Roblox(RBLX) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Daily active users (DAUs) reached 54 million in Q1 2022, up 28% year-over-year, marking the highest ever [12] - Hours of engagement increased by 22% year-over-year [12] - Bookings were $631 million for Q1 2022, which is 3% below Q1 2021 [12] - The company generated over $150 million in net cash and $100 million in free cash during Q1 [12] Business Line Data and Key Metrics Changes - The 9 to 12 age cohort saw DAUs increase from 2 million pre-COVID to 3 million during COVID, with hours spent per week decreasing from 10 million to 8 million post-COVID [13][14] - The 17 to 24 age cohorts also experienced solid year-on-year DAU growth, with a 6% increase by the end of Q1 [15] Market Data and Key Metrics Changes - India saw a 160% growth in DAUs year-over-year, reaching under 1 million [16] - Japan experienced a 3x growth in DAUs year-over-year, totaling 183,000 [16] Company Strategy and Development Direction - The company is focused on continuous innovation, including features like spatial voice, layered clothing, and an age verification system [17] - Roblox is enhancing its economy by optimizing long-term retention and engagement, including validated accounts and immersive advertising systems [20][22] - The company aims to create a self-service platform that allows brands to build unique experiences, emphasizing scalability and user-generated content [92][93] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about user retention and engagement, particularly in the 9 to 12 age cohort, despite a slight decrease in hours spent post-COVID [15][100] - The company believes that user safety and stability will serve as competitive advantages as user growth continues [48] Other Important Information - The company is migrating to an internal revenue recognition system that reflects increased user retention, moving the average user lifetime from 23 to 25 months [15] - The company has a healthy cash position of $3 billion, allowing for continued investment in growth [60] Q&A Session Summary Question: Impact of innovations on KPIs and launch timelines - Management indicated that custom materials are live and facial animation is in beta, with both expected to have long-term effects rather than immediate KPI impacts [26][28] Question: Historical shape of bookings in Q2 - Management noted that April is typically a strong month, and they expect sequential improvement in bookings through May and June [30] Question: Confidence in monetization and consumer spending - Management emphasized that the focus is on optimizing user experience rather than simply extracting more money from consumers [36][38] Question: User safety spending and its impact on growth - Management views user safety as a competitive advantage and expects it to drive long-term growth [46][48] Question: Updates on product functionality for the 9-12 age cohort - Management discussed ongoing improvements to increase frequency and retention in this demographic [54] Question: Developer fees and their impact on the business - Management confirmed that developer fees increased slightly, but they are focused on investing in the developer community rather than seeking short-term operating leverage [69][70] Question: Engagement metrics and future expectations - Management expects to see continued improvement in engagement metrics as the user base grows and product innovations are rolled out [90][100] Question: Hiring challenges in a competitive market - Management reported that they are ahead of internal hiring plans and continue to attract talent despite competitive pressures [102]