Roblox(US:RBLX) HTSC·2025-10-31 08:17Investment Rating - The report maintains a "Buy" rating for Roblox with a target price of $166.94, slightly up from the previous target of $165.33 [5][24]. Core Insights - Roblox's Q3 2025 performance exceeded expectations, with bookings revenue of $1.92 billion, up 70.3% year-over-year, and GAAP revenue of $1.36 billion, up 48% year-over-year [1][5]. - The increase in revenue is attributed to the success of new hit games following the popularity of "Grow a Garden," which has significantly boosted user engagement on the platform [1][4]. - The company has raised its full-year bookings revenue guidance to a midpoint of $6.59 billion, up from the previous guidance of $5.92 billion [1][4]. Summary by Sections Q3 Performance - Daily Active Users (DAU) reached 152 million, a 70.4% year-over-year increase, driven by new hit games like "Steal a Brainrot" [2]. - The platform's peak concurrent users hit a historical high of 45 million in August, with significant growth in the Asia-Pacific and emerging markets [2]. - The number of paying users increased by 87% year-over-year, although the overall DAU revenue per user remained flat due to lower spending in certain regions [2]. Developer Ecosystem - The number of games with over 10 million DAU increased to seven, with five of these games created in the last 12 months [2]. - The growth rate of games outside the top ten has risen from 47% in Q2 to 58% in Q3, indicating a healthy creator ecosystem [2]. Recent Updates and Innovations - Roblox announced an increase in developer revenue share by 8.5%, which is expected to enhance the developer's share of bookings revenue by approximately 2% [3]. - The introduction of "Roblox Moment," a feature for users to create and share short video clips, aims to enhance user engagement and drive traffic within the platform [3]. - Significant advancements in AI tools were showcased, including the ability to generate 4D objects and real-time voice translation, which are expected to improve game development efficiency [3]. Financial Forecast and Valuation - The report projects an increase in bookings revenue for 2025-2027, with estimates raised by 10.5%, 7.7%, and 7.5% to $6.6 billion, $7.74 billion, and $9.01 billion respectively [4][22]. - Operating profit forecasts for 2025-2027 are projected at -$1.28 billion, -$1.18 billion, and -$0.95 billion, reflecting a slight improvement in loss reduction [4][22]. - The valuation is based on a 17x EV/bookings multiple for 2025, which is higher than the average of comparable companies, reflecting Roblox's strong growth potential [24][25].