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Roblox, the platform for Lego-like user-generated games, reported its bookings for the third quarter ended September 30 were $637.8 million, up 28% from the same period a year ago.
The San Mateo company reported a net loss of $74 million on revenues of $509.3 million (up 102%) for the third quarter.
Roblox has done well among its target audience of children and teens during the pandemic, as players turned to it for remote, socially distanced play with their friends at a time when they couldn’t meet in-person.
Roblox previously raised $520 million at a $29.5 billion valuation in a financing round ahead of its direct listing on the New York Stock Exchange as a public company. It opened on March 10 at a valuation of $41.9 billion a share and has hovered around that value. And now it said that it is raising up to $1 billion through debt known as secured notes.
Three top investment pros open up about what it takes to get your video game funded.
In after-hours trading, Roblox’s stock is up 25% to $96.66 a share.
“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, CEO of Roblox, in a statement. “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.”
Analysts expected a loss of 14 cents a share on bookings of $636.5 million. Most video game companies emphasize non-GAAP bookings, or the total value of virtual currency purchases by players during the quarter, instead of revenues, which under accounting rules are limited to those purchases that are expected to be fully resolved within a certain time period. For instance, a player may buy Robux currency in the first quarter, but spend it over 10 months. That revenue has to be recognized over time, as it is spent inside the platform’s games.
Roblox’s quarterly revenue came in at $509.3 million, up 102% from a year earlier. The GAAP net loss for the quarter was $74 million, or 13 cents a share. Net cash from operations was $181.2 million.
Roblox gets a 30% cut from the bookings generated by sales of Robux, the virtual currency used by players to play user-generated games, the company’s bookings for 2020 were $1.9 billion, double what they were the year before. Roblox’s games have become so popular that people have played the best ones billions of times.
In the quarter, average daily active users (DAU) were 47.3 million, up 31% from a year earlier and up from 43 million in the second quarter. Hours engaged were 11.2 billion, up 28% from a year ago, and average bookings per DAU were $13.49, down from $13.73 due to a shift in the demographic user base for the company.
For the year 2020, on average, Roblox said that 32.6 million people came to the platform every day. More than 1.25 million creators have made money in Roblox. In the year ended December 31, 2020, users spent 30.6 billion hours engaged on the platform, an average of 2.6 hours per daily active user each day.
“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, in a statement. “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.”
In the previous quarter, Roblox had 1,234 employees. Now it has 1,435 employees, up 66% from 865 employees at this time last year. Engineering and product talent still comprise approximately 80% of the employee base.
In October, Roblox issued $1 billion aggregate principal amount of 3.875% senior unsecured notes due 2030. Net proceeds will be used for general corporate purposes.
Adjusted EBITDA, a measure of operating performance used in the covenant calculations specified in the indenture related to our 3.875% senior unsecured notes due 2030, was $135.7 million in Q3 2021 compared to $161.0 million in Q3 2020.
Rather than make forecasts about how its upcoming quarter is expected to go, Roblox is not making a forecast. Rather, it is disclosing the actual results for the month of October, which is part of the fourth quarter.
Roblox had an outage across its platform from October 28 through October 31. The company is working on analyzing the root cause still.
Through the first 27 days of October (prior to the outage), average DAUs were 50.5 million, an increase of 43% over the same period in 2020. Given the outage, actual average DAUs for the full month of October dropped to 47.1 million.
Through the first 27 days of October, cumulative hours of engagement were 3.2 billion, up 41% over the same period in 2020. Actual cumulative hours of engagement for the full month of October were 3.4 billion.
Through the first 27 days of October, bookings were estimated to be between $177 to $179 million, an increase of 30% – 34% over the same period in 2020. Actual bookings for the entire month of October were estimated to be between $189 to $192 million.
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