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Roblox Corp (RBLX, $30.92) reported a larger-than-expected quarterly loss on Wednesday, as the gaming platform spent more on hiring and its infrastructure, overshadowing solid user growth and sending its shares down 17%. Growth has been slowing in the videogame sector this year as more people step outdoors and reserve spending for essential items in the face of the highest inflation in decades.
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In Q3, Roblox bookings were up by 10% year-over-year to $701.7 million, above the $686 million analysts expected. Daily active users were also up by 24% from the year-ago period to reach 58.8 million, but average bookings per daily active user fell 11% to $11.94. While Roblox beat estimates on several key metrics, the stock dropped as Wall Street reacted to Roblox’s larger-than-anticipated loss.
Why it matters
Despite this setback, many remain more bullish on Roblox in the long-term as a key metaverse player — perhaps even more so than Meta, which is spending billions trying to catch up. There are signs that Roblox is managing to grow and retain its users, even as many among its user base are now aging up. Though it may be hard for Roblox to reach pandemic levels of engagement in the post-COVID era, the company said its September 2022 engagement was nearly 20% higher than in September 2019, pre-COVID.
