Roblox Corporation reported daily active user data that fell short of analyst estimates tracked by Bloomberg, raising concerns over the platform's growth trajectory and sending shares crashing in premarket trading.
The number of daily active users on Roblox increased to 85.3 million in the fourth quarter, missing the Bloomberg Consensus estimate of 88.39 million. Bookings during the quarter slightly missed $1.36 billion versus the $1.37 billion estimate.
Here's a snapshot of the fourth quarter earnings (courtesy of Bloomberg):
Daily active users 85.3 million, estimate 88.39 million (Bloomberg Consensus)
Hours engaged 73.5 billion, estimate 19.42 billion
Bookings $1.36 billion, estimate $1.37 billion
Revenue $988.2 million, estimate $967.2 million
Loss per share 33c
Free cash flow $120.6 million, estimate $120.8 million
Cash and cash equivalents $711.7 million, estimate $672.3 million
Roblox provided a lackluster outlook for the first quarter and full year, as growth in the online video game platform appears to be slowing. Meanwhile, the video game industry has been in a downturn.
First quarter forecast:
Sees bookings $1.13 billion to $1.15 billion, estimate $1.1 billion
Sees revenue $990 million to $1.02 billion, estimate $981.3 million
Sees consolidated net loss $267 million to $287 million, estimate loss $271.2 million
Full-year forecast:
Sees bookings $5.20 billion to $5.30 billion, estimate $5.1 billion
Sees revenue $4.25 billion to $4.35 billion, estimate $4.36 billion
Sees consolidated net loss $995 million to $1.07 billion, estimate loss $972.3 million
Sees adjusted Ebitda $190 million to $265 million, estimate $1.03 billion
Roblox shares in New York crashed 18% in premarket trading.
Outgoing CFO Michael Guthrie told Reuters that Roblox's outlook suggests a third consecutive year of 20% booking growth, even as competitor platforms experience slowdowns.
"We're growing at a substantial premium to the overall gaming market. Right now, gaming is barely growing as a category," Guthrie said.
Guthrie attributed the weaker growth to very tough year-over-year comparisons, noting that Roblox's launch on Sony's PlayStation consoles in 2023 sent new sign-ups higher. He added that the platform's suspension in Turkey over safety and child protection concerns hampered growth.
Short sellers have made claims the platform aimed at kids hasn't done enough to protect millions of users from child predators.
Meanwhile, a note from research firm Newzoo showed that the US video game industry is in slug mode, having only grown by 2.1% in 2024.
Last month, video gaming analyst Matthew Ball of Epyllion pointed out how the gaming industry has been in a multi-year slump pressuring developers and publishers, but new "hopes" center around Rockstar Games' guaranteed mega-hit Grand Theft Auto 6 release this fall that "could re-establish packed video game prices after decades of deflation despite rampant cost growth."
