Roblox stock slumps as user spending slows

Roblox Corp (NYSE:RBLX) stock slumped after results on Monday evening disappointed, with bookings falling shy of Wall Street forecasts.

The pandemic-driven surge in spending on the build-your-own-game platform has slowed, according the financial results, growing by ‘only’ 35% to US$665.5mln versus the 161% growth seen in the prior quarter.

Wall Street had pinned expectations of around US$683mln.

In New York, Roblox shares fell 5.23% during trading then a further 5.11% in after-hours dealing down to US$75.50.

Roblox made a US$140.1mln net loss for the quarter. Revenue was reported at US$454.1mln for the quarter, up 127%, and it said net cash from operating activities increased 64% to US$191.2mln.

Roblox generates revenues from the sale of in-game currency tokens, called Robux, that players can spend on content and in-game items. Bookings are driven by overall activity levels and user volumes on the free-to-play video game platform.

Second-quarter stats showed 43.2mln averages daily active users (DAUs), up 29% year-on-year, and ‘hours engaged’ amounted to 9.7bn up 13% versus the 2020 comparative, though average bookings per DAU was up only slightly at US$15.41 over the quarter.

A break-down of July numbers, meanwhile, showed higher DAUs at 46.6mln and 3.8bn hours engaged, but, marked at US$4.75 to US$4.81, average bookings per DAU fell 7% on year-on-year comparison and 3% from the preceding month.

Nevertheless, chief financial officer Michael Guthrie in a statement said: “The third quarter is off to a strong start with our highest levels of users and engagement to date.”

David Baszucki, chief executive, meanwhile, added: “Our continued growth demonstrates the importance of our mission and the power of our platform.

“These results are fueled both by our creator ecosystem and by the millions of people around the globe who want to connect and share new experiences every day on Roblox.”

Story by ProactiveInvestors