Roblox Rallies After First-Quarter Bookings Top Estimates

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Roblox Corp.’s first quarterly report as a public company was a crowd pleaser, with bookings at the video-game company topping estimates and the shares climbing in late trading.

First-quarter bookings -- primarily the value of virtual currency that users purchase on the company’s platform -- reached $652.3 million. That exceeded Roblox’s prior guidance of $550 million to $575 million. Analysts polled by Bloomberg expected adjusted bookings of $575.8 million.

Roblox also hinted that growth might not suffer as much as expected from the end of Covid-19 lockdowns. Back in March, the company warned that the boom it enjoyed during the pandemic was expected to disappear. Total hours users spent on the gaming platform could drop as much as 11% in the second quarter, Roblox said at the time. But on Monday the company said April daily active users were up 37% year-over-year, with bookings climbing 59% to 61%.

“What we’ve seen is a lot of stickiness in daily active users,” Chief Executive Officer David Baszucki said in a phone interview. “It’s boding really well for the stickiness and the retention of our platform.”

Roblox shares climbed as much as 6.1% to $67.89 in extended trading. They are already up more than 40% since their March debut.

The company, whose games are particularly popular with preteens, provided full-year and first- and second-quarter guidance in March. While the company hasn’t changed its full-year guidance, that doesn’t mean Roblox expects user engagement to drop, Baszucki said.

“We are really optimistic about the second half of the year,” he said.

What Bloomberg Intelligence Says

“Roblox’s numbers look quite strong across the board, including user growth and engagement and they provided some color that April remains strong even amid the specter of increasingly difficult year-ago comparables and reopening risk.”
--Matt Kanterman, analyst

To keep growing, the company is trying to broaden its user base beyond kids, with Roblox targeting office workers and even older adults. It’s also expanding in western Europe and East Asia, and hopes to return to higher rates of growth in 2022, the company said in March. As part of the push, Roblox has been testing new features, such as letting users talk to each other via voice, Baszucki said. There’s no release date set for the voice feature.

Roblox, based on San Mateo, California, doesn’t plan to issue additional quarterly and annual guidance. Instead, it will provide monthly reports on measures such as daily active users, hours of engagement and revenue for the prior month.

Roblox may also use its $1.6 billion hoard of cash as of the end of March for acquisitions, big or small, Baszucki said. The company has also been rapidly growing its staff.

“Anything is possible,” he said. “We don’t want to limit ourselves.”

©2021 Bloomberg L.P.

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