Roblox (RBLX, Financial), a video game platform, reported third-quarter bookings of $1.1 billion, exceeding analysts' expectations and reflecting a 34% year-over-year increase. This growth is attributed to a continuous rise in user numbers and engagement times, prompting the company to revise its 2024 booking forecast upward.
The financial results revealed that Roblox generated $919 million in revenue for the third quarter, a significant increase from $713 million in the same period last year. The company anticipates fourth-quarter revenue of $935 million to $960 million, though analysts predict a higher figure of $1.33 billion. The quarterly per-share diluted loss narrowed to $0.37, outperforming the expected loss of $0.38.
For 2024, Roblox has adjusted its revenue projection to a range of $3.55 billion to $3.57 billion, surpassing the earlier estimate of $3.49 billion to $3.54 billion. Analysts, however, foresee a more optimistic figure of $4.22 billion. The company has increased its full-year 2024 booking forecast to $4.34 billion to $4.37 billion, up from the previous $4.18 billion to $4.23 billion.
Despite the challenges in the video game industry due to rising development costs, platforms like Roblox continue to draw players. User engagement on Roblox has surged, with daily active users (DAU) reaching a record 88.9 million in the quarter ending September 30, marking a two-year high growth rate of 27%. CEO Dave Baszucki aims to attract a billion daily users.
Michael Guthrie, the departing CFO, attributed the DAU growth to improvements in the company's search and discovery algorithms and frequent updates from top developers. Enhanced game quality has led users to spend more time on the platform. Guthrie highlighted that Roblox is better equipped to match users with engaging and relevant content, thanks to its growing creator community.
Roblox recently faced scrutiny after a report from Hindenburg Research accused the platform of inflating user engagement metrics and falling short on safeguarding against child exploitation. The company has "categorically denied" these accusations and emphasized its commitment to user safety. In response to safety concerns, Roblox plans to implement policy changes in November, enhancing protections for users under 13 years old.
Roblox's stock price surged approximately 18.42% in pre-market trading, reaching $51.13 per share.
