Key Takeaways RBLX slid 38% in three months as a cautious growth outlook and rising costs hurt sentiment.RBLX margins face pressure from higher creator payouts, infrastructure spend and a weaker monetization mix. RBLX's engagement surged, with DAUs up 70% YoY and Q3 bookings jumping to $1.92B.Roblox Corporation (RBLX) has seen a sharp 38% decline over the past three months compared with the industry’s fall of 11.1%. However, in the same time frame, the S&P 500 has gained 3.3%.RBLX stock has fallen largely d ...

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 ...

For the quarter ended September 2025, Roblox (RBLX) reported revenue of $1.92 billion, up 70.3% over the same period last year. EPS came in at -$0.37, compared to -$0.37 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $1.71 billion, representing a surprise of +12.48%. The company delivered an EPS surprise of +30.19%, with the consensus EPS estimate being -$0.53.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Stree ...

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]

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]

Financial Data and Key Metrics Changes - Q3 revenue reached $1.36 billion, up 48% year on year [5] - Q3 bookings were $1.92 billion, up 70% year on year [5] - Daily Active Users (DAUs) hit 151.5 million, a 70% increase year on year [4] - Engagement hours reached 39.6 billion, up 91% year on year [5] - Monthly unique payers increased to 35.8 million, up 88% year on year [5] Business Line Data and Key Metrics Changes - The number of experiences with over 10 million DAUs reached seven, including five new experiences created in the last 12 months [3][4] - Developer Exchange (DevEx) earnings reached $427.9 million, up 85% year on year [5] - DevEx has grown 250% from the same period two years ago [6] Market Data and Key Metrics Changes - Global gaming bookings through Roblox increased from 2.3% to 3.2% year on year [3] - APAC bookings grew by 110% year on year, with specific countries like Indonesia seeing an 804% increase [5] Company Strategy and Development Direction - The company aims to capture 10% of the global gaming content market, focusing on genre expansion and technological innovation [3][6] - Investments in infrastructure and safety are prioritized to support long-term growth and platform resilience [10][20] - The introduction of new technologies, such as AI-based features and enhanced avatar capabilities, is expected to drive future engagement [6][10] 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] - The company is optimistic about sustaining double-digit bookings growth, aided by upcoming technology launches [19][20] - There is a focus on maintaining a healthy balance between creator economics and company profitability [36] Other Important Information - The company has launched an IP platform to connect IP holders and creators more efficiently [9] - Over 100 innovations in safety and civility have been released this year, including stricter age ratings [12] Q&A Session Summary Question: AI and Infrastructure Plans - The company is excited about the potential of AI and GPU infrastructure to enhance user experiences and real-time content generation [24][26] Question: Competition and Creator Economics - The company emphasizes the importance of creator economics and the broader ecosystem, not just the DevEx rate, to attract and retain creators [34][36] Question: Age Cohorts and Investment Priorities - The company has seen strong organic growth and is aligning its technical roadmap with the interests of older age cohorts [38][40] Question: Bookings Growth Expectations - Management refrains from providing specific guidance for 2026 but acknowledges potential headwinds from tough comparisons and new safety policies [46][50] Question: Advertising as a Growth Strategy - The company is exploring paid user acquisition strategies in partnership with creators while maintaining a focus on organic growth [80][83] Question: Developer Growth and Investment Yield - The company reports healthy growth among top developers and anticipates both short-term and long-term returns from AI investments [87][90]

Q3 2025 Results - Revenue reached $1.4 billion, a 48% year-over-year growth[5] - Bookings totaled $1.9 billion, showing a 70% year-over-year increase[5] - Average Daily Active Users (DAUs) were 151.5 million, up 70% year-over-year[5] - Hours Engaged reached 39.6 billion, a significant 91% year-over-year growth[5] - Net loss was $(257) million, a 121% year-over-year growth[7] - Net cash provided by operating activities was $546 million[7] - Free cash flow was $443 million, a 103% year-over-year growth[7] - Adjusted EBITDA was $46 million[7] Q4 and Fiscal Year 2025 Guidance - Q4 2025 revenue is projected between $1.35 billion and $1.4 billion, representing a 37% to 42% year-over-year increase[57] - Q4 2025 bookings are expected to be between $2 billion and $2.05 billion, a 47% to 51% year-over-year increase[57] - Fiscal year 2025 revenue is guided between $4.8255 billion and $4.8755 billion, a 34% to 35% year-over-year increase[58] - Fiscal year 2025 bookings are projected between $6.5662 billion and $6.6162 billion, a 50% to 51% year-over-year increase[58]

Core Viewpoint - Roblox Corporation (NYSE: RBLX) is being initiated with a Sell rating due to its excessive valuation and unclear path to profitability [1] Financial Performance - The company is currently trading at a high multiple, indicating an inflated valuation [1] Profitability Outlook - There is a noted lack of a clear strategy or roadmap for achieving profitability in the near future [1]

Group 1 - Roblox has a massive user base with over 110 million daily active users and 27 billion hours spent on the platform in the last quarter, indicating strong engagement [4][6] - The platform model allows creators to build and monetize their own content, creating strong network effects that attract more players and developers [5] - The company is expanding its audience to older demographics, pursuing international growth, and exploring new monetization streams like immersive advertising and virtual commerce [6] Group 2 - Despite its growth potential, Roblox faces challenges such as ongoing significant losses due to high infrastructure costs and investments in safety and AI tools [7] - The business model prioritizes growth over efficiency, making it difficult to predict when profitability will be achieved [7] - The perception of Roblox as a "great stock" depends on investor confidence in its long-term monetization strategies and individual risk tolerance [8]

Safety Initiatives - Roblox emphasizes the universal desire for child safety on its platform [1] - The company is proactively implementing safety measures, aiming to set an industry standard [2] - Roblox currently prohibits image sharing and filters all text to ensure safety [2] New Technologies & Policies - Roblox will use age estimation technology, including ID or AI-based selfies, to verify the age of all users engaging in communication [3] - The company will use age verification to adjust communication settings, preventing minors from interacting with adults unless they know each other in real life [3]