Roblox shares drop over 10% on weak bookings forecast and user drop
The company's quarterly forecast missed Wall Street estimates and daily active users fell sequentially, partly due to tougher age-verification steps.
Talivio News · Global1 min read
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Roblox forecast quarterly bookings below Wall Street estimates on July 30. Shares tumbled over 10% in after-hours trading.
1.58–1.65 $ billion
Roblox expects third-quarter bookings in this range, below the $1.77 billion analysts had projected.
The company expects third-quarter bookings between $1.58 billion and $1.65 billion, while Wall Street estimates stood at $1.77 billion. In after-hours trading, shares fell 11% according to one report, while another reported a drop of about 12%.
Tougher age-verification measures weighed on user onboarding and engagement. The added steps made it harder to sign up and reduced access to certain features, the company said.
Roblox implemented age verification to bolster player safety, following heightened scrutiny of its child-safety practices.
Roblox's average daily active users (DAU) fell 7% sequentially in the second quarter to 123 million, though that represented a 10% increase year-over-year.
Users over 18 accounted for 27% of age-verified DAUs in the second quarter. Roblox noted that U.S. users aged 18 and older generate more than 50% higher monetization than users under 18.
The company has increasingly focused on attracting older users and expanding internationally to diversify growth. Roblox allows users to build and explore their own digital worlds on its platform.
Updates
Roblox shares reportedly fell 14% in after-hours trading, a further decline amid disputed reports of the stock's performance. CFO Naveen Chopra cautioned that monetization weakness is likely to continue, though he emphasized that investments in AI, safety, and content diversification are intended to maximize long-term market share. Additionally, shifts in the recommendation algorithm have steered younger users toward evergreen games that generate less revenue per hour compared to previous viral hits.
Roblox shares reportedly fell 14% in after-hours trading, a figure that remains disputed. Following the earnings call, CFO Naveen Chopra stated that monetization weakness is likely to continue, though he noted that investments in AI, safety, and content diversification are intended to maximize future market share. Furthermore, changes to the recommendation algorithm have reportedly steered younger users toward evergreen games that generate less revenue per hour than previous viral hits.
Roblox shares have fallen 14% in after-hours trading, deepening the initial decline. While second-quarter bookings rose 8% to $1.56 billion in line with analyst estimates, CFO Naveen Chopra warned that monetization weakness is expected to persist. The company attributed recent performance challenges to shifts in the recommendation algorithm, which steered younger players toward games generating lower hourly revenue compared to previous viral titles.
Roblox shares suffered a record 29% single-day decline, closing at $34.50 following the earnings report, while the company posted a quarterly loss of 26 cents per share. Management declined to provide full-year guidance and signaled that monetization weakness may persist, citing algorithm changes that prioritized lower-revenue games. Analysts responded with multiple downgrades, including shifts to Sell ratings by Benchmark and BTIG, as the company projected slower revenue growth and potential declines in bookings.
Roblox reported a second-quarter loss of 26 cents per share and provided third-quarter revenue guidance of $1.41 billion to $1.49 billion, though the company chose not to offer full-year guidance. Following the earnings report, BTIG and Benchmark Equity Research downgraded the stock to Sell, while Morgan Stanley lowered its price target to $55 from $62. Additionally, CFO Naveen Chopra noted that monetization weakness is likely to continue, even as the company invests in AI and content diversification.
Roblox reported a second-quarter loss of 26 cents per share and provided third-quarter revenue guidance between $1.41 billion and $1.49 billion, while choosing not to offer full-year guidance. Following the earnings report, BTIG, Benchmark, BMO, and Deutsche Bank downgraded the stock, whereas Morgan Stanley lowered its price target to $55 from $62. Additionally, disputed reports suggest shares fell 14% in after-hours trading, while some analysts noted that Friday's 29% price drop to $34.50 was the company's worst single-day percentage decline on record.
