Artisan Partners, an investment management company, released its fourth-quarter 2025 investor letter for “Artisan Mid Cap Fund”.  A copy of the letter can be downloaded here. The Fund seeks to invest in companies that possess franchise characteristics, with strong earnings trajectories, and are trading at a discount to the estimated private market value. US equities ended a record year with robust fourth-quarter gains. The Fund’s Investor Class, ARTMX, delivered -0.44%, the Advisor Class, APDMX, delivered - ...

Financial Data and Key Metrics Changes - In 2025, the company exceeded its guidance with a revenue growth of 36% and bookings growth of 55% year-on-year [4] - Q4 revenue was $1.4 billion, up 43% year-on-year, while Q4 bookings reached $2.2 billion, which is up 63% year-on-year [5][6] - The company reported a significant increase in daily active users (DAUs) by 69% year-on-year, reaching 35 billion engagement hours, an increase of over 88% year-on-year [6] Business Line Data and Key Metrics Changes - The top 1,000 creators earned an average of $1.3 million, up over 50% compared to the previous year [7] - Developer Exchange (DevEx) in Q4 was $477 million, reflecting a 70% year-on-year increase [6] Market Data and Key Metrics Changes - The US and Canada market grew by 41% year-on-year, while APAC saw a remarkable growth of 96% year-on-year, with Japan at 160%, India at 110%, and Indonesia over 700% [6] Company Strategy and Development Direction - The company aims to capture 10% of the $200 billion global gaming content market, currently at about 3.4% [5] - The focus is on expanding genres and targeting older audiences, with the 18+ demographic growing at over 50% and monetizing 40% higher than younger cohorts [9] - The strategy includes vertical integration from cloud to engine to tooling, enhancing user experience across devices [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving over 20% growth in 2026, driven by a healthier platform and the potential of AI to expand beyond gaming [19][20] - The company plans to provide detailed guidance for 2026 and shift to quarterly guidance by 2027 [21] Other Important Information - The company is investing in safety marketing to educate users about online safety measures [23] - The age verification rollout has seen strong adoption, with approximately 60% of DAUs age-checked in initial markets [16] Q&A Session Summary Question: Insights on bookings outlook and content schedules - Management highlighted internal indicators such as content diversity and engagement trends, which support their bookings outlook [28][29] Question: Targeting the 18+ demographic and AI gaming developments - The company is optimistic about the potential of AI to enhance user experiences and expand the definition of gaming [33] Question: Key lessons learned about discovery on the platform - Management emphasized the importance of long-term engagement and health of the platform over short-term gains in discovery optimization [40] Question: Update on gross margins and direct payments - The improvement in gross margins was attributed to better-than-expected bookings growth and a shift towards lower-cost payment platforms [46] Question: Concerns about AI disruption from competitors - Management views AI as an opportunity to expand Roblox's vision beyond gaming, focusing on multiplayer technology and cloud synchronization [48] Question: Age verification rollout and its impact - The rollout has been successful, with age-checking enhancing matchmaking and user engagement [65] Question: Q1 bookings guidance and sequential decline - Management noted that the absence of a new viral hit is expected to result in a sequential decline, but the overall health of the platform remains strong [68]

Core Viewpoint - Roblox Corp (NYSE:RBLX) is experiencing a cautious outlook from Wall Street firms due to declining engagement levels and adjustments in revenue growth expectations, despite its potential for future growth [1][3]. Group 1: Financial Performance and Projections - Piper Sandler has lowered its price target for Roblox Corp from $180 to $125 while maintaining an Overweight rating, citing weaker growth in billings and revenue beyond 2027 [1]. - The firm anticipates Q4 2025 bookings growth of 55-60% year-over-year, reaching approximately $2.11 billion, with daily active users projected at 140 million (up 65%) and EBITDA at $544 million [2]. - JPMorgan has reiterated a Neutral rating with a price target of $100, noting a decline in platform engagement and a drop in peak concurrent users to 23 million from 26 million [3]. Group 2: User Engagement Trends - The decline in peak concurrent users is attributed to slower weekend event activity, while weekday engagement remains strong [4]. - Year-over-year engagement levels have decreased to 71% compared to 74% previously [4]. - Popular games on the platform show mixed performance, with "99 Nights in the Forest" maintaining a steady peak CCU at 6 million, while "Grow a Garden" saw a decline to 433,000 from 464,000 [3][4]. Group 3: Company Overview - Roblox Corp operates an online entertainment platform that allows users to create, share, and play 3D virtual experiences, functioning as a "metaverse" for social connection [5]. - The platform provides tools for developers through Roblox Studio and offers a primarily free-to-play app for accessing content [5].

