- Revenue: $893.5 million, a 31% year-on-year gain.
- Bookings: $955 million, a 22% year-on-year increase.
- Daily Active Users (DAUs): 79.5 million, a 21% year-on-year increase.
- Net Loss: $207 million, better than the guidance of $267 million to $265 million.
- Net Cash Flow from Operations: $151 million, up 433% year-on-year.
- Free Cash Flow: $112 million, compared to negative $95.5 million a year ago.
- Cost to Serve per 1,000 Hours: $9.61, a 25% reduction from $12.75 last year.
- Personnel Costs as a Percentage of Bookings: Reduced from 26% to 21% year-on-year.
- Q3 Revenue Guidance: $860 million to $885 million, a 21% to 24% year-on-year growth.
- Q3 Bookings Guidance: $1 billion to $1.025 billion, a 19% to 22% year-on-year growth.
- Q3 Net Loss Guidance: $275 million to $255 million.
- Q3 Adjusted EBITDA Guidance: $22 million to $42 million.
- Q3 Operating Cash Flow Guidance: $147 million to $162 million, a 37% year-on-year increase.
- Q3 Free Cash Flow Guidance: $105 million to $120 million, an 89% year-on-year increase.
- Full Year Revenue Guidance: $3.49 billion to $3.54 billion, a 25% to 26% year-on-year growth.
- Full Year Bookings Guidance: $4.18 billion to $4.23 billion, a 19% to 20% year-on-year growth.
- Full Year Net Loss Guidance: $1.089 billion to $1.049 billion.
- Full Year Adjusted EBITDA Guidance: $92 million to $132 million.
- Full Year Operating Cash Flow Guidance: $685 million to $715 million, a 53% year-on-year growth.
- Full Year Free Cash Flow Guidance: $505 million to $535 million, a 319% year-on-year increase.
Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Roblox Corp (RBLX, Financial) reported a 31% year-on-year revenue increase, reaching $893.5 million, surpassing their guidance range.
- The company achieved a record number of Daily Active Users (DAUs) at 79.5 million, with a 21% year-on-year growth.
- Roblox Corp (RBLX) saw significant growth in international markets, with Japan and India DAUs growing 56% and 57% year-on-year, respectively.
- The company reported a substantial improvement in free cash flow, reaching $112 million in Q2, compared to a negative $95.5 million a year ago.
- Roblox Corp (RBLX) has successfully implemented AI-driven efficiencies in their safety and moderation platform, reducing infra and trust and safety expenditures by 8% year-on-year.
Negative Points
- Roblox Corp (RBLX) reported a consolidated net loss of $207 million, although this was better than their guidance of $267 million to $265 million.
- The company experienced a flat year-on-year personnel expense, partly due to the consolidation of employees to their San Mateo office, which some employees could not make.
- Despite improvements, the company still faces challenges in optimizing their economy and search and discovery features.
- The CFO, Mike Guthrie, announced his departure, which could lead to transitional uncertainties.
- The company acknowledged that they had to implement measures to offset unseasonable growth rates seen in Q1, indicating potential volatility in their growth trajectory.
Q & A Highlights
Q: Can you address the source or sources of the upgrade in bookings guidance for the second half and the confidence in achieving the updated range?
A: The major changes we implemented three months ago have shown positive impacts, with improvements in user growth, engagement, and bookings growth. Given the strong exit rate of bookings in Q2 and the beginning of Q3, we felt comfortable raising the full-year guidance. The health of the platform has never been better.
Q: How do the recent US Senate bills aimed at protecting children online impact the Roblox platform?
A: We support legislation that ensures safety and privacy. We were the first sponsor of the California age-appropriate design code and had already implemented much of what was in that code. We continue to monitor and support legislation that aligns with our foundational principles of safety and privacy.
Q: Can you expand on the progress made in commerce and ad initiatives this quarter and the longer-term opportunities?
A: We have three main areas: traffic-type ad units on our platform, video ads for brands, and portals that bring traffic to experiences. We've seen growth in these areas, including FIFA using sponsored tiles to boost their property. We are also integrating real-world shopping and improving measurement capabilities for brands.
Q: What are the takeaways from running live ops events, and what can you share about the latest event's engagement?
A: Live ops events drive DAUs and engagement, bringing back users and increasing content visibility. Events like The Classic and The Games have shown positive impacts on user engagement and content discovery. Our UGC platform allows for diverse and engaging events.
Q: What are you looking for in the new CFO candidate given the company's growth?
A: We are looking for another amazing CFO to continue the strong leadership and growth trajectory that Mike Guthrie has established.
Q: What drove the strong user growth in North America, and where do you see the penetration curve in the US and Canada?
A: The growth validates our focus on performance, quality, and ecosystem health. There's significant headroom for Roblox to become an everyday product, especially among users over 25. We continue to see benefits from improvements in our economy and content discovery.
Q: How has the experience of recent platform improvements influenced your views on pushing through similar changes in the future?
A: We have a balanced approach to risk. Recent improvements in performance, quality, and economy have validated our strategy. We will continue to focus on these areas while also pursuing visionary projects.
Q: What is the low-hanging fruit for growing ad revenue in the next one to three years, and what are the longer-term opportunities?
A: We focus on strategic opportunities rather than low-hanging fruit. We aim to build closed-loop systems for brand awareness, digital shopping, and physical shopping. Our approach is to pursue big-picture initiatives that drive long-term growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
