The company’s stock price dropped 27.36% in trading to $28.32 a share as a result of Roblox’s lower-than-expected guidance for the second quarter. The company expects bookings in Q2 to be around $885 million, compared to the consensus estimate of $929 million. Additionally, Roblox’s full-year forecast of $4.05 billion in bookings fell short of the expected target of $4.18 billion.
Despite the stock price decline, Roblox saw an increase in daily active users during the first quarter. The platform reached 77.7 million daily active users, a 17% increase from the previous year. This growth in user engagement is a positive sign for the company’s long-term prospects.
However, Roblox did report a net loss of $270.6 million for the quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also showed a loss of $6.9 million. It’s important to note that these figures exclude adjustments for increases in deferred revenue.
It’s worth mentioning that Roblox has been actively working to drive growth and engagement on its platform. The company has been experimenting with changes in its AI-driven discovery algorithm and the positioning of various content types on the homepage. It has also reintroduced platform-wide events like The Hunt: First Edition to attract more users. These efforts have shown positive results since mid-April, according to Roblox’s founder and CEO, David Baszucki.
In terms of financial efficiency, Roblox has reduced certain infrastructure and trust and safety expenditures over the past three quarters. Personnel costs have also been reduced by holding headcount flat. These measures have contributed to record amounts of operating and free cash flow in the first quarter. Michael Guthrie, the Chief Financial Officer of Roblox, highlighted these cost-saving measures as a significant achievement for the company.
Looking ahead, Roblox has provided guidance for the second quarter and full year. For Q2, the company expects revenue between $855 million and $880 million, with bookings ranging from $870 million to $900 million. The consolidated net loss is projected to be between $(267) million and $(265) million. Adjusted EBITDA is expected to be between $36 million and $38 million.
For the full year, Roblox anticipates revenue between $3.45 billion and $3.525 billion, with bookings ranging from $4 billion to $4.1 billion. The consolidated net loss is projected to be between $(1.096) billion and $(1.044) billion. Adjusted EBITDA is expected to be between $95 million and $147 million.
In summary, while Roblox reported strong first-quarter results, its stock price has fallen due to a weak financial outlook. The company’s focus on driving user engagement and improving financial efficiency will be crucial in achieving its growth targets for the rest of the year.
