Roblox Corp (NYSE:RBLX) stock rallies 13.50% (As on February 6, 11:43:44 AM UTC-4, Source: Google Finance) after the company reported results for the fourth fiscal quarter that beat consensus estimates. Bookings were $2.22 billion compared to $2.05 billion expected by analysts. Roblox’s fourth-quarter bookings increased 63% from a year ago, while the company reported $316 million in net loss for the quarter, a nearly 44% increase from $220 million the year prior. The company reported 144 million average daily active users, or DAUs, for the fourth quarter, up 69% year over year. Analysts expected 138 million DAUs. The company saw strong growth across all regions, with notable increases in the US, Canada, and Asia-Pacific, including Japan and Indonesia.
Meanwhile, Roblox has faced criticism for putting underage users at risk, with multiple lawsuits on behalf of children who were sexually exploited on the gaming platform. The company said that late in the fourth quarter it began a mandatory age check for users looking to access communication features in Australia, New Zealand and the Netherlands. Roblox said 60% of its daily users in those markets had age checked while 45% of global daily users had done so. Roblox said the age-check rollout, which was completed globally in January, has caused “a mid-single-digit headwind to engagement growth and a low-single-digit headwind to bookings growth.” But the company added that “the strategic upside is significant.” Roblox said it has found that the age checking has revealed its user base is younger than indicated by self-reported data. Among daily users, 38% are between the ages of 13 and 17, 35% are under the age of 13 and 27% are over 18. The company said it views its scale with young users as a “valuable strategic asset.”
RBLX in the fourth quarter of FY25 has reported the adjusted loss per share of $0.45, beating the analysts’ estimates for the adjusted loss per share of $0.48, according to the estimates from analysts polled by LSEG. The company faces challenges in maintaining margin expansion due to increased DevX rates and investments in AI workloads and safety marketing. The company is still in the early stages of developing its advertising business, which is not yet a major contributor to the top line.
The company said it expects first-quarter bookings to come in between $1.69 billion and $1.74 billion, which is higher than Wall Street expectations of $1.68 billion.