Roblox Reports Second Quarter 2024 Financial Results

Strong Growth Across Core Financial and Operating Metrics; Revenue¹ up 31% year-over-year, Bookings² up 22% year-over-year, record DAUs up 21% year-over-year and record Hours Engaged up 24% year-over-year

Roblox Corporation (NYSE:RBLX), a global platform bringing millions of people together through shared experiences, released its second quarter 2024 financial and operational results and issued its third quarter and updated full year 2024 guidance today. Separately, Roblox posted a letter to shareholders and supplemental materials on the Roblox investor relations website at ir.roblox.com.

Second Quarter 2024 Financial, Operational, and Liquidity Highlights¹

• Revenue was $893.5 million, up 31% year-over-year.
• Bookings² were $955.2 million, up 22% year-over-year.
• Net loss attributable to common stockholders was $205.9 million, while consolidated net loss was $207.2 million.
• Adjusted EBITDA² was $66.5 million, which excludes adjustments for increases in deferred revenue and deferred cost of revenue of $66.7 million and $(18.8) million, respectively, or a total change in deferred of $47.9 million.
• Net cash and cash equivalents provided by operating activities was $151.4 million, up 433% year-over-year, while free cash flow² was $111.6 million, compared to $(95.5) million in the second quarter of 2023.
• Average Daily Active Users ("DAUs") were 79.5 million, up 21% year-over-year.
• Average monthly unique payers were 16.5 million, up 22% year-over-year, and average bookings per monthly unique payer was $19.34.
• Hours engaged were 17.4 billion, up 24% year-over-year.
• Average bookings per DAU was $12.01, up 1% year-over-year.
• Cash and cash equivalents, short-term investments, and long-term investments totaled $3.6 billion; net liquidity³ was $2.6 billion.

"Our strong Q2 growth across all core metrics is driven by diverse and high quality content. As a UGC platform, we support a large and motivated creator community that continues to thrive. The dynamic Roblox content ecosystem is unique and our platform continues to attract users of all ages from across the globe. Going forward, we will continue to invest in our core platform to help our creator community build better and safer experiences and reach more people," said David Baszucki, founder and CEO of Roblox.

"The combination of strong topline growth, fixed cost discipline, and reduced capital expenditures allowed us to deliver significantly more cash flow in Q2 2024 than in Q2 2023. Net cash and cash equivalents provided by operating activities were $151.4 million in Q2 2024, up 433% from $28.4 million in Q2 2023. Free cash flow for the quarter was $111.6 million, an increase of $207.1 million over free cash flow of $(95.5) million in Q2 2023," said Michael Guthrie, chief financial officer of Roblox.

Forward Looking Guidance⁴

Roblox provides its third quarter and updated full year 2024 GAAP and non-GAAP guidance:

Third Quarter 2024 Guidance

• Revenue between $860 million and $885 million.
• Bookings between $1,000 million and $1,025 million.
• Consolidated net loss between $(275) million and $(255) million.
• Adjusted EBITDA between $22 million and $42 million, which excludes adjustments for:
  • Increase in deferred revenue of $145 million.
  • Increase in deferred cost of revenue of $(32) million.
  • The total of these changes in deferrals of $113 million.
• Net cash and cash equivalents provided by operating activities between $147 million and $162 million.
• Capital expenditures and purchases of intangible assets of $(42) million.
• Free cash flow between $105 million and $120 million.

Updated Full Year 2024 Guidance

• Revenue between $3,490 million and $3,540 million.
• Bookings between $4,180 million and $4,230 million.
• Consolidated net loss between $(1,089) million and $(1,049) million.
• Adjusted EBITDA between $92 million and $132 million, which excludes adjustments for:
  • Increase in deferred revenue of $711 million.
  • Increase in deferred cost of revenue of $(163) million.
  • The total of these changes in deferrals of $548 million.
• Net cash and cash equivalents provided by operating activities between $685 million and $715 million.
• Capital expenditures and purchases of intangible assets of $(180) million.
• Free cash flow between $505 million and $535 million.

