Executive Summary

Q3 delivered outsized topline and user growth: revenue $1.36B (+48% YoY, +26% QoQ), bookings $1.92B (+70% YoY), DAUs 151.5M (+70% YoY), hours 39.6B (+91% YoY); operating cash flow $546.2M (+121% YoY) and free cash flow $442.6M (+103% YoY) .
Management raised FY25 guidance materially: bookings to $6.57–$6.62B (from $5.87–$5.97B), revenue to $4.83–$4.88B (from $4.39–$4.49B), OCF to $1.61–$1.64B (from $1.34–$1.40B), and FCF to $1.15–$1.18B (from $1.03–$1.09B); CapEx raised to $468M to support safety/AI and infrastructure .
Versus S&P Global consensus for Q3: EPS beat (-$0.37 vs -$0.51 est), while GAAP revenue missed ($1.36B vs $1.70B est); S&P “EBITDA” also missed (actual -$241.2M vs $429.5M est)*. Note: Roblox emphasizes bookings (non-GAAP) which rose 70% YoY and are primarily deferred into future revenue recognition .
Key drivers: multiple viral hits (Grow a Garden, Steal a Brainrot, 99 Nights in the Forest), record 45M peak concurrency, stronger 13+ cohorts and international expansion; discovery/creator economics improvements and regional pricing aided payer growth .
Watch items: near‑term cost intensity from cloud burst/AI and higher DevEx; 2026 commentary flags tough comps and safety rollouts that may pressure margins slightly as investments catch up to growth .

What Went Well and What Went Wrong

What Went Well

Broad-based platform momentum: DAUs 151.5M (+70% YoY), hours 39.6B (+91% YoY), MUPs 35.8M; viral titles plus engagement outside top-10 (+58% YoY) underpin ecosystem health .
Monetization and cash generation: bookings $1.92B (+70% YoY), OCF $546.2M (+121% YoY), FCF $442.6M (+103% YoY); average bookings per DAU increased in every region YoY .
Strategic narrative: “tremendous progress… toward our goal of capturing 10% of the global gaming market” and establishing a “gold standard for communication safety,” with 13B+ hours/month data fueling AI world models (Cube 4D) .

What Went Wrong

Profitability optics: consolidated net loss widened to -$257.4