Roblox stock zooms 25%, heads toward best day in 15 months after earnings

Shares of Roblox Corp. were surging toward their best day in 15 months Wednesday after the gaming company topped bookings expectations for the holiday quarter.

While Roblox’s
GAAP revenue of $579 million fell far below the FactSet consensus for $648 million, the company’s bookings came in at $899 million, whereas analysts were projecting $871 million. The company says that the booking metric captured deferred revenue stemming from sales of virtual currency.

“Bookings accelerated meaningfully in December and January, with year-over-year growth exceeding 20% in both months,” Chief Financial Officer Michael Guthrie said in the company’s earnings release. “Growth was strong across all geographies and age groups with particular strength among users above 17 years old.”

Chief Executive David Baszucki added on the earnings call that January bookings among the 17-year-olds to 24-year-olds age group rose 39% from a year before. The company disclosed in its earnings release that overall bookings for January were estimated to have been $267 million to $271 million, which would mark a 19% to 21% increase from a year prior.

Prior to the report, Wedbush analyst Nick McKay wrote that his first-quarter bookings expectations factored in about $250 million in January contributions. “The debate around January is tied to the mystery around the drivers of the December-to-remember,” he wrote Monday.

Shares were up nearly 25% in midday trading Wednesday and were surging toward their largest one-day percentage gain since Nov. 9, 2021, when it soared more than 42%, according to Dow Jones Market Data.

The 65 million daily active users in January marked the company’s “highest ever” performance on the metric, Baszucki shared on the earnings call.

Guthrie, meanwhile, signaled that Roblox was making progress in getting users to pay for the service.

“Payer conversion” was “very, very healthy” in the fourth quarter, he said. “So more users are becoming payers than ever before, and that’s pretty much true across the globe.”

The company posted a fourth-quarter net loss of $290 million, or 48 cents a share, whereas it posted a loss of $144 million, or 25 cents a share, in the year-earlier period. Analysts tracked by FactSet were expecting a 51-cent loss per share.

“We made a lot of investment in human capital over the last few years,” Guthrie said on the earnings call. “This year, we’re slowing down the rate of hiring, but we are still hiring quite a few people.”

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