Roblox Reports Third Quarter 2021 Financial Results

11/08/2021

Year-over-year Revenue Up 102% to $509.3 Million; Bookings Up 28% to $637.8 Million; and Free Cash Flow of $170.6 million

Roblox Corporation (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, released its third quarter 2021 financial results today and separately posted a letter to shareholders and supplemental materials on the Roblox investor relations website at ir.roblox.com.

Third Quarter 2021 Financial Highlights

  • Revenue increased 102% over Q3 2020 to $509.3 million
  • Net loss attributable to common stockholders for Q3 2021 was $74.0 million
  • Net cash provided by operating activities of $181.2 million; Free cash flow increased 7% over Q3 2020 to $170.6 million.
  • Bookings increased 28% over Q3 2020 to $637.8 million
  • Average Daily Active Users (DAUs) were 47.3 million, an increase of 31% year over year:
  • Hours Engaged were 11.2 billion, an increase of 28% year over year
  • Average Bookings per DAU (ABPDAU) was $13.49

For October 2021 key metric estimates, please refer to our Q3 2021 Shareholder Letter at ir.roblox.com.

“Engagement is our north star. We’re very pleased that during the third quarter, people of all ages from across the globe chose to spend over 11 billion hours on Roblox,” said David Baszucki, Chief Executive Officer of Roblox. “We are happy to report that the developer community earned over $130 million in the quarter and is on pace to earn well over $500 million this year. As we finish 2021 and head into 2022, we will continue to invest in innovative technology to enable our developer community to do what they do best - build and create.”

“Growth in all of our core metrics - DAUs, hours, and bookings - displayed strong year-over-year growth despite lapping Covid-impacted periods and back-to-school seasonality,” said Michael Guthrie, Chief Financial Officer of Roblox. “Notwithstanding significant investments in developer economics and hiring, we also generated healthy cash from operations. Based on our October results, we appear to be having a great start to the last quarter of the year.”

Earnings Q&A Session

Roblox will host a live Q&A session to answer questions regarding their third quarter 2021 results on Tuesday, November 9, 2021 at 5:30 a.m. Pacific Time. The webcast will be open to the public at ir.roblox.com.

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 investment strategy, business strategy and growth plans, our expectation of successfully executing such strategies and plans and our expectations for our fiscal fourth quarter financial results. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “continue,” “project,” “plan,” “goals,” “opportunity,” “appeal,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “intend,” “shall,” 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 in our Quarterly Report on Form 10-Q filed for the fiscal quarter ended June 30, 2021 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; the impact of our senior notes and any future indebtedness on our business, financial condition and results of operations; the demand for our platform in general; our ability to increase our number of new users and revenue generated from users; our ability to retain and expand our user base; the impact on our business of the COVID-19 pandemic restrictions and the easing of those restrictions as vaccinations become more prevalent; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; our ability to successfully develop and deploy new technologies to address the needs of our users; our ability to maintain and enhance our brand and reputation; our ability to hire and retain talent; news or social media coverage about Roblox, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; any breach or access to user or third-party data; and our ability to maintain the security and availability of our platform. 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 Quarterly Report Form 10-Q for the fiscal quarter ended June 30, 2021.

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. 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. Past performance is not necessarily indicative of future results.

ROBLOX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
(unaudited)
As of
September 30, December 31,

2021

2020

 
Assets
Current assets:
Cash and cash equivalents

$

1,925,559

 

$

893,943

 

Accounts receivable—net of allowances

 

168,762

 

 

246,986

 

Prepaid expenses and other current assets

 

37,667

 

 

26,274

 

Deferred cost of revenue, current portion

 

379,611

 

 

256,928

 

Total current assets

 

2,511,599

 

 

1,424,131

 

Property and equipment—net.

