Roblox shares tumble over 10% on weak bookings outlook, user miss

Investing.com -- Roblox Corp. (NYSE: RBLX) reported second quarter results that missed analyst expectations on key metrics, with shares falling 11.5% as the company issued third quarter bookings guidance well below Wall Street estimates.

The gaming platform reported a loss per share of $0.26, beating the analyst estimate of a $0.35 loss. However, daily active users reached 123 million, missing the consensus estimate of 128.71 million. Bookings came in at $1.56 billion, below the $1.6 billion estimate, while revenue of $1.47 billion exceeded expectations of $1.42 billion, up 36% YoY. Hours engaged totaled 29 billion, falling short of the 30.86 billion estimate.

For the third quarter, Roblox issued bookings guidance of $1.58 billion to $1.65 billion, with a midpoint of $1.615 billion significantly below the analyst consensus of $1.87 billion. The company expects revenue between $1.41 billion and $1.49 billion, with the midpoint of $1.45 billion in line with the $1.49 billion estimate.

The company attributed the bookings shortfall to declining monetization per hour, particularly among younger users in the U.S. and Canada. This reflected a shift in engagement from high-monetizing viral games to new and evergreen games with lower hourly monetization, compounded by changes to the Recommended for You algorithm that prioritizes retention over near-term monetization.

"Our Q2 performance reflects this balance," the company stated, noting continued topline growth and robust cash flow generation despite challenging prior year comparisons.

Free cash flow reached $294 million, up 66% YoY and exceeding the $223.9 million estimate. Operating cash flow totaled $318 million, up 60% YoY. Average monthly unique payers increased 15% YoY to 27 million.

The company announced it is accelerating its transition to quarterly-only guidance, discontinuing annual guidance going forward.

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