Roblox Reports Second Quarter 2023 Financial Results

08/09/2023

Strong year over year growth in Daily Active Users, Hours Engaged, Revenue, and Bookings

Roblox Corporation (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, released its second quarter 2023 financial and operational results today. Separately, Roblox posted a letter to shareholders and supplemental materials on the Roblox investor relations website at ir.roblox.com.

Second Quarter 2023 Financial and Operational Highlights

  • Revenue was $680.8 million, up 15% year-over-year, and up 17% year-over-year on a constant currency basis1.
  • Bookings were $780.7 million, up 22% year-over-year, and also up 22% year-over-year on a constant currency basis1.
  • Net loss attributable to common stockholders was $282.8 million.
  • Net cash provided by operating activities was $28.4 million.
  • Average Daily Active Users (“DAUs”) were 65.5 million, up 25% year-over-year.
  • Average monthly unique payers were 13.5 million, up 19% year-over-year.
  • Hours engaged were 14.0 billion, up 24%year-over-year.
  • Average bookings per DAU (“ABPDAU”) was $11.92, down 3% year-over-year, and down 2% year-over-year on a constant currency basis1. Average bookings per monthly unique payer was $19.32, up 3% year-over-year, and also up 3% year-over-year on a constant currency basis1.

“We continue to drive high rates of organic growth in DAUs, Hours, and Bookings. We are growing among users of all ages and across all geographies. We remain focused on extending our product leadership to drive value for creators and brands, and even more innovative and immersive avatars and experiences for our users,” said David Baszucki, founder and CEO of Roblox.

“This is our second consecutive quarter with year-over-year bookings growth in the low-20s. During the quarter, we also built the plans that we believe will enable us to generate operating leverage against infrastructure and trust & safety spend starting next quarter and against compensation expense starting in the first quarter of 2024,” said Michael Guthrie, chief financial officer of Roblox.

Earnings Q&A Session

Roblox will host a live Q&A session to answer questions regarding their second quarter 2023 results on Wednesday, August 9, 2023 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.

____________________

1

Constant currency is calculated by converting our current period revenue, bookings, ABPDAU, and average bookings per monthly unique payer into U.S. dollars using the comparative prior period's monthly exchange rates for our non-USD currencies, rather than the actual average exchange rates in effect during the current period. By adjusting revenue, bookings, ABPDAU, and average bookings per monthly unique payer for constant currency, we are able to provide a framework for assessing how our business performed excluding the effect of foreign currency rate fluctuations.

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 our users, our efforts to improve the Roblox Platform, our immersive advertising efforts, the use of artificial intelligence (“AI”) on our platform, branding and new partnerships, 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, our expectation of successfully executing such strategies and plans, disclosures and future growth rates, and our expectations of future net losses and net cash generation from operating activities, and statements by our Chief Executive Officer and Chief Financial Officer. 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,” “anticipate,” “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 the COVID-19 pandemic and the easing of restrictions related to the COVID-19 pandemic; the impact of inflation and global economic conditions on our operations; the impact of changing legal and regulatory requirements on our business; 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.

 

ROBLOX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par values)

(unaudited)

 

As of

 

June 30, 2023

 

December 31, 2022

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

520,264

 

 

$

2,977,474

 

Short-term investments

 

1,599,602

 

 

 

 

Accounts receivable—net of allowances

 

257,355

 

 

 

379,353

 

Prepaid expenses and other current assets

 

69,107

 

 

 

61,641

 

Deferred cost of revenue, current portion

 

447,962

 

 

 

420,136

 

Total current assets

 

2,894,290

 

 

 

3,838,604

 

Long-term investments

 

904,897

 

 

 

 

Property and equipment—net

 

684,734

 

 

 

592,346

 

Operating lease right-of-use assets

 

674,928

 

 

 

526,030

 

Deferred cost of revenue, long-term

 

235,903

 

 

 

225,132

 

Intangible assets, net

 

59,176

 

 

 

54,717

 

Goodwill

 

134,335

 

 

 

134,335

 

Other assets

 

11,014

 

 

 

4,323

 

Total assets

$

5,599,277

 

 

$

5,375,487

 

Liabilities and Stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

72,829

 

 

$

71,182

 

Accrued expenses and other current liabilities

 

216,273

 

 

 

236,006

 

Developer exchange liability

 

220,548

 

 

 

231,704

 

Deferred revenue—current portion

 

2,117,043

 

 

 

1,941,943

 

Total current liabilities

 

2,626,693

 

 

 

2,480,835

 

Deferred revenue—net of current portion

 

1,149,346

 

 

 

1,095,291

 

Operating lease liabilities

 

641,664

 

 

 

494,590

 

Long-term debt, net

 

1,004,335

 

 

 

988,984

 

Other long-term liabilities

 

13,039

 

 

 

10,752

 

Total liabilities

 

5,435,077

 

 

 

5,070,452

 

Stockholders’ equity

 

 

 

