Roblox Shares Fall on Dismal Revenue and a Wider Than Expected Loss

Shares of online gaming platform Roblox were heading lower on Tuesday after the company reported disappointing revenue and a wider than expected loss for the first quarter.

The company saw its stock fall about 10% in extended hours after issuing results that fell behind analysts’ estimates.

For the first quarter, Roblox reported a loss of 27 cents versus a loss of 21 cents expected by analysts, per Refinitiv.

Revenue at $631.2 million was also behind the $645 million that was expected by analysts, per Refinitiv.

Roblox also reported fewer users in the quarter than analysts had expected, and bookings dropped from a year earlier.

Bookings declined by 3% in the quarter. This may be a sign of how much Roblox’s business has cooled off from the pandemic, when kids were stuck at home and spending more time on their screens.

The company generates revenue from sales of its virtual currency called Roblox, which players use to dress up their avatars and buy other premium features in the games.

Roblox reported 54.1 million average daily active users in the first quarter, up 28% from a year earlier but trailing behind the StreetAccount consensus of 55 million. Users spent 11.8 billion hours engaged in Roblox, the company said, up 22%.

Average bookings per daily active user slid 25% to $11.67. Analysts polled by StreetAccount had expected $11.65.

The company estimated that in April it had $221 million to $224 million in bookings, down 8% to 10%.

“While Covid and the subsequent re-opening have contributed to slowing growth in several of our metrics, based on third party data we believe we are gaining share on both users and hours relative to certain other companies in gaming and social media that compete for our users’ attention,” Roblox said.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.