Roblox (NYSE: $RBLX) Beats Earnings Estimates In Q4, Reports Records Bookings of Over $1B

Roblox Corporation (NYSE: $RBLX) is a video game developer based in San Mateo, CA. It is most famous for its popular Roblox gaming platform, which allows users to program and play games designed by other users using the propriety Roblox Studio engine. 

Since 2004, Roblox Corporation has provided tools to its developer community to build multiplayer games for mobile computers, consoles, and VR headsets. With over 200 monthly active users, Roblox is one of the world’s most popular online gaming platforms. 

Q4 Earnings Results 

Roblox reported better-than-expected fourth-quarter fiscal 2023 earnings results on Wednesday, February 7, 2024, driven by over $1 billion in record bookings. The company also beat revenue estimates, surpassing the Zacks Consensus Estimate by 4.75%, marking the third consecutive quarter of outperforming top-line consensus estimates. 

Roblox posted an adjusted loss per share of $0.52 for Q4, beating analysts’ estimates of a $0.57 loss. However, losses widened from the $0.48 loss in the previous year.   

The wider loss reflects Roblox’s ongoing investments in developers, infrastructure, and safety amid a challenging macro environment that has led to cost-cutting at many tech firms. 

Roblox recorded a revenue of $2.80 billion for the full year, a 26% increase from the last fiscal year. Full-year Bookings came in at $3.52 billion, a 23% Y/Y increase. The company recorded a net loss of $1.15 billion for the full year. Its net cash from operations came in at $58.2 million, a 24% Y/Y increase. 

Daily active users were 68.4 million for the full year, a 22% increase, while average bookings per DAU was $51.50, flat year-over-year. Average monthly unique players were up 17% Y/Y to 14.5 million, while the average books per monthly unique user increased 4% to $81.05. 

A Record $1B in Bookings 

The highlight of the quarterly results was Roblox crossing the $1 billion mark in quarterly bookings for the first time. Total bookings reached $1.1 billion, up 25% year-over-year, above estimates. It affirms the game maker’s popularity amongst Gen Zs amid stiff competition in the metaverse space. 

 Besides beating Wall Street’s estimates, Roblox’s platform usage metrics showed robust user growth. Daily active users (DAUs) hit record levels, reaching 71.5 million, a 22% surge from last year., while average bookings per DAU increased 3% Y/Y to $15.75. Average monthly unique users increased 18%  year-over-year to 15.9 million, while average bookings per monthly unique user increased 6% year-over-year to $23.65.

Industry Comparison 

Boyd Gaming (NYSE:$BYD) serves as a comparison from the Zacks Gaming industry, which ranks in the top 46 % of all the 250-plus industries tracked by Zacks. While Boyd Gaming is projected to see a 16.9 % year-over-year rise in EPS, the gaming industry faces a murky near-term outlook amid macroeconomic uncertainty. Roblox must demonstrate a viable path to profitability to regain its momentum. 

Upbeat Outlook Amid Economic Uncertainty  

Roblox issued cautious but upbeat guidance for fiscal 2024 amid macroeconomic headwinds. It expects revenue of $3.3 billion to $3.4 billion. Its Bookings forecast for the full year is between $4.14 billion and $4.28 billion. Roblox expects a consolidated net loss of $1.4 billion to $1.37 billion at the end of fiscal 2024. 

For the first quarter of fiscal 2024, Roblox expects revenue of $755 million to $780 million and Bookings of $910 million to $940 million. It forecasts a consolidated net loss of $347 million to $342 million. 

Roblox Corporation (NYSE: $RBLX) Stock Performance 

Roblox Corporation (NYSE: $RBLX) stock saw exceptional gains on Wednesday, February 7, 2024, jumping over 10% to close at $44.74, a single-day increase of $4.14 per share. Roblox’s stronger-than-expected fourth-quarter earnings report drove double-digit percentage stock growth, with investors reacting to record booking and accelerating user engagement.  

Roblox shares have shed 11.2% year-to-date, underperforming the S&P 500’s gain of 3.9% over the same period. The muted stock performance was due to concerns about the company’s growth trajectory and path to profitability.

Stock Price And Revenue Forecast 

Looking ahead, analysts expect Roblox will post a loss per share of $2.01 on $4.07 billion in revenue for fiscal 2024. In the coming quarter, they predict a net loss per share of $0.49 on revenues of $896.62 million. However, those estimates could change in the coming days based on Roblox’s recent results and 2024 guidance. 

The analysts have set a broad target for RBLX stock, with a high of $56 and a low of $21 for the stock in the next 12 months. The average price for the stock is $44.54, a 4.27% upside, and an overall moderate buy rating. 

Is It A Good Time To Buy Roblox Stock? 

While Roblox stock has been trending upwards since the release of its earnings report on Wednesday, February 7, 2024, the stock still carries some risk. For one, there is the risk of increased competition and macroeconomic headwinds that could eat away at its revenue. 

However, Roblox has proven its resilience over the years and has a chance to see growth as Web3 shapes up; the stock is likely to experience steady growth in revenue in the coming years.  The recent positive earnings report will likely give the stock renewed momentum that enterprising investors should take advantage of. 

Roblox is set to remain a top metaverse platform for the next generation, with booking surpassing the $1 billion mark. Its adeptness in navigating macroeconomic uncertainty could ensure that it emerges as one of the top players in the future of the beaten-down gaming sector. 

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