Roblox Revenue And Engagement Numbers Are Huge, But Still Miss Expectations Causing Stock To Deep Dive Today

Look, Roblox is huge. The creation platform is simply a juggernaut. Although more and more competition has found its way into their space, the king is still on top. It hasn't been all roses and candies though. With net losses quarter after quarter lately and a slew of controversial accusations levied at the company, you would be right to wonder how it is all being held together.

As of this writing, Roblox stock prices are down over 20% after the company released its latest financial statement.

Surface level? The numbers continue to be huge. First quarter revenue came in at $801.3 million, which is an increase of 22% YoY (year-over-year). Bookings were also up 19% YoY, coming in at $923.8 million. Other metrics like Daily Active Users, Hours Engaged, and Average Bookings per Daily Active User were also all up YoY.

So...where's the bad news? Why is the stock falling?

First, the net losses continue to pile up with Q1 seeing a $270.6 million net loss, slightly more than this time time last year. Second, while the other metrics may be big, they weren't as big as Wall Street expected. Combine those two factors, and you have a bit of a "sell" call hitting the company's stock.

That $801.3 million in revenue is great, but investors expected $918.8 million. Looking at the full year, Roblox expected to snag $4.18 billion in bookings, but they "only" hit the $4.05 billion mark.

Wait, what about growing the users? Well, yeah, Hours Engaged being up 15% YoY is great, but that 16.7 billion hours fell short, once again, of the 17.1 billion hour expectation.

“Our teams have been hard at work identifying opportunities to drive DAUs (daily active users), hours, and bookings growth rates back to 20% year over year,” said Chief Executive David Baszucki. Baszucki also reiterates the potential of the company's investments into VR metaverse technology and new algorithms for content distribution.

Is Roblox going anywhere anytime soon? No, of course not. However, when you fail to meet Wall Street expectations quarter after quarter...things can get a bit tough out there as 2024 continues to  show the video game industry.