(Bloomberg) -- Roblox Corp. plunged by 21%, the most in nine months, after reporting that people were spending less time playing its games in the second quarter and missing Wall Street’s estimates. 

Roblox customers spent 14 billion hours on the platform in the three months ended June 30, below the 14.4 billion that analysts expected. The number of daily active users, at 65.5 million, fell about 1% from the first quarter. That number also missed analysts’ expectations and threw into question whether Roblox is capable of achieving its ultimate goal of reaching a billion users.

Bookings, which the company defines as sales plus the change in deferred revenue from online purchases, rose 1% from last quarter to $780.7 million. That was ahead of analysts’ projections of $770.6 million. Roblox reported earnings before interest, taxes, depreciation and amortization of $37.9 million, below analysts’ expectations of $48.5 million. 

Although profits are increasing as users spend money on in-game items and cosmetics, “this level of profitability makes it hard for many investors to justify a $20 billion valuation,” Michael Pachter, an analyst at Wedbush Securities, said in an email. “The company is growing revenues nicely, but their profits leave something to be desired.” 

The shares were up 33% this year through Tuesday’s close. 

Roblox is among the most popular gaming platforms. 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.

(Updates with drop in premarket shares in third paragraph.)

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