Roblox shares crash after missing bookings and user targets
- Roblox's fourth-quarter bookings were reported at $1.36 billion, falling short of the $1.37 billion expected.
- Daily active users grew by 19% from the prior year, totaling 85.3 million, but missed estimates of 88.2 million.
- The disappointing results have led to a significant drop in Roblox's stock, showing nearly a 53% decline from its peak in November 2021.
On February 6, 2025, Roblox Corporation, a popular gaming platform, reported disappointing financial results for the fourth quarter of 2024. The company's bookings totaled $1.36 billion, slightly below the estimated $1.37 billion anticipated by industry analysts. Despite showing a 19% year-on-year growth in daily active users, which reached 85.3 million, this figure fell short of the expected 88.2 million. The financial shortcoming reflects a challenging environment within the video game industry, as evidenced by recent changes in forecasts by other major companies like Electronic Arts. In the context of these challenges, Roblox’s CEO, David Baszucki, addressed the company's plans for the future in the earnings release. He confirmed that Roblox aims to extend its investments into its virtual economy and enhance app performance. The focus will also be on utilizing artificial intelligence for better user safety and discovery, which is seen as critical for empowering creators and improving user experiences. Additionally, the outlook for earnings in 2025 has been adjusted, with bookings expected to fall between $5.20 billion and $5.30 billion, less than the $5.30 billion predicted by analysts. This change in forecast reflects broader industry trends, which have witnessed some companies, such as Electronic Arts, curtailing their expected revenue due to slower sales in key franchises, notably in sports gaming. Roblox, which went public in March 2021 with a notable market cap, has seen its shares decline significantly since their peak. The stock has plummeted nearly 53% from its all-time high recorded in November 2021, reflecting investor concerns regarding sustained growth and profitability in the face of fierce competition and challenging market conditions. The overall mood in the video game market further exacerbates these issues, contributing to uncertainty over not just Roblox's future but the industry's trajectory as a whole.