Investing.com -- Roblox Corp. (NYSE: RBLX) shares plummeted 20% after the gaming platform operator sharply reduced its full-year bookings guidance, citing headwinds from its age-verification rollout that restricted user communication and slowed new user acquisition.

The company reported first quarter bookings of $1.7 billion, slightly below the analyst estimate of $1.74 billion, while revenue of $1.4 billion grew 39% YoY but missed the consensus of $1.42 billion. Adjusted EPS of -$0.35 beat expectations of -$0.41. However, daily active users reached 132 million, significantly below the 143.8 million estimate, and hours engaged totaled 31 billion versus expectations of 33.68 billion.

The company slashed its full-year 2026 bookings guidance to a range of $7.33 billion to $7.6 billion, down from its prior outlook of $8.28 billion to $8.55 billion. The midpoint of $7.47 billion falls well below the analyst consensus of $8.38 billion. For the second quarter, Roblox expects bookings of $1.55 billion to $1.61 billion, with a midpoint of $1.58 billion significantly below the $1.88 billion consensus.

"While our aggressive push to enhance safety lowers our expectations for topline growth in 2026, it makes our platform fundamentally better and amplifies the long-term growth potential of Roblox," the company stated in its shareholder letter.

The company attributed the guidance reduction to greater-than-expected headwinds from its mandatory age-check rollout implemented in January, which restricted on-platform communication for non-age checked users and slowed new user acquisition. The platform ban in Russia, which took effect in December 2025, also contributed to the deceleration.

Despite the near-term challenges, Roblox generated $596 million in free cash flow, up 40% YoY and above the $564.5 million estimate. The company announced the launch of Roblox Plus, a $4.99 monthly subscription offering designed to deepen retention among highly engaged users.