Roblox Tumbles 13% on Weak Bookings, User Growth Miss

• Roblox Corp. (RBLX) shares fell more than 13% to $65.10 despite beating Q4 revenue and bookings, with revenue up 32% to $988.2 million and bookings up 21% to $1.36 billion.
• The stock decline was driven by concerns over slower daily active user growth and a less-than-expected FY25 bookings outlook of $5.2-$5.3 billion, alongside fears of decelerating growth in the second half of 2025.
• Despite the market’s reaction, Roblox’s CEO emphasized ongoing investments in platform improvements and AI, with the stock having previously surged by over 58% in three months before this drop.

Roblox Corp. (RBLX) shares tumbled $10.26, or 13.59%, to $65.10 on Thursday, despite surpassing Q4 revenue and bookings expectations. The company reported a 32% year-over-year revenue jump to $988.2 million, beating the $967.2 million consensus, while bookings rose 21% to $1.36 billion. Daily active users surged to 85.3 million, and earnings per share came in at ($0.33), exceeding forecasts. Free cash flow also saw a strong 54% increase. However, the stock’s decline was triggered by concerns over lighter-than-expected daily active user growth and a less optimistic bookings outlook for FY25, projected at between $5.2 billion and $5.3 billion with a net loss of about $1.03 billion at the midpoint of co.’s guidance.

The market’s reaction seems to stem from Roblox’s forecast of slower growth in the second half of 2025 and a first-quarter bookings estimate of $1.138 billion, which fell short of analyst expectations. This, combined with a decline in growth rates for both daily active users and average bookings per user compared to the previous quarter, has raised flags about the sustainability of Roblox’s growth momentum. Additionally, the broader gaming industry’s challenges, as seen with Electronic Arts’ (EA) reduced forecast due to declining sales, might have contributed to investor caution.

Despite these concerns, CEO David Baszucki highlighted continued investments in the platform’s virtual economy, performance, and AI-driven enhancements for creator support and user experience. Roblox had been on an upward trajectory, reaching three-year highs with an over 58% increase in just three months before this pullback.

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