and Roblox is sharply lower today after reporting third quarter results beat on the top and bottom line but warning that operating margins could decline next year. Joining us in a first on CNBC interview to break down the quarter is Roblox co-founder and CEO David Bazooki. David, thank you so much for joining us.I would love for you to give us a little more context about the operating margin. It does seem like that's what investors and analysts are a little hung up on. Why is that going to decline year-over ...

and Roblox is sharply lower today after reporting third quarter results beat on the top and bottom line but warning that operating margins could decline next year. Joining us in a first on CNBC interview to break down the quarter is Roblox co-founder and CEO David Bazooki. David, thank you so much for joining us.I would love for you to give us a little more context about the operating margin. It does seem like that's what investors and analysts are a little hung up on. Why is that going to decline year-over ...

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Key Points Roblox is growing at an incredible rate, which is likely why the stock has more than doubled in 2025. The company's net losses are getting bigger, causing some investors to rethink their conviction. 10 stocks we like better than Roblox › Shares of video game platform business Roblox Corporation (NYSE: RBLX) were down 10% as of 10 a.m. ET on Thursday after the company reported financial results for the third quarter of 2025. Roblox's management also guided for a bigger loss in the upcomi ...

Core Insights - Roblox reported revenue of $1.92 billion for the quarter ended September 2025, reflecting a year-over-year increase of 70.3% [1] - The earnings per share (EPS) was -$0.37, unchanged from the same quarter last year, while the consensus EPS estimate was -$0.53, resulting in a surprise of +30.19% [1] - The revenue exceeded the Zacks Consensus Estimate of $1.71 billion by +12.48% [1] Financial Metrics - Bookings for the quarter were $1.92 billion, surpassing the average estimate of $1.71 billion from seven analysts [4] - Daily Active Users (DAUs) reached 151.5 million, exceeding the estimated 125.68 million by five analysts [4] - Total Hours Engaged amounted to 39.6 billion, compared to the average estimate of 30.22 billion [4] Regional Performance - DAUs in the Rest of the World (ROW) were 45.2 million, higher than the estimated 34.43 million [4] - DAUs in the Asia-Pacific (APAC) region reached 46.3 million, surpassing the estimate of 40.15 million [4] - DAUs in the US & Canada were 26.1 million, compared to the average estimate of 23.76 million [4] - DAUs in Europe totaled 33.9 million, exceeding the estimated 27.66 million [4] Stock Performance - Roblox shares have returned -0.3% over the past month, while the Zacks S&P 500 composite increased by +3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market [3]

Core Insights - Roblox is focusing on AI and creator tools to enhance its platform, aiming to turn creativity into a core currency despite rising costs [1][11] - The user demographic is shifting, with users aged 13 and older being the fastest-growing segment, influencing monetization strategies and digital experiences [1][9] Financial Performance - In Q3 2025, Roblox's revenue increased by 48% year-over-year to $1.36 billion, while bookings surged by 70% to $1.92 billion, indicating strong user engagement [5][6] - Despite the revenue growth, the company reported a net loss of $257 million for the quarter, highlighting the challenges of sustaining growth [6][10] User Engagement and Demographics - Average daily active users (DAUs) reached 151.5 million, a 91% increase from the previous year, with total hours engaged climbing 70% to nearly 40 billion [5][6] - The fastest-growing user segment is now aged 13 and up, with growth rates of up to 80% year-over-year in certain regions, reshaping monetization models [9][10] Geographic Expansion - Roblox's growth is increasingly global, with the Asia-Pacific (APAC) region and "Rest of World" showing the fastest growth rates in user engagement [7][8] - Engagement metrics in APAC grew at triple-digit percentages, and average bookings per daily active user (ABPDAU) increased across all major geographies [8] Strategic Initiatives - The company is investing in AI as a structural enabler, aiming for "4D creation" where AI assists in building and personalizing experiences [11][12] - Partnerships, such as with Google, are part of Roblox's strategy to integrate machine learning into its user and monetization processes [12][13] Future Projections - For Q4 2025, Roblox projects revenue between $1.35 billion and $1.4 billion, indicating year-over-year growth of 37% to 42%, with bookings potentially reaching $2.05 billion [10] - However, a net loss of up to $375 million is anticipated in Q4 due to increased spending on creator tools and AI infrastructure [11]