 

227,330

 

 

206,415

 

Operating lease right-of-use assets

 

220,404

 

 

-

 

Deferred cost of revenue, long term

 

125,643

 

 

113,793

 

Intangible assets, net

 

63,478

 

 

42,326

 

Goodwill

 

118,071

 

 

59,568

 

Other assets

 

5,755

 

 

1,567

 

Total assets

$

3,272,280

 

$

1,847,800

 

Liabilities, Convertible Preferred Stock, and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable

$

20,733

 

$

12,012

 

Accrued expenses and other current liabilities

 

157,916

 

 

65,392

 

Developer exchange liability

 

117,756

 

 

80,912

 

Deferred revenue—current portion

 

1,621,186

 

 

1,070,230

 

Total current liabilities

 

1,917,591

 

 

1,228,546

 

Deferred revenue—net of current portion

 

550,118

 

 

484,699

 

Operating lease liabilities

 

196,447

 

 

-

 

Other long-term liabilities

 

2,293

 

 

22,109

 

Total liabilities

 

2,666,449

 

 

1,735,354

 

Commitments and contingencies
Convertible Preferred Stock
Convertible preferred stock, Series A, B, C, D, D-1, E, F, and G $0.0001 par value, zero and 349,522 shares authorized as of September 30, 2021, and December 31, 2020, respectively; zero and 337,235 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively; aggregate liquidation preference of zero and $335,654 as of September 30, 2021, and December 31, 2020, respectively

 

-

 

 

344,827

 

Stockholders' Equity (Deficit)
Preferred stock; $0.0001 par value per share; 100,000 and zero shares authorized as of September 30, 2021 and December 31, 2020, respectively; zero shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

-

 

 

-

 

Common stock, $0.0001 par value; 5,000,000 and 740,000 authorized as of September 30, 2021, and December 31, 2020, respectively, 578,471 and 201,327 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively; Class A common stock — 4,935,000 and 675,000 shares authorized as of September 30, 2021, and December 31, 2020, respectively; 527,134 and 144,039 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively; Class B common stock — 65,000 shares authorized as of September 30, 2021, and December 31, 2020, respectively, 51,337 and 57,287 shares issued and outstanding as of September 30, 2021, and December 31, 2020, respectively

 

58

 

 

20

 

Additional paid-in capital

 

1,434,190

 

 

239,792

 

Accumulated other comprehensive income

 

112

 

 

90

 

Accumulated deficit

 

(840,643

)

 

(492,290

)

Total Roblox Corporation stockholders' equity (deficit)

 

593,717

 

 

(252,388

)

Noncontrolling interests

 

12,114

 

 

20,007

 

Total stockholders' equity (deficit)

 

605,831

 

 

(232,381

)

Total liabilities, convertible preferred stock, and stockholders' equity (deficit)

$

3,272,280

 

$

1,847,800

 

ROBLOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,

2021

2020

2021

2020

Revenue

$

509,336

 

$

251,914

 

$

1,350,412

 

$

613,876

 

Cost and expenses:
Cost of revenue(1)

 

130,015

 

 

65,818

 

 

344,882

 

 

161,280

 

Developer exchange fees

 

129,952

 

 

85,475

 

 

378,604

 

 

215,026

 

Infrastructure and trust & safety

 

117,387

 

 

71,405

 

 

320,509

 

 

185,878

 

Research and development

 

138,245

 

 

51,708

 

 

359,637

 

 

141,366

 

General and administrative

 

51,584

 

 

16,168

 

 

243,637

 

 

65,433

 

Sales and marketing

 

19,599

 

 

12,858

 

 

58,591

 

 

42,423

 

Total cost and expenses

 

586,782

 

 

303,432

 

 

1,705,860

 

 

811,406

 

Loss from operations

 

(77,446

)

 

(51,518

)

 

(355,448

)

 

(197,530

)

Interest income

 

28

 

 

217

 

 

59

 

 

1,758

 

Other income/(expense), net

 

(770

)

 

1,306

 

 

(1,810

)

 

(1,357

)

Loss before provision for income taxes

 

(78,188

)

 

(49,995

)

 

(357,199

)

 

(197,129

)

Provision for/(benefit from) for income taxes

 

(998

)

 

19

 

 

(976

)

 

25

 

Consolidated net loss

 

(77,190

)

 

(50,014

)

 

(356,223

)

 

(197,154

)

Net loss attributable to the noncontrolling interest

 

(3,188

)

 

(1,401

)

 

(7,870

)

 

(2,641

)

Net loss attributable to common stockholders

$

(74,002

)

$

(48,613

)

$

(348,353

)

$

(194,513

)

Net loss per share attributable to common stockholders, basic and diluted

$

(0.13

)

$

(0.26

)

$

(0.73

)

$

(1.09

)

Weighted-average shares used in computing net loss per share attributable to common stockholders – basic and diluted 575,932 183,454 480,357 177,771
 

(1) Depreciation of servers and infrastructure equipment included in infrastructure and trust & safety.

ROBLOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Nine Months Ended
September 30,

2021

2020

Cash flows from operating activities:
Consolidated net loss

$

(356,223

)

$

(197,154

)

Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operations:
Depreciation and amortization

 

53,439

 

 

30,232

 

Stock-based compensation expense

 

221,722

 

 

62,962

 

Change in fair value of warrants

 

-

 

 

1,890

 

Operating lease non-cash expense

 

31,936

 

 

-

 

Other non-cash charges/(credits)

 

1,137

 

 

1,271

 

Changes in operating assets and liabilities:
Accounts receivable

 

77,086

 

 

(67,184

)

Accounts payable

 

(230

)

 

6,163

 

Prepaid expenses and other current assets

 

(19,501

)

 

(3,549

)

Other assets

 

(4,188

)

 

1,359

 

Developer exchange liability

 

36,844

 

 

21,623

 

Accrued expenses and other current liabilities

 

38,098

 

 

10,430

 

Other long-term liability

 

(1,022

)

 

2,221

 

Operating lease liabilities

 

(24,055

)

 

-

 

Deferred revenue

 

616,375

 

 

630,870

 

Deferred cost of revenue

 

(134,532

)

 

(155,798

)

Net cash provided by operating activities

 

536,886

 

 

345,336

 

Cash flows from investing activities:
Acquisition of property and equipment

 

(48,331

)

 

(52,262

)

Payments related to business combination, net of cash acquired

 

(45,692

)

 

-

 

Purchases of short-term investments

 

-

 

 

(5,991

)

Maturities of short-term investments

 

-

 

 

54,000

 

Purchases of intangible assets

 

(7,856

)

 

(451

)

Net cash used in investing activities

 

(101,879

)

 

(4,704

)

Cash flows from financing activities:
Proceeds from issuance of preferred stock for warrant exercises

 

-

 

 

147

 

Proceeds from issuance of common stock

 

62,278

 

 

9,654

 

Net proceeds from issuance of preferred stock

 

534,286

 

 

149,669

 

Net cash provided by financing activities

 

596,564

 

 

159,470

 

 
Effect of exchange rate changes on cash and cash equivalents

 

45

 

 

51

 

 
Net increase in cash and cash equivalents

 

1,031,616

 

 

500,153

 

Cash and cash equivalents
Beginning of year

 

893,943

 

 

301,493

 

End of year

$

1,925,559

 

$

801,646

 

 
Supplemental disclosure of cash flow information:
Cash paid for interest

 

-

 

 

-

 

Cash paid for income taxes

 

-

 

 

-

 

 
Supplemental disclosure of noncash investing and financing activities:
Fair value of common stock and unregistered restricted stock units issued as consideration for business combination

$

31,274

 

$

-

 

Property and equipment additions in accounts payable and accrued expenses

$

32,935

 

$

23,482

 

Conversion of convertible preferred stock to common stock upon direct listing

$

879,113

 

$

-

 

Use of Non-GAAP Financial Measures

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

We use this non-GAAP financial information to evaluate our ongoing operations, for internal planning and forecasting purposes, and ongoing operating trends for purposes of analyzing the covenants specified in the indenture governing our senior notes due 2030. 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. Bookings is equal to the amount of virtual currency purchased by users in a given period of measurement. 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. Free cash flow represents the net cash provided by operating activities less purchases of property, equipment, and intangible assets. 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, can be used for strategic initiatives, including investing in our business, making strategic acquisitions, and strengthening our balance sheet. Adjusted EBITDA is a measure of operating performance used in certain covenant calculations specified in the indenture governing our senior notes due 2030 that is not calculated in accordance with GAAP and may not conform to the calculation of EBITDA in other circumstances. Adjusted EBITDA should not be considered as a substitute for net loss as determined in accordance with GAAP. We believe that, when considered together with reported amounts, Adjusted EBITDA is useful to investors and management in understanding our ongoing operations and ongoing operating trends for purposes of analyzing the covenants specified in the indenture governing our senior notes due 2030.