Earnings Q&A Session

Roblox will host a live Q&A session to answer questions regarding its second quarter 2024 results on Thursday, August 1, 2024 at 5:30 a.m. Pacific Time/8:30 a.m. Eastern Time. The webcast will be open to the public at ir.roblox.com or by clicking here.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our vision to connect one billion global DAUs, our efforts to improve the Roblox Platform, our immersive and video advertising efforts, including our ads manager and independent measurement partnerships, our efforts to provide a safe online environment for children, our efforts regarding content curation, live operations and platform-wide events, our efforts regarding real-world shopping, the use of artificial intelligence ("AI") on our platform, our economy and product efforts related to creator earnings and platform monetization, our sponsored experiences, branding and new partnerships and our roadmap with respect to each, our business, product, strategy and user growth, our investment strategy, including our opportunities for and expectations of improvements in financial and operating metrics, including operating leverage, margin, free cash flow, operating expenses and capital expenditures, our expectation of successfully executing such strategies and plans, disclosures regarding the seasonality of our business, disclosures and future growth rates, benefits from agreements with third-party cloud providers, disclosures about our infrastructure efficiency initiatives, changes to our estimated average lifetime of a paying user and the resulting effect on revenue, cost of revenue, deferred revenue and deferred cost of revenue, our expectations of future net losses and net cash and cash equivalents provided by operating activities, statements by our Chief Executive Officer and Chief Financial Officer, and our outlook and guidance for third quarter and full year 2024, and future periods. These forward-looking statements are made as of the date they were first issued and were based on current plans, expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as "expect," "vision," "envision," "evolving," "drive," "anticipate," "intend," "maintain," "should," "believe," "continue," "plan," "goal," "opportunity," "estimate," "predict," "may," "will," "could," and "would," and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the "SEC"), including our annual reports on Form 10-K, our quarterly reports on Form 10-Q and other filings and reports we make with the SEC from time to time. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs, including the repayment of our senior notes; the demand for our platform in general; our ability to retain and increase our number of users, developers, and creators; the impact of inflation and global economic conditions on our operations; the impact of changing legal and regulatory requirements on our business, including the use of verified parental consent; our ability to develop enhancements to our platform, and bring them to market in a timely manner; our ability to develop and protect our brand and build new partnerships; any misuse of user data or other undesirable activity by third parties on our platform; our ability to maintain the security and availability of our platform; our ability to detect and minimize unauthorized use of our platform; and the impact of AI on our platform, users, creators, and developers. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from our expectations is included in the reports we have filed or will file with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measure bookings, Adjusted EBITDA, and free cash flow.

We use this non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information may be helpful to investors because it provides consistency and comparability with past financial performance.

Bookings is defined as revenue plus the change in deferred revenue during the period and other non-cash adjustments. Substantially all of our bookings are generated from sales of virtual currency, which can ultimately be converted to virtual items on the Roblox Platform. Sales of virtual currency reflected as bookings include one-time purchases and monthly subscriptions purchased via payment processors or through prepaid cards. Bookings also include an insignificant amount from advertising and licensing arrangements. We believe bookings provide a timelier indication of trends in our operating results that are not necessarily reflected in our revenue as a result of the fact that we recognize the majority of revenue over the estimated average lifetime of a paying user. The change in deferred revenue constitutes the vast majority of the reconciling difference from revenue to bookings. By removing these non-cash adjustments, we are able to measure and monitor our business performance based on the timing of actual transactions with our users and the cash that is generated from these transactions. Adjusted EBITDA represents our GAAP consolidated net loss, excluding interest income, interest expense, other income/(expense), provision for/(benefit from) income taxes, depreciation and amortization expense, stock-based compensation expense, and certain other nonrecurring adjustments. We believe that, when considered together with reported GAAP amounts, Adjusted EBITDA is useful to investors and management in understanding our ongoing operations and ongoing operating trends. Our definition of Adjusted EBITDA may differ from the definition used by other companies and therefore comparability may be limited. Free cash flow represents the net cash and cash equivalents provided by operating activities less purchases of property, equipment, and intangible assets acquired through asset acquisitions. We believe that free cash flow is a useful indicator of our unit economics and liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after the purchases of property, equipment, and intangible assets acquired through asset acquisitions, can be used for strategic initiatives.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial information as a tool for comparison. As a result, our non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation from, or as a substitute for financial information presented in accordance with GAAP.

Reconciliation tables of the most comparable GAAP financial measure to the non-GAAP financial measure used in this press release are included below. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measures.

GAAP to Non-GAAP Financial Measures Reconciliations

The following table presents a reconciliation of revenue, the most directly comparable financial measure calculated in accordance with GAAP, to bookings, for each of the periods presented (in thousands, unaudited):

The following table presents a reconciliation of consolidated net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, for each of the periods presented (in thousands, unaudited):

The following table presents a reconciliation of net cash and cash equivalents provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, for each of the periods presented (in thousands, unaudited):

Forward Looking Guidance⁵: GAAP to Non-GAAP Financial Measures Reconciliations

The following table presents a reconciliation of revenue, the most directly comparable financial measure calculated in accordance with GAAP, to bookings, for each of the periods presented (in thousands):

The following table presents a reconciliation of consolidated net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, for each of the periods presented (in thousands):

The following table presents a reconciliation of net cash and cash equivalents provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, for each of the periods presented (in thousands):

About Roblox

Roblox is an immersive platform for connection and communication. Every day, millions of people come to Roblox to create, play, work, learn, and connect with each other in experiences built by our global community of creators. Our vision is to reimagine the way people come together– in a world that is safe, civil, and optimistic. To achieve this vision, we are building an innovative company that, together with the Roblox community, has the ability to strengthen our social fabric and support economic growth for people around the world. For more about Roblox, please visit corp.roblox.com.

ROBLOX and the Roblox logo are among the registered and unregistered trademarks of Roblox Corporation in the United States and other countries. © 2024 Roblox Corporation. All rights reserved.

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