Core Insights - Roblox reported a revenue miss in its Q3 earnings announcement, indicating potential challenges in meeting financial expectations [1] - The company achieved an average of 151.5 million daily active users, reflecting a significant 70% year-over-year increase, showcasing strong user engagement and growth potential [1]

TRENDING: You Don't Have To Dig Far To Cash In On Rare Earths Kid-centric online service Roblox (RBLX) on Thursday beat expectations for the third quarter and guided higher than views for the current period. But Roblox stock fell after the report. Based on the midpoint of its guidance, Roblox expects bookings in the fourth quarter of $2.03 billion, vs. the consensus estimate of $1.84 billion. In Q4 last year, it generated bookings of $1.36 billion. "Our third-quarter results demonstrate the tremendous progr ...

Financial Data and Key Metrics Changes - In Q3 2025, revenue reached $1.36 billion, up 48% year-on-year, while bookings were $1.92 billion, up 70% year-on-year [7][8][16] - Daily Active Users (DAUs) hit 151.5 million, representing a 70% increase year-on-year, with significant growth across all regions [5][6] - Engagement hours totaled 39.6 billion, up 91% year-on-year, with notable increases in both U.S. and Canada (47%) and APAC (127%) [7][8] Business Line Data and Key Metrics Changes - The number of experiences with over 10 million DAUs reached 7 million, including five new experiences created in the last 12 months [4][5] - Developer Exchange (DevEx) earnings reached $427.9 million, up 85% year-on-year, and have grown 250% from two years ago [7][8][10] Market Data and Key Metrics Changes - Bookings in APAC increased by 110% year-on-year, with specific highlights including Japan (125%), India (146%), and Indonesia (804%) [7][8] - Monthly unique payers grew to 35.8 million, up 88% year-on-year, indicating strong market penetration [7][8] Company Strategy and Development Direction - The company aims to capture 10% of the global gaming content market, currently at 3.2%, up from 2.3% last year [4] - Investments in technology and infrastructure are focused on genre expansion, including competitive genres like shooters and sports [8][10] - The company is enhancing its discovery system to promote new creators and experiences, ensuring long-term ecosystem health [9][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledges potential short-term friction from new safety policies but believes these will enhance long-term growth [20][21] - The company is optimistic about the adoption of new technologies and their impact on future growth, despite tough comparisons in 2026 [19][39] Other Important Information - The company has launched an IP platform to connect IP holders and creators, enhancing the creator ecosystem [10] - A partnership with the Attorney General's Alliance on child safety has been established, focusing on improving safety measures on the platform [11][12] Q&A Session Summary Question: AI Infrastructure and User Experience - The CEO discussed the potential of AI and GPU investments to enhance user experiences and real-time content generation [24][25] Question: Competition and Creator Economics - The CEO emphasized the importance of overall creator economics beyond just the DevEx rate, highlighting the platform's user base and creative tools [29][30] Question: Age Cohorts and Investment Priorities - Management noted the ability to attract older users through new game genres and emphasized aligning technical roadmaps with market trends [33][34] Question: Bookings Growth Guidance - The CFO clarified that specific guidance for 2026 is premature, citing both potential tailwinds and headwinds affecting growth expectations [39] Question: Advertising as a Growth Strategy - Management acknowledged the potential for advertising but emphasized the importance of organic growth and partnerships with creators for user acquisition [55][56] Question: Developer Growth and Investment Yield - The CEO highlighted the healthy growth of top developers and the expectation of immediate benefits from AI investments [61][62]

Group 1 - Roblox Corporation is recognized as a promising stock, with Roth Capital analyst Eric Handler raising the price target to $146 from $138, citing ongoing platform strength due to advanced game development, improved discovery, and better monetization [1][2] - The collaboration between Roblox Corporation and Mattel Inc. aims to launch a new series of games on the Roblox platform, starting with the title Monster High, which debuted on October 24 [2] - The partnership with Mattel is part of a broader strategy to extend physical play into the virtual realm, with plans for additional standalone games featuring other popular franchises [2] Group 2 - Roblox operates an immersive platform for connection and communication both in the US and internationally, indicating its global reach and potential for growth [3] - While Roblox shows investment potential, there are suggestions that certain AI stocks may offer greater upside potential and lower downside risk [3]