Roblox Earnings Miss Estimates on a Drop in Player Spending

Cecilia D'Anastasio, Bloomberg News

Roblox Corp. website sign up screen on a laptop computer arranged in Little Falls, New Jersey, U.S., on Wednesday, Dec. 9, 2020. Roblox designs and develops online games such as internet three-dimensional and tutorial games. Photographer: Gabby Jones/Bloomberg , Bloomberg

(Bloomberg) -- Roblox Corp. reported first-quarter bookings that beat analysts’ estimates and record average daily users, even while earnings fell short of expectations, suggesting the company faces an uneven path to earn more money from people who flock to the gaming platform.

The San Mateo, California-based company popular with young people reported net bookings, which it defines as sales plus the change in deferred revenue from online purchases, rose 23% to $773.8 million. Daily active users rose 22% to 66.1 million. Adjusted earnings before interest, tax, depreciation and amortization fell 22% from a year earlier to $53.1 million, versus an estimate for $64.9 million.

The shares rose 4.7% at 10:03 a.m. in New York.

Roblox is among the most popular gaming platforms on Earth. The 17-year-old company leads in the metaverse industry, where competitors have struggled to gain traction and companies including Microsoft Corp., Tencent Holdings Ltd. and Meta Platforms Inc. are paring back efforts as hype fades from the space. Organizations including the National Hockey League and H&M continue launching branded Roblox experiences as the company adds tools to empower in-game advertising, and the platforms’ dedicated audience is spending more time in-game than ever.

However, users’ spending within games averaged $11.70 in the first three months of the year, changing little from a year earlier and down from the $15 average over the holidays in the fourth quarter. Roblox has been pushing to increase the average age of its player base, as older players have more spending potential. The latest financial report suggests that these efforts have been slow to pay off.

“Seventeen through 24 is growing very, very rapidly,” Chief Executive Officer and co-founder Dave Baszucki said in an earnings call Wednesday. “We think there’s still enormous headroom in the older player base as people start to use Roblox as a way to socially connect as well.”

Roblox has the eventual goal of attracting a billion daily active users.

(Updates with details from release from second paragraph, adds CEO quote in sixth paragraph)