Common stock, $0.0001 par value; 5,000,000 authorized as of June 30, 2023 and December 31, 2022, 616,301 and 604,674 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively; Class A common stock—4,935,000 shares authorized as of June 30, 2023 and December 31, 2022, 566,215 and 553,337 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively; Class B common stock—65,000 shares authorized as of June 30, 2023 and December 31, 2022, 50,086 and 51,337 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

60

 

 

 

59

 

Additional paid-in capital

 

2,641,929

 

 

 

2,213,603

 

Accumulated other comprehensive income/(loss)

 

(14,095

)

 

 

671

 

Accumulated deficit

 

(2,459,397

)

 

 

(1,908,307

)

Total Roblox Corporation Stockholders’ equity

 

168,497

 

 

 

306,026

 

Noncontrolling interests

 

(4,297

)

 

 

(991

)

Total Stockholders’ equity

 

164,200

 

 

 

305,035

 

Total Liabilities and Stockholders’ equity

$

5,599,277

 

 

$

5,375,487

 

 

ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue(1)

$

680,766

 

 

$

591,207

 

 

$

1,336,110

 

 

$

1,128,341

 

Cost and expenses:

 

 

 

 

 

 

 

Cost of revenue(1)(2)

 

162,029

 

 

 

143,157

 

 

 

313,870

 

 

 

278,789

 

Developer exchange fees

 

165,843

 

 

 

143,148

 

 

 

348,283

 

 

 

290,270

 

Infrastructure and trust & safety

 

225,039

 

 

 

158,235

 

 

 

436,083

 

 

 

299,590

 

Research and development

 

315,319

 

 

 

211,757

 

 

 

590,856

 

 

 

389,519

 

General and administrative

 

96,197

 

 

 

78,676

 

 

 

193,771

 

 

 

136,448

 

Sales and marketing

 

30,328

 

 

 

26,501

 

 

 

57,083

 

 

 

55,603

 

Total cost and expenses

 

994,755

 

 

 

761,474

 

 

 

1,939,946

 

 

 

1,450,219

 

Loss from operations

 

(313,989

)

 

 

(170,267

)

 

 

(603,836

)

 

 

(321,878

)

Interest income

 

34,764

 

 

 

4,197

 

 

 

65,846

 

 

 

4,442

 

Interest expense

 

(10,129

)

 

 

(9,891

)

 

 

(20,141

)

 

 

(19,890

)

Other income/(expense), net

 

3,277

 

 

 

(3,051

)

 

 

2,837

 

 

 

(3,430

)

Loss before income taxes

 

(286,077

)

 

 

(179,012

)

 

 

(555,294

)

 

 

(340,756

)

Provision for/(benefit from) income taxes

 

(1,236

)

 

 

(278

)

 

 

(505

)

 

 

(2

)

Consolidated net loss

 

(284,841

)

 

 

(178,734

)

 

 

(554,789

)

 

 

(340,754

)

Net loss attributable to noncontrolling interests

 

(2,064

)

 

 

(2,294

)

 

 

(3,699

)

 

 

(4,112

)

Net loss attributable to common stockholders

$

(282,777

)

 

$

(176,440

)

 

$

(551,090

)

 

$

(336,642

)

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

$

(0.46

)

 

$

(0.30

)

 

$

(0.90

)

 

$

(0.57

)

Weighted-average shares used in computing net loss per share attributable to common stockholders—basic and diluted

 

612,689

 

 

 

593,928

 

 

 

609,680

 

 

 

591,252

 

(1)

In the first quarter of 2022, we updated our estimated paying user life from 23 months to 25 months, which was subsequently updated again to 28 months in the third quarter of 2022, where it remained through the second quarter of 2023. Based on the carrying amount of deferred revenue and deferred cost of revenue as of December 31, 2021, the change in estimate in the first quarter of 2022 resulted in a decrease in revenue during the three and six months ended June 30, 2022 of $40.9 million and $123.5 million, respectively, and a decrease in cost of revenue during the same periods by $9.4 million and $29.0 million, respectively.

(2)

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

ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

Consolidated net loss

$

(284,841

)

 

$

(178,734

)

 

$

(554,789

)

 

$

(340,754

)

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

 

 

 

 

 

 

 

Depreciation and amortization

 

52,599

 

 

 

28,996

 

 

 

100,011

 

 

 

53,493

 

Stock-based compensation expense

 

212,362

 

 

 

146,388

 

 

 

397,266

 

 

 

258,683

 

Operating lease non-cash expense

 

23,509

 

 

 

16,303

 

 

 

44,753

 

 

 

30,300

 

(Accretion)/amortization on marketable securities, net

 

(19,623

)

 

 

 

 

 

(31,745

)

 

 

 

Amortization of debt issuance costs

 

327

 

 

 

311

 

 

 

651

 

 

 

622

 

Impairment expense, (gain)/loss on investment and other asset sales, and other, net

 

(2,067

)

 

 

2,048

 

 

 

6,169

 

 

 

1,481

 

Changes in operating assets and liabilities, net of effect of acquisitions:

 

 

 

 

 

 

 

Accounts receivable

 

9,435

 

 

 

(9,865

)

 

 

122,628

 

 

 

118,318

 

Accounts payable

 

(16,731

)

 

 

(6,867

)

 

 

1,576

 

 

 

(10,635

)

Prepaid expenses and other current assets

 

2,200

 

 

 

(15,983

)

 

 

(6,159

)

 

 

(26,923

)

Other assets

 

(4,533

)

 

 

1,199

 

 

 

(6,691

)

 

 

764

 

Developer exchange liability

 

(7,291

)

 

 

(2,624

)

 

 

(11,156

)

 

 

(16,714

)

Accrued expenses and other current liabilities

 

(5,340

)

 

 

6,406

 

 

 

(22,344

)

 

 

4,340

 

Other long-term liability

 

316

 

 

 

(579

)

 

 

2,286

 

 

 

(579

)

Operating lease liabilities

 

(18,844

)

 

 

(10,021

)

 

 

(30,843

)

 

 

(21,730

)

Deferred revenue

 

105,372

 

 

 

52,140

 

 

 

229,155

 

 

 

148,937

 

Deferred cost of revenue

 

(18,460

)

 

 

(2,621

)

 

 

(38,597

)

 

 

(16,670

)

Net cash and cash equivalents provided by operating activities

 

28,390

 

 

 

26,497

 

 

 

202,171

 

 

 

182,933

 

Cash flows from investing activities:

 

 

 

 

 

 

 

Acquisition of property and equipment

 

(110,915

)

 

 

(83,812

)

 

 

(202,274

)

 

 

(135,602

)

Payments related to business combination, net of cash acquired

 

 

 

 

(6,165

)

 

 

 

 

 

(6,165

)

Purchases of intangible assets

 

(13,000

)

 

 

 

 

 

(13,500

)

 

 

 

Purchases of investments

 

(702,560

)

 

 

 

 

 

(3,042,760

)

 

 

 

Maturities of investments

 

324,010

 

 

 

 

 

 

324,010

 

 

 

 

Sales of investments

 

145,000

 

 

 

 

 

 

229,279

 

 

 

 

Net cash and cash equivalents used in investing activities

 

(357,465

)

 

 

(89,977

)

 

 

(2,705,245

)

 

 

(141,767

)

Cash flows from financing activities:

 

 

 

 

 

 

 

Proceeds from issuance of common stock

 

5,635

 

 

 

5,548

 

 

 

31,107

 

 

 

29,876

 

Payment of withholding taxes related to net share settlement of restricted stock units

 

 

 

 

 

 

 

 

 

 

(150

)

Proceeds from debt issuances

 

14,700

 

 

 

 

 

 

14,700

 

 

 

 

Payment of debt issuance costs

 

 

 

 

 

 

 

 

 

 

(154

)

Payments related to business combination, after acquisition date

 

 

 

 

 

 

 

(750

)

 

 

 

Payment of term license related obligations

 

 

 

 

(420

)

 

 

 

 

 

(420

)

Net cash and cash equivalents provided by financing activities

 

20,335

 

 

 

5,128

 

 

 

45,057

 

 

 

29,152

 

Effect of exchange rate changes on cash and cash equivalents

 

875

 

 

 

863

 

 

 

807

 

 

 

857

 

Net increase/(decrease) in cash and cash equivalents

 

(307,865

)

 

 

(57,489

)

 

 

(2,457,210

)

 

 

71,175

 

Cash and cash equivalents

 

 

 

 

 

 

 

Beginning of period

 

828,129

 

 

 

3,132,964

 

 

 

2,977,474

 

 

 

3,004,300

 

End of period

$

520,264

 

 

$

3,075,475

 

 

$

520,264

 

 

$

3,075,475

 

 

Use of Non-GAAP Financial Measures

This press release and the accompanying table contain the non-GAAP financial measure bookings.

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 be converted to virtual items on the Roblox Platform. Sales of virtual currency reflected as bookings include one-time purchases or 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.

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 the non-GAAP financial measure used in this press release is 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 this non-GAAP measure in conjunction with the most directly comparable GAAP financial measure.

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):

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

 

 

 

 

 

 

 

Reconciliation of revenue to bookings:

 

 

 

 

 

 

 

Revenue

$

680,766

 

 

$

591,207

 

 

$

1,336,110

 

 

$

1,128,341

 

Add (deduct):

 

 

 

 

 

 

 

Change in deferred revenue

 

105,372

 

 

 

52,140

 

 

 

229,155

 

 

 

148,937

 

Other

 

(5,452

)

 

 

(3,445

)

 

 

(10,760

)

 

 

(6,170

)

Bookings

$

780,686

 

 

$

639,902

 

 

$

1,554,505

 

 

$

1,271,108

 

About Roblox

Roblox’s vision is to reimagine the way people come together. Every day, tens of millions of people around the world connect, communicate and explore millions of immersive experiences together with their friends on Roblox. 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. © 2023 Roblox Corporation. All rights reserved.

Stefanie Notaney
Roblox Corporate Communications
press@roblox.com

Source: Roblox Corporation