Roblox Aims For 10% Of Gaming Market As Mobile, Desktop Bookings Grow: Analyst

Core Viewpoint - Roblox Corp reported fiscal fourth-quarter 2024 bookings growth of 21% to $1.36 billion, slightly missing analyst estimates, while adjusted EPS loss was better than expected, leading to a price target increase from $60 to $72 by Needham analyst Bernie McTernan [1][2]. Group 1: Financial Performance - Fiscal fourth-quarter 2024 bookings were $1.36 billion, a 21% increase, but below the $1.37 billion estimate [1]. - Adjusted EPS loss was 33 cents, outperforming the consensus estimate of a 44 cents loss [1]. - First-quarter bookings are expected to be between $1.125 billion and $1.150 billion, slightly above the consensus of $1.14 billion [2]. Group 2: Market Expectations - There was a significant rise in bookings growth expectations, with investors shifting from a 20% CAGR to a 25% or 30% CAGR, although reported deceleration was noted [4]. - The guidance for first-quarter bookings indicates a solid 23% growth, but this is against elevated expectations following a 74% stock increase since the third quarter [5]. Group 3: Growth Drivers - Mobile and desktop bookings grew by 26% in the fourth quarter, with December growth at 27% [6]. - Management aims to capture 10% of the global gaming content market, up from the current 2.4%, which is contingent on technological advancements [6]. - New genres like shooters and sports show potential for growth, although it is still early in their development [7]. Group 4: Margin and EBITDA Estimates - McTernan estimates that a shift of 7% of bookings from mobile/console to desktop is needed to break even on gross margin, with each additional 5% shift contributing a 9% increase to adjusted EBITDA [8]. - Adjusted EBITDA estimates for fiscal 2025E increased by 6%, but estimates for fiscal 2026E and 2027E were lowered by 2% and 7%, respectively, due to reduced operating leverage assumptions [9].