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.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. 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 measure.

Three Months Ended
September 30,
Nine Months Ended
September 30,

2021

2020

2021

2020

(dollars in thousands) (dollars in thousands)
Bookings

$

637,833

 

$

496,485

 

$

1,955,590

 

$

1,240,232

 

 
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:
 
Three Months Ended
September 30,
Nine Months Ended
September 30,

2021

2020

2021

2020

(dollars in thousands) (dollars in thousands)
Reconciliation of revenue to bookings:
Revenue

$

509,336

 

$

251,914

 

$

1,350,412

 

$

613,876

 

Add (deduct):
Change in deferred revenue

 

131,439

 

 

246,567

 

 

616,375

 

 

630,870

 

Other

 

(2,942

)

 

(1,996

)

 

(11,197

)

 

(4,514

)

Bookings

$

637,833

 

$

496,485

 

$

1,955,590

 

$

1,240,232

 

Nine Months Ended
September 30,

2021

2020

(dollars in thousands)
Free cash flow

$

480,699

 

$

292,623

 

 
The following table presents a reconciliation of net cash from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, for each of the periods presented:
 
Nine Months Ended
September 30,

2021

2020

(dollars in thousands)
Reconciliation of net cash from operating activities to free cash flow:
Net cash provided by operating activities

$

536,886

 

$

345,336

 

Add (deduct):
Acquisition of property and equipment

 

(48,331

)

 

(52,262

)

Purchases of intangible assets

 

(7,856

)

 

(451

)

Free cash flow

$

480,699

 

$

292,623

 

Acquisition of property and equipment primarily includes servers, infrastructure equipment and tenant improvements.

Three Months Ended
September 30,
Nine Months Ended
September 30,

2021

2020

2021

2020

(dollars in thousands) (dollars in thousands)
Adjusted EBITDA

$

135,672

 

$

161,045

 

$

505,917

 

$

374,285

 

 
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:
 
Three Months Ended
September 30,
Nine Months Ended
September 30,

2021

2020

2021

2020

Reconciliation of consolidated net loss to adjusted EBITDA: (dollars in thousands) (dollars in thousands)
Consolidated net loss

$

(77,190

)

$

(50,014

)

$

(356,223

)

$

(197,154

)

Add (deduct):
Interest income

 

(28

)

 

(217

)

 

(59

)

 

(1,758

)

Other expense

 

770

 

 

(1,306

)

 

1,810

 

 

1,357

 

Provision (benefit) for income taxes

 

(998

)

 

19

 

 

(976

)

 

25

 

Depreciation and amortization

 

19,029

 

 

11,380

 

 

53,439

 

 

30,232

 

Stock-based compensation expense

 

89,319

 

 

13,296

 

 

221,722

 

 

62,962

 

Change in fair value of warrants

 

-

 

 

-

 

 

-

 

 

1,890

 

Accretion and amortization on marketable securities

 

-

 

 

17

 

 

-

 

 

-

 

Change in deferred revenue

 

131,439

 

 

246,567

 

 

616,375

 

 

630,870

 

Change in deferred cost of revenue

 

(26,669

)

 

(60,356

)

 

(134,532

)

 

(155,798

)

Fees related to equity offering

 

-

 

 

1,659

 

 

50,586

 

 

1,659

 

Fees related to certain legal settlements

 

-

 

 

-

 

 

53,775

 

 

-

 

Adjusted EBITDA

$

135,672

 

$

161,045

 

$

505,917

 

$

374,285

 

About Roblox

Roblox’s mission is to build a human co-experience platform that enables shared experiences among billions of users. Every day, tens of millions of people around the world have fun with friends as they explore millions of immersive digital experiences. All of these experiences are built by the Roblox community, made up of millions of creators. We believe in building a safe, civil, and diverse community—one that inspires and fosters creativity and positive relationships between people around the world. For more information, 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. © 2021 Roblox Corporation. All rights reserved.

Anna Yen
Roblox Investor Relations
ir@roblox.com

Stefanie Notaney
Roblox Corporate Communications
press@roblox.com

Source: Roblox Corporation