioned that the announcement was made to encourage more candidates to express interest in the position.
The gaming platform’s free-to-play model continues to drive substantial in-game spending, even amid broader gaming industry slowdowns. The company maintains its focus on user-generated content while expanding its appeal to different age groups.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