Roblox Corp. (NYSE:RBLX) is pressing its advantage as one of the fastest-growing platforms in gaming, betting that surging user engagement, viral hits like “Grow a Garden” and stepped-up investment in safety and AI can help it capture 10% of the $180 billion video game market and turn its virtual playground into accelerating real-world cash flows.B. Riley Securities analyst Drew Crum initiated coverage on Roblox with a Buy and a price forecast of $125. Crum said the stock can rise more than 30% from the Dec ...

Core Insights - Sands Capital Select Growth Strategy reported a portfolio return of 6.3% in Q3 2025, underperforming the benchmark's 10.5% gain, driven by strong corporate earnings and AI enthusiasm [1] Company Overview: Roblox Corporation (NYSE:RBLX) - Roblox Corporation is recognized as a leading gaming development and distribution platform, with a notable viral game, "Grow a Garden," achieving over 20 million concurrent users, significantly higher than the average of 1 million for other popular experiences [3] - The company experienced a 48% year-on-year revenue growth in Q3 2025, reaching $1.36 billion, indicating strong market performance [4] - Despite a one-month return of -30.66%, Roblox's shares gained 87.83% over the last 52 weeks, closing at $92.73 with a market capitalization of $65.09 billion on November 26, 2025 [2][4] Market Trends and Performance - The surge in daily active users and total hours on the platform rose by 41%, contributing to a 51% year-over-year acceleration in second-quarter bookings [3] - The shift towards new user-generated content experiences is seen as a healthier trend compared to the past reliance on a few mainstay franchises, showcasing Roblox's strength in global distribution [3] Hedge Fund Interest - As of the end of Q2 2025, 75 hedge fund portfolios held shares of Roblox Corporation, an increase from 68 in the previous quarter, indicating growing interest among institutional investors [4]

Core Insights - Roblox has experienced significant growth, with shares more than doubling year to date, driven by a 41% year-over-year increase in daily users in Q2 [1][2] - The viral success of the game "Grow a Garden" has been a key factor in this growth, achieving over 20 million concurrent players and contributing to a total of 27.4 billion hours spent on the platform, a 58% increase year-over-year [1][3] Growth Strategy - The company is focusing on building a growth flywheel, leveraging artificial intelligence (AI) to automate content creation, which accelerates the release of new experiences [4][6] - A 52% year-over-year increase in developer exchange fees indicates that Roblox is incentivizing quality content creation, which is essential for sustaining growth [4][6] User Engagement - The success of "Grow a Garden" has led to increased user engagement, with over 75% of players also engaging with other experiences on the platform [7] - This heightened engagement resulted in a 51% year-over-year increase in bookings for the last quarter, suggesting that the strategy of releasing viral content is effective and intentional [8]

Core Insights - Roblox Corporation (RBLX) and Take-Two Interactive Software, Inc. (TTWO) represent different strategies in the gaming industry, with Roblox focusing on user-generated content and Take-Two relying on established franchises [1][2] Summary of Roblox (RBLX) - Roblox has shown significant growth, with a 41% year-over-year increase in daily active users (DAUs) to 111.8 million and a 58% rise in engagement hours to 27.4 billion [2][3] - Financially, Roblox's bookings increased by 51% year-over-year to $1.4 billion, with notable growth in the APAC region at 75% [3] - The platform has a record 23.4 million monthly unique payers, up 42% year-over-year, indicating strong monetization potential [3] - Roblox is innovating with AI-driven tools and expanding into various game genres, creating a robust ecosystem for creators [4] - Despite its growth, Roblox reported a loss per share of 41 cents in Q2 2025, highlighting ongoing profitability challenges [5] Summary of Take-Two Interactive (TTWO) - Take-Two started fiscal 2026 strong, with first-quarter net bookings of $1.42 billion, leading to an increased full-year outlook of up to $6.15 billion [6][7] - Key franchises like NBA 2K and Grand Theft Auto continue to drive revenue, with NBA 2K25 selling over 11.5 million units and recurrent spending rising by 48% [8] - Take-Two's release pipeline includes ambitious titles such as Mafia: The Old Country and NBA 2K26, positioning the company for potential record net bookings in fiscal 2027 [9] - The company benefits from a diversified revenue stream through both console and mobile games, enhancing its growth potential [6][8] Market Performance - RBLX stock surged 198.9% over the past year, significantly outperforming the industry growth of 29.3%, while TTWO shares rose 60.2% in the same period [7][16] - RBLX is trading at a forward price-to-sales ratio of 12.42X, above its median of 7.65X, while TTWO's ratio is 5.91X, above its median of 4.71X [19] Comparative Analysis - While Roblox excels in user growth and a unique ecosystem, it faces profitability and volatility challenges [22] - Take-Two's balanced strategy with proven franchises and a strong release slate provides a more stable growth trajectory and visibility [22]

Group 1 - Roblox Corporation (NYSE:RBLX) is included in the Renaissance Technologies Portfolio as one of the 10 biggest stocks [1] - JPMorgan raised the price target for Roblox Corporation to $160 from $150, maintaining an Overweight rating [2] - The increase in engagement on Roblox's platform during Q2 was driven by the game "Grow a Garden," with expectations for continued momentum in Q3 due to upcoming games [2][3] Group 2 - Concurrent users on Roblox reached 43 million in late August, surpassing the previous record of 32 million [3] - JPMorgan anticipates that the strong platform engagement will lead to a 'healthy upside' to management's guidance for Q3 [3] - The stock has gained 130% year-to-date as of September 23, 2025 [4]

Core Insights - Roblox Corporation (RBLX) highlighted the effectiveness of its discovery engine, which significantly contributed to record engagement levels in Q2 2025, with 111.8 million daily active users, a 41% year-over-year increase, and 27.4 billion engagement hours, up 58% from the previous year [1][8] Engagement and Monetization - The discovery system has been crucial for driving cross-experience engagement, with over 75% of players of the viral game "Grow a Garden" engaging with at least one additional Roblox title on the same day, and more than half of the quarter's spending growth coming from experiences outside the top 10 rankings [2] - The company is refining discovery signals to enhance transparency for developers, focusing on maximizing long-term user value and supporting a healthier ecosystem through initiatives like sponsored tiles and the Creator Rewards program [3] Safety and Trust - Roblox is advancing its safety agenda with the rollout of RoGuard 1.0, an open-source toolkit for establishing guardrails around large language models, along with new privacy and screen-time controls, reflecting a commitment to maintaining trust while scaling engagement [4] Market Aspirations - Roblox aims to capture 10% of the $180 billion global gaming content market, positioning its discovery engine as a structural growth lever that extends engagement beyond a few viral titles and enables smaller developers to gain traction [5] Stock Performance and Valuation - Roblox shares have increased by 30.6% over the past three months, outperforming the industry average rise of 12.8%, while other industry players like Boyd Gaming, DraftKings, and Monarch Casino have seen gains of 7%, 2.4%, and 19.7%, respectively [6] - The stock is currently trading at a forward 12-month price-to-sales (P/S) multiple of 12.89X, significantly above the industry average of 3.28X, with competitors like Boyd Gaming, DraftKings, and Monarch Casino having P/S ratios of 1.85X, 3.04X, and 3.33X, respectively [9] Earnings Outlook - The Zacks Consensus Estimate for Roblox's 2025 loss per share has widened from $1.36 to $1.71, indicating increased caution among analysts regarding the company's near-term earnings profile, with projections suggesting an 18.8% decline in 2025 earnings [11]

Group 1: Roblox Performance - Roblox is experiencing significant growth with player counts showing triple-digit year-over-year growth rates, despite August typically being a slow month for the gaming industry [1][2] - The platform is benefiting from several "megascale experiences" that consistently attract millions of players, including titles like "Grow a Garden," "Steal a Brainrot," and "99 Nights in the Forest" [2] - Roblox stock is rated as outperform with a price target of 130, and it rose nearly 2% to 135.18 in midday trades [2] Group 2: Electronic Arts Performance - Electronic Arts (EA) is receiving positive feedback for its upcoming game "Battlefield 6," which is set to release on October 10, and is anticipated to be a major title for the industry [3] - EA's "Madden NFL 26" has also garnered positive feedback since its release on August 14 [4] - EA stock ranks third out of 25 stocks in the Computer Software-Gaming industry group, with an IBD Composite Rating of 77 out of 99, while Roblox ranks fourth with a Composite Rating of 75 [5]