Roblox Reports Wider-than-Expected Q1 Loss but Shares Recover

On May 10, 2023, Roblox reported its first-quarter results, revealing a loss of $0.44 per share, which is $0.09 worse than what analysts had predicted. Despite this news, shares of the company’s stock have since bounced back after the initial drop, with the company seeing an increase of 1% in pre-market trading.

While the loss was disappointing for investors, the company reported that bookings for the quarter rose 23% YoY, coming in at $773.8 million. Additionally, the platform saw an increase in average daily users of 22%, reaching 66.1 million. This growth was accompanied by an increase in hours engaged, which rose 23% YoY to 14.5 billion.

Despite the loss, the company’s CFO, Michael Guthrie, said that the Q1 results show a “strong performance across our core operating and financial metrics.” Guthrie also stated that the company plans to “moderate our rate of investment in headcount and infrastructure, thereby generating operating leverage.”

Roblox, which allows users to create and play games within its platform, has seen significant growth over the past few years, particularly during the pandemic. As more people were forced to stay at home, online gaming and social platforms became increasingly popular, leading to an increase in the number of users on Roblox.

The platform’s average bookings per DAU (“ABPDAU”) remained flat compared to the same period last year, at $11.70. However, the company expects to see more of its bookings processed through credit cards and prepaid cards, which will have a positive impact on margins.

In conclusion, while Roblox’s wider-than-expected Q1 loss may have disappointed some investors, the platform’s growth in users and bookings should give hope for the future. As the company moderates its investment in headcount and infrastructure, it can focus on generating operating leverage, which could lead to more profits in the long term.