Markets

Roblox Shares Close Down 26% After Earnings Miss

NYSE
  • Roblox shares plunged 26% after the company reported earnings that missed expectations.
  • The gaming company reported fourth-quarter revenue of $770 million, below the $772 million that analysts expected. Its loss of 25 cents per share was wider than the 13 cents anticipated.
  • Roblox also reported 49.5 million daily active users, up 33% from the year-earlier period.

Roblox shares closed down more than 26% on Wednesday, after the company reported earnings Tuesday evening that missed expectations.

Shares began dropping after the bell Tuesday and continued to fall Wednesday, closing at $53.87, a 52-week low.

The gaming company reported fourth-quarter revenue (bookings) of $770 million, below the $772 million expected, per Refinitiv consensus estimates. Its loss of 25 cents per share was wider than the 13 cents anticipated, and it reported 49.5 million daily active users during the quarter, up 33% from the year-earlier period.

Roblox is an open gaming platform that lets players create their own interactive "worlds." The first major company working on the metaverse to go public, it sells virtual currency, which is used to purchase digital items in its games. It recently partnered with companies such as Nike and the NFL.

"We have so many opportunities to increase monetization on our platform," Roblox CEO David Baszucki said on CNBC's "Squawk on the Street," in response to the earnings miss. "We're not touching advertising, we're not touching 3D immersive shopping. We're being very gentle on monetization relative to quality user growth, creating a safe and civil platform and driving our DAU numbers. So we are focused on user and engagement growth."

Analysts were concerned about the slowdown in bookings and outlook.

"Our key takeaway from Roblox's 4Q update ... January 22' bookings experienced a deceleration relative to past months, up just 2%-3%, YoY as compared to October, November, December '21 at +15%, +23%, +21%, respectively, for example," Stifel analysts said in a note Tuesday evening.

"Furthermore, the company indicated YoY bookings comps, 'should improve starting in the May-June time frame,' leaving us to ponder what this suggests for February-April. Why the anticipated slowdown?"

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