Executive Summary

Q2 2025 showed strong platform momentum: Bookings $1.44B (+51% YoY), DAUs 111.8M (+41% YoY), Hours 27.4B (+58% YoY), and record 23.4M average monthly unique payers; ABPDAU rose to $12.86 (+7% YoY) .
GAAP revenue was $1.08B and diluted EPS was $(0.41); revenue and EPS missed S&P Global consensus (Revenue $1.27B*, EPS $(0.383)*), while management emphasized bookings and cash flow as primary value drivers .
FY25 guidance raised: Revenue $4.39–$4.49B, Bookings $5.87–$5.97B, Operating Cash Flow $1.335–$1.395B, FCF $1.025–$1.085B; net loss widened and Adjusted EBITDA guided to $(5)–$55M due to revenue deferrals and immediate OpEx recognition .
Catalyst: outsized growth from viral hits (e.g., “Grow a Garden”) and broad-based ecosystem strength, plus raised bookings/FCF outlook; watch near-term profitability (higher DevEx, cloud costs) and management’s conservative H2 assumptions .

What Went Well and What Went Wrong

What Went Well

Platform scale and monetization: Bookings $1.44B (+51% YoY), DAUs 111.8M (+41% YoY), Hours 27.4B (+58% YoY), ABPDAU $12.86 (+7% YoY) . CEO: “broad-based strength across the Roblox platform, fueled by the emergence of several viral experiences” .
User and payer metrics: Average monthly unique payers hit a new all-time record of 23.4M (+42% YoY); ABPMUP $20.48; 13+ DAUs up 54% and 13+ Hours up 72% YoY; 13+ now 64% of DAUs and 66% of Hours .
Guidance raised meaningfully: FY25 bookings raised to $5.87–$5.97B (from $5.285–$5.36B in Q1); FY25 OCF raised to $1.335–$1.395B and FCF to $1.025–$1.085B .

Selected quotes:

“Our Q2 2025 results demonstrate broad-based strength… We are encouraged by the momentum across Roblox as we look to capture 10% of the global gaming content market” — CEO David Baszucki .
“This exceptional topline growth, coupled with improving margins, excellent cash flow generation, and our strong balance sheet, positions us to continue investing in long-term, durable growth” — CFO Naveen Chopra .
“More than 75% of Grow a Garden’s DAUs engaged with at least one additional experience on the day they played” — reinforcing ecosystem spillovers .

What Went Wrong

Profitability pressure: Net loss widened to $(279.8)M (vs. $(207.2)M LY) and Adjusted EBITDA fell to $18.4M (vs. $66.5M LY) as OpEx (developer exchange, infra, personnel) outpaced recognized revenue under GAAP deferrals .
Cost intensity: Certain infrastructure and trust & safety expenses rose to $152.6M (+25% YoY; +14% QoQ) and developer exchange fees to $316.4M (+52% YoY), reflecting higher engagement and creator economics .
Near-term guidance signals negative EBITDA in Q3: Q3 Adjusted EBITDA guided to $(58)–$(28)M, with management embedding conservatism around viral normalization and Q4 visibility .

Financial Results

Headline Financials (Actuals)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$988.2	$1,035.2	$1,080.7
Bookings ($USD Millions)	$1,361.6	$1,206.7	$1,437.6
Net Loss ($USD Millions)	$(221.1)	$(216.3)	$(279.8)
Diluted EPS ($)	$(0.33)	$(0.32)	$(0.41)
Adjusted EBITDA ($USD Millions)	$65.6	$58.0	$18.4
Operating Cash Flow ($USD Millions)	$184.5	$443.9	$199.3
Free Cash Flow ($USD Millions)	$120.6	$426.5	$176.7

Notes: Q1 OCF/FCF benefitted from a $30M payment timing; Q2 included the delayed payout (management provides adjusted figures in letters) .

KPIs

KPI	Q4 2024	Q1 2025	Q2 2025
Average DAUs (Millions)	85.3	97.8	111.8
Hours Engaged (Billions)	18.7	21.7	27.4
Average Monthly Unique Payers (Millions)	18.9	20.2	23.4
ABPDAU ($)	$15.97	$12.34	$12.86

Q2 2025 vs. S&P Global Consensus

Metric	S&P Global Consensus*	Actual	Beat/Miss
Revenue ($USD Billions)	$1.2702*	$1.0807	Miss
Primary EPS ($)	$(0.383)*	$(0.41)	Miss

Values retrieved from S&P Global.*

Context: Management steers investors to bookings and cash flow given revenue deferrals; bookings outperformed (+51% YoY) and FY bookings/FCF guidance was raised .

Guidance Changes

Metric	Period	Previous Guidance (Q1’25)	Current Guidance (Q2’25)	Change
Revenue ($B)	Q3 2025	—	$1.11–$1.16	New
Bookings ($B)	Q3 2025	—	$1.59–$1.64	New
Net Loss ($M)	Q3 2025	—	$(396)–$(366)	New
Adjusted EBITDA ($M)	Q3 2025	—	$(58)–$(28)	New
OCF ($M)	Q3 2025	—	$415–$445	New
Capex ($M)	Q3 2025	—	$(85)	New
FCF ($M)	Q3 2025	—	$330–$360	New
Revenue ($B)	FY 2025	$4.29–$4.365	$4.39–$4.49	Raised
Bookings ($B)	FY 2025	$5.285–$5.36	$5.87–$5.97	Raised
Net Loss ($B)	FY 2025	$(1.037)–$(0.977)	$(1.261)–$(1.201)	Lower (more loss)
Adjusted EBITDA ($M)	FY 2025	$205–$265	$(5)–$55	Lower
OCF ($B)	FY 2025	$1.170–$1.215	$1.335–$1.395	Raised
Capex ($M)	FY 2025	$(285)	$(310)	Raised
FCF ($B)	FY 2025	$0.885–$0.930	$1.025–$1.085	Raised

Management notes the accounting deferral of bookings to revenue and immediate OpEx timing drive lower FY net income/Adjusted EBITDA despite stronger bookings and cash flow .

Earnings Call Themes & Trends

AI/Technology & 3D Generation | Launched Cube 3D, AI in discovery/safety; improved app performance and infra; roadmap to support more genres | Cube 3D inference now ~7–8x faster; ~1M 3D assets generated; continued safety AI (RoGuard 1.0) | Accelerating adoption/impact |
Discovery & Ecosystem | AI-powered discovery boosted breadth; spending growth expanding into ranks 11–50 | Algorithmic discovery helped viral titles; >75% of “Grow a Garden” DAUs tried another experience same day | Strengthening flywheel |
Ads & Monetization | Announced Google Ad Manager partnership; rewarded video ads to scale | Rewarded video in beta with Google; ~100 publishers onboarded; broader eligibility | Early rollout gaining traction |
Regional/APAC | Focus on translation/infrastructure; constant currency growth | APAC bookings +75% YoY; infra/translation upgrades cited for Japan; strong growth in SE Asia | Robust acceleration |
Creator Economics | DevEx rising; differential pricing and price optimization introduced | DevEx $316.4M (+52% YoY); Creator Rewards replaces legacy payouts; IP License Manager with major partners | Bigger share to creators |
Profitability & Costs | Margin improvements YoY, tight OpEx in Q4’24 | Q3 Adj. EBITDA guided negative; infra and DevEx up with engagement | Near-term pressure vs scale |

Management Commentary

CEO on growth drivers: “Our community has produced solid growth in Q2, several viral hits, great velocity on new content… In Q2 2025, we had revenue of $1.1 billion… bookings were $1.4 billion, up 51% year-on-year” .
CFO on ecosystem breadth: “More than half the growth in experience spend came from non-top 10 titles… top 1,000 creators averaged nearly $1M; top 10,000 averaged >$110k over last 12 months” .
On guidance tone: “Momentum continued in July… but we conservatively assume viral hits normalize in Q3 and embed additional conservatism in Q4 given typical late-quarter bookings concentration” .
On ads: “We… expanded eligibility of who can access [rewarded video] beta… strong continued pickup… ~100 publishers onboarded” .
On safety/AI: Launched Trusted Connections, expanded privacy controls, and RoGuard 1.0 for LLM guardrails in July to foster safe interactions .

Q&A Highlights

Capacity and infra spend: Blend of bare metal with cloud “burst mode” to handle >30M concurrent users and viral spikes (e.g., >20M concurrent in Grow a Garden) without overbuilding CapEx .
Developer ecosystem breadth: Significant rotation in top titles driven by discovery plus broad-based spend growth; intent to shift more economics to creators over time .
APAC growth: Gains tied to improved translation quality and added regional server capacity; cited Japan unlocks and strong SE Asia momentum .
Creator Rewards and discovery: New program aligns payouts to organic traffic and audience expansion; discovery optimized for long-term ecosystem health; sponsored tiles to expand with better targeting .
Viral sustainability: Early signals suggest stickiness for Grow a Garden (social play, strong retention, live ops), but guidance assumes normalization for prudence .

Estimates Context

Q2 2025 revenue and EPS missed S&P Global consensus (Revenue $1.27B*, EPS $(0.383)*) versus actual Revenue $1.0807B and EPS $(0.41) .
Management priority remains bookings and cash flow: Bookings +51% YoY to $1.4376B, OCF $199.3M and FCF $176.7M; FY bookings/OCF/FCF guidance raised materially .
Expect further sell-side focus on bookings trajectory, FY FCF raise, and near-term EBITDA headwinds from timing mismatches in revenue recognition and OpEx .