Roblox stock moves higher as earnings show bookings acceleration

By Emily Bary

Company posted a wider first-quarter loss than analysts were expecting

Shares of Roblox Corp. were advancing 5% in morning trading Wednesday after the gaming company saw losses swell in the first quarter -- but exceeded expectations with its billings performance.

The company reported a net loss of $268.3 million, or 44 cents a share, compared with a loss of $160.2 million, or 27 cents a share, in the year-earlier period. Analysts tracked by FactSet were expecting a 35-cent loss per share.

Revenue at Roblox (RBLX) increased to $655.3 million from $537.1 million, while the FactSet consensus was for $643.3 million.

Chief Executive David Baszucki said on the earnings call that Roblox expects to "make a small amount of advertising revenue" in the second quarter as it's currently testing its advertising system with over 200 participating developers.

Bookings rose to $773.8 million from $631.2 million, while analysts tracked by FactSet were projecting $767.7 million. Roblox defines bookings as revenue plus the change in deferred revenue during a period and says that "substantially all" of its bookings come from sales of virtual currency.

Bookings grew 22.6% in the March quarter relative to the year before, compared with 16.7% growth in the December quarter.

"We're focusing on driving bookings growth with innovation," Baszucki said on the call. "Behind that bookings growth, we have an enormous focus on operational excellence and efficiency."

Average bookings per daily active user came in at $11.70, flat with year-earlier levels.

Average daily active users rose to 66.1 million, up 22% from a year before. Users spent 14.5 billion hours engaged on Roblox's platform, up 23% from a year prior.

"Now that we are generating high rates of year-over-year bookings growth, we can now moderate our rate of investment in headcount and infrastructure thereby generating operating leverage," Chief Financial Officer Michael Guthrie said in a release. "We also expect to see more of our bookings processed through credit cards and prepaid cards which will also have a positive impact on margins."

Shares of Roblox have gained 34% so far this year, as the S&P 500 has logged a 7% increase.

-Emily Bary

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05-10-23 1120ET

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