Roblox Stocks Increase by 13% After Surpassing Predictions and Providing Positive Forecast

Roblox Stocks Increase by 13% After Surpassing Predictions and Providing Positive Forecast

Roblox announced its fiscal fourth-quarter results on Wednesday, exceeding the consensus estimates for both revenue and losses. This news led to a 13% rise in shares during pre-market trading.

Here’s a breakdown of the company’s performance:

  • Losses per share: 52 cents, which is less than the 55 cents analysts predicted, according to LSEG, formerly known as Refinitiv.
  • Revenue (bookings): $1.13 billion, surpassing the expected $1.08 billion, as per LSEG. Revenue is what Roblox refers to as bookings, a term that includes sales recognized during the quarter and deferred revenue.

Roblox, a video game developer, earns revenue from the sale of its virtual currency, Robux. Players use Robux to customize their avatars and purchase other premium features within the game.

Roblox also reported full-year revenue of $3.52 billion, beating the LSEG consensus estimate of $3.41 billion. The company’s full-year loss per share was $1.87, lower than the consensus estimate of $1.91.

Roblox’s quarterly bookings reached $1.1 billion, the highest in the company’s history.

“We enter 2024 with even more confidence in our ability to achieve our long-term goal of attracting over 1 billion daily active users with optimism and civility,” said Roblox CEO David Baszucki in a statement. The company reported an average of 71.5 million daily active users (DAUs) for the quarter, a 22% increase compared to the same period last year.

Roblox’s average DAUs have been growing for the past two quarters, following a period of stalled growth in the second half of fiscal year 2022 and a slight decrease between the first and second fiscal quarters of 2023.

Average bookings per daily active user rose 3% to $15.75, reflecting a trend that Roblox typically sees in its fiscal fourth quarter.

“We’re seeing strength, both internationally and among older players on the platform,” CEO Baszucki told CNBC’s Steve Kovach, highlighting double-digit growth in both the 13-and-up age group and non-U.S. and Canada segments. “These are positive trends because these are large groups,” Baszucki said.

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The number of hours users spent on the platform dropped from 16 million in the third quarter of 2023 to 15.5 million in the fourth quarter. However, this still represents a 21% increase compared to the same period last year.

The company provided guidance for 2024 and the first fiscal quarter. It expects first-quarter bookings to be between $910 million and $940 million and a net loss ranging from $342 million to $347 million. It guided full-year 2024 bookings to be between $4.1 billion and $4.28 billion, higher than the consensus range of $3.4 billion to $4.27 billion, and a net loss of between $1.37 billion and $1.4 billion.

Personnel costs continue to be a burden on the company, although they’ve grown at a slower pace than bookings. Excluding share-based compensation, quarterly personnel costs increased 24% year over year from $160 million to $198 million, with the most significant increases seen in Roblox’s infrastructure and trust and safety teams.

The New York Stock Exchange welcomes executives and guests of Roblox in celebration of its direct listing, March 10, 2021. Image Credit: NYSE

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