Roblox has released its financial report for the second quarter ended June 30. The company is optimistic about its future, but some results and metrics have sent its stock down over 20%.

Roblox optimistic about hitting 1 billion DAU, hopes to accelerate creation process with new genAI tools

Key takeaways

  • According to its letter to shareholders, Roblox reached $680.8 million in revenue in Q2, up 15% year-over-year.
  • Bookings (sales combined with deferred revenue from online purcahses) were $780.7 million, up 22% from the same period last year.
  • The number of daily active users (DAU) was 65.5 million, up 25% year-over-year, but down 1% from the first quarter.
  • However, Roblox remains pretty ambitious about its future: “Given the geographic and age diversity of our user base, along with investments in our product, we are confident that we are building a platform that could, over time, grow to support one billion DAUs.”
  • Average bookings per DAU was $11.92 (down 3% year-over-year), and average bookings per monthly unique player was $19.32 (up 3% year-over-year).
  • In Q2, Roblox spent $315.3 million on R&D and $30.3 million on sales and marketing.
  • The company’s loss from operations grew 84.4% year-over-year to $313.9 million, and its consolidated net loss was  $284.4 million (up 59.3%).
  • Roblox also reported adjusted EBITDA of $37.9 million, down 30.6% from the same period last year.

What caused Roblox shares to drop?

Following the publication of the financial report, Roblox shares plunged 21%. According to Bloomberg, this is the biggest decrease in nine months.

One the main reasons was the fact that the company missed analysts’ DAU expectations, leaving them doubtful that is capable of hitting the 1 billion mark. Wedbush Securities analyst Michael Pachter also noted that Roblox’s level of profitability “makes it hard for many investors to justify a $20 billion valuation.”

Roblox’s AI plans

Roblox sees AI as a “critical enabling technology for accelerating creation across the platform.” The company is now working on its “multimodal generative AI model” that works with images, code, 3D models, and audio.

“Such a model can then be translated into a rich set of tools for 3D creation, avatar behavior modeling, and content and behavior moderation that are significantly more efficient and accurate,” Roblox said.

During an earnings call, CEO David Baszucki elaborated on the company’s AI ambitions: “There’s a great video clip — we’re not going to claim when we will achieve this — on Westworld, where there’s a text-based interaction of 3D creation. And we do think that’s the product vision, where developers will have all tools at their disposal.”

The company cited Material Generator and Code Assist (introduced in March) as early examples of such tools. The multimodal genAI model will be built using Roblox’s large dataset of 3D models, experiences, and moderation data.

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