Shares for Roblox Corporation fell by more than 20% on Wednesday after the company reported second-quarter revenue that fell short of projections, as the video game firm said it expects to report net losses for the “foreseeable future” amid growth in daily active users.
Roblox shares fell 20% on Wednesday.
Roblox’s shares closed at $37.74 on Tuesday before dropping to $30.01 as of 12:55 p.m. Wednesday, the largest dip for Roblox—whose shares were up 33% this year through Tuesday—since December.
Roblox reported $780.7 million in bookings—defined by the company as sales plus purchases made within the game—in its second-quarter report, a 22% increase year-over-year that was short of the projected $785 million, according to CNBC.
The company said a net loss of $282.2 million was attributed to its growing player base, noting it had “higher levels of expense required to support the growth of the business.”
Roblox reported 65.5 million average daily active users—how many people play the game on average each day—and 13.5 million monthly unique players, an increase of 25% and 19% year-over-year, respectively.
The average money spent per daily active user was $11.92, down 3% year-over-year, while new monthly users spent an average of $19.32, an increase of 3% year-over-year.
Mike Hickey, an analyst for MKM Partners, told the Wall Street Journal that Roblox—which went public in 2021—is a company that is “hard to model” and could have had “a great quarter” if it provided its own quarterly guidance to shareholders, which it does not do.
In a letter to shareholders on Wednesday, Roblox said it would “expect to continue to report net losses for the foreseeable future even as we anticipate generating net cash provided by operating activities.”
14 billion. That’s how many hours were spent playing Roblox in the company’s second quarter, an 24% increase year-over-year.
Roblox—an online game that launched in 2006—has become one of the more popular gaming platforms, as more than an average of 200 million people have played the game each month since August 2021. The company generates revenue from sales of its virtual currency “Robux,” which allows its users to buy cosmetics for their avatars and other in-game features. The company reported $1.9 billion in revenue for 2021, an 108% increase over the previous year, before reporting $2.2 billion in revenue the following year. Roblox has been mostly popular among children, though it announced earlier this year it would soon allow content creators to create content for users aged 17 or older.
Roblox Shares Up Nearly 25% Following Promising Q4 Results (Forbes)
Roblox Shares Drop 20% After Company Misses Estimates On Top And Bottom Line (CNBC)