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Roblox Corp (RBLX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was ahead of company guidance, with revenue $1.035B (+29% YoY), bookings $1.207B (+31% YoY), DAUs 97.8M (+26% YoY), and free cash flow $426.5M (+123% YoY); margin improved by 749 bps YoY, and cash flow benefitted from a $30M developer payment delayed to Q2 .
  • Versus Wall Street consensus, Roblox missed on revenue, beat on EPS, and significantly missed on EBITDA: revenue $1.035B vs $1.144B*, EPS $(0.32) vs $(0.39), EBITDA $(201)M vs $158M; bookings exceeded internal guidance, but revenue lagged consensus due to deferrals and FX .
  • Guidance raised for FY 2025 (revenue, bookings, OCF, FCF) and increased FY capex to support edge capacity; Q2 2025 guidance introduced with revenue $1.020–$1.045B and bookings $1.165–$1.190B .
  • Catalysts: broad-based content and genre expansion, Google Ads partnership ramp, AI-driven discovery and creation tools, and continued operating leverage; near-term headwinds include tougher H2 comps and FX .

What Went Well and What Went Wrong

  • What Went Well
    • Bookings strength and operating leverage: revenue +29% YoY and bookings +31% YoY; adjusted EBITDA of $58.0M above guidance; operating cash flow $443.9M (73–86% YoY growth adjusted for timing) .
    • Ecosystem health and monetization: more distributed spending (experiences ranked 11–50 doubled YoY share of growth), 100+ developers earned >$1M LTM, DevEx reached an all-time high $281.6M (+39% YoY) .
    • AI and product progress: introduced Cube 3D generative model, open-sourced mesh generation; AI improves search/discovery and moderation; price optimization yields median +4% developer earnings; regional pricing launched for game passes .
  • What Went Wrong
    • Revenue miss vs Street: reported revenue $1.035B below consensus $1.144B*, reflecting deferral dynamics and FX drag (-0.4% on revenue growth) .
    • EBITDA miss vs Street: GAAP EBITDA $(201)M vs consensus $158M*, highlighting higher deferrals and investment pace despite adjusted EBITDA beat .
    • Headwinds ahead: tougher year-over-year comps in H2 (especially Q3), FX, and increased FY capex ($285M) to meet edge capacity demand .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$919.0 $988.2 $1,035.2
YoY Growth (%)29% 32% 29%
Net Loss Per Share (Basic & Diluted, $USD)$(0.37) $(0.33) $(0.32)
Loss from Operations ($USD Millions)$(278.9) $(244.7) $(254.7)
Adjusted EBITDA ($USD Millions)$55.0 $65.6 $58.0
Bookings ($USD Millions)$1,128.5 $1,361.6 $1,206.7
Cash from Operations ($USD Millions)$247.4 $184.5 $443.9
Free Cash Flow ($USD Millions)$218.0 $120.6 $426.5

KPIs

KPIQ3 2024Q4 2024Q1 2025
DAUs (Millions)88.9 85.3 97.8
Hours Engaged (Billions)20.7 18.7 21.7
Average Monthly Unique Payers (Millions)19.1 18.9 20.2
ABPMUP ($USD)$19.70 $23.97 $19.92
ABPDAU ($USD)$12.70 $15.97 $12.34

Regional Snapshot (Q1 2025)

RegionDAUs YoYHours YoYRevenue YoYBookings YoY
U.S. & Canada+22% +27% +27% +31%

Estimates vs Actuals (Q1 2025)

MetricActualConsensus
Revenue ($USD Millions)$1,035.2 $1,144.4*
EPS (Primary, $USD)$(0.32) $(0.39)*
EBITDA ($USD Millions)$(201.0) $158.2*
Values with asterisk retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$4,245–$4,345 $4,290–$4,365 Raised
Bookings ($USD Millions)FY 2025$5,200–$5,300 $5,285–$5,360 Raised
Adjusted EBITDA ($USD Millions)FY 2025$190–$265 $205–$265 Raised low end
Net Cash from Ops ($USD Millions)FY 2025$1,050–$1,110 $1,170–$1,215 Raised
Capital Expenditures ($USD Millions)FY 2025$250 $285 Raised
Free Cash Flow ($USD Millions)FY 2025$800–$860 $885–$930 Raised
Revenue ($USD Millions)Q2 2025—$1,020–$1,045 New
Bookings ($USD Millions)Q2 2025—$1,165–$1,190 New
Adjusted EBITDA ($USD Millions)Q2 2025—$25–$45 New
Net Cash from Ops ($USD Millions)Q2 2025—$160–$175 New
Capital Expenditures ($USD Millions)Q2 2025—$55 New
Free Cash Flow ($USD Millions)Q2 2025—$105–$120 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI creation & moderationLaunched Roblox Assistant; open-sourced voice model; 200+ ML pipelines 200+ ML models; Assistant fully launched Cube 3D foundational model; 1,500 experiences experimenting; voice model updated; 300+ ML models Accelerating
Search & discoveryAI-driven personalization; Today’s Picks; broader distribution Transparent signals; ecosystem health Discovery pushing broader spending; signals shared with creators Strengthening
Pricing & monetizationDynamic price floors; in-experience optimization Differential Robux pricing; higher share economics Price optimization median +4%; regional pricing; differential pricing early but positive Positive
Ads & brandsNFL Universe; DoubleVerify partnership Ads growing; not yet broken out Google Ad Manager partnership; rewarded video; measurement partners (DV, IAS, Kantar, Nielsen) Scaling
Geography & demographicsNon-console bookings +28% YoY; console 8% of bookings Lapping console; strong US/Canada; Turkey impact US/Canada strong; 13+ DAUs 62% of base, faster growth Aging up; broad
Macro sensitivity—Low-cost entertainment; cautious outlook Minimal macro impact historically; innovation not required to “power through” macro Resilient tone

Management Commentary

  • “In Q1 2025, all of our results were above the guidance we provided on our Q4 2024 earnings call… investments in the virtual economy and search and discovery are driving growth in platform monetization, bookings, and creator earnings.” — David Baszucki, CEO .
  • “We continued to deliver high rates of improvement in margins… Cash flow from operations and free cash flow both reached record levels, grew year-over-year at high rates, and exceeded our prior guidance.” — Michael Guthrie, CFO .
  • “Differential pricing… is pretty early… so far so good, but very much early days.” — Michael Guthrie (on margin impact trajectory) .
  • “Cube 3D… allowing creators to generate intricate 3D assets from simple text prompts in mere seconds… a version of Cube 3D’s mesh generation model has been open-sourced.” — Shareholder letter .

Q&A Highlights

  • Genre expansion and long-term roadmap: Focus on RPG, sports/racing, and battle; single-build tech across low-end Android to high-end PC; economics and discovery to support developers .
  • Differential pricing and payments mix: Early innings; organic shift to desktop/gift cards; gift cards offer ~25% more Robux vs mobile native .
  • Macro sensitivity: Historically limited impact; Roblox as low-cost entertainment; innovation drives long-term share gain but not necessary to withstand macro .
  • Ads rollout and reinvestment: Google integration underway; ads not yet material enough to break out; reinvestment priorities include creator payouts and margin improvement while reducing processing, infra, and trust & safety costs intensity .
  • Margin trajectory: Multi-quarter step-up delivered; guidance implies continued improvement, but not 700+ bps annually; cash flow growth to exceed bookings growth .

Estimates Context

  • Revenue missed consensus: actual $1.035B vs $1.144B*; bookings strength offset by revenue recognition timing and FX (-0.4% on revenue growth) .
  • EPS beat: $(0.32) vs $(0.39)* driven by operating leverage and cost efficiencies despite elevated stock-based comp .
  • EBITDA miss: GAAP EBITDA $(201)M vs $158M* due to deferrals and investment in growth vectors; adjusted EBITDA of $58M beat internal guidance .
    Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Bookings momentum and operating leverage remain robust; Q1 beat vs internal guidance and raised FY 2025 outlook support medium-term compounding despite tougher H2 comps .
  • Revenue miss vs Street was primarily a function of deferrals and FX; watch bookings (primary operating metric) and deferral changes to gauge future revenue conversion .
  • Ads are a call option; Google partnership and measurement integrations lay groundwork for a 2025–2026 ramp, but core economics remain driven by virtual economy and content cadence .
  • Pricing tools (differential Robux, price optimization, regional pricing) are improving creator earnings and potentially margins over time; track desktop/gift card mix shift .
  • Aging-up continues (13+ now 62% DAUs and 64% hours); genre expansion into mid-core categories should support monetization per user and per hour over time .
  • Capex raised to $285M FY to support edge capacity; sustained free cash flow growth (FY FCF $885–$930M) underscores liquidity strength ($4.51B cash & investments; net liquidity $3.50B) .
  • Near-term trading: narratives likely pivot to bookings trajectory and margin durability vs consensus, and the pace of ad revenue ramp; H2 comps and FX are key risk monitors .

Bolded beats/misses and surprises

  • Revenue missed Street; EPS beat; EBITDA significantly missed Street in Q1 2025 (see Estimates vs Actuals table) .
  • FY 2025 guidance raised across revenue, bookings, OCF, and FCF; FY capex increased to support gameplay capacity .
  • Broad-based spending and content cadence outside top 10 experiences strengthened ecosystem health and long-tail monetization .