Roblox Corporation (RBLX) reports better-than-expected losses and 37% net cash rise in Q1 earnings

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Today, global online gaming platform Roblox Corporation released its Q1 2024 financial results before US markets opened.

As one of the most widely used gaming platforms in the United States, and one of the most aggressively growing ones worldwide, Roblox has enormous potential – and investor excitement – built up for the 2024 year.

Roblox has previously announced its intentions to penetrate other demographics and markets of an older age than the tweens it’s usually associated with, referring to a large-scale networking and dating platform capability it is building – which could mean massive untapped potential.

Also, ‘Robux’, Roblox’s virtual in-game currency system, continues to hold massive potential for in-game purchase streams of income for the company, and be the scourge of parents’ wallets everywhere.

The financial results today

The Roblox Corporation reported that net loss attributable to common stockholders was $270.6 million, while consolidated net loss was $271.9 million.

However, revenue was at $801.3 million, up 22% year-over-year.

This was partially due to the fact that Average Daily Active Users were 77.7 million, up 17% year-over-year.

Perhaps most encouragingly, Roblox’s net cash and cash equivalents provided by operating activities was $238.9 million, up 37% year-over-year, while free cash flow was $191.1 million, up 133% since Q1 2023.

Meanwhile, the company also reported adjusted EBITDA at a loss of $6.9 million.

Expectations ahead of earnings

In this quarter, analysts very much hoped to see a lessening of the net losses experienced by Roblox so far, and were bullish on rising revenues of around $930 million.

Then there’s Roblox’s own expectations. In its Q4 2023 results release, Roblox provided the following Q1 2024 guidance:

Revenue between $755 million and $780 million.
Bookings between $910 million and $940 million.
Consolidated net loss between $347 million and $342 million.
Adjusted EBITDA loss of between $55 million and $50 million, which includes:
Increase in deferred revenue between $158 million and $163 million.
Increase in deferred cost of revenue between a $33 million and $35 million loss.

Previous results: a comparison

Roblox reported a net loss of over $323 million last quarter, despite otherwise encouraging numbers like a massive increase in users and sustained loyalty from existing ones, plus a 30% rise in revenue in Q4 as well.

Compared to these Q1 financial results of 2023, the quarter was better than expected in many ways.

The Q1 2023 financial results were:

Revenue was $655.3 million, up 22% year-over-year, and up 24% year-over-year on a constant currency basis
Bookings were $773.8 million, up 23% year-over-year, and up 25% year-over-year on a constant currency basis
Net loss attributable to common stockholders was $268.3 million
Net cash provided by operating activities was $173.8 million
Average Daily Active Users (‘DAUs’) were 66.1 million, up 22% year-over-year
Hours engaged were 14.5 billion, up 23% year-over-year
Average bookings per DAU was $11.70, flat year-over-year

Meanwhile, the previous quarter (Q4 of 2023) had the following results:

Revenue was $749.9 million, up 30% year-over-year.
Bookings were $1,126.8 million, up 25% year-over-year.
Net loss attributable to common stockholders was $323.7 million.
Net cash provided by operating activities was $143.3 million, up 20% year-over-year.
Average Daily Active Users (‘DAUs’) were 71.5 million, up 22% year-over-year.
Average monthly unique payers were 15.9 million, up 18% year-over-year, and average bookings per monthly unique payer was $23.65, up 6%.
Hours engaged were 15.5 billion, up 21%year-over-year.
Average bookings per DAU was $15.75, up 3% year-over-year.
Net liquidity was $2.2 billion; Covenant Adjusted EBITDA was $259.6 million, up 42% year-over-year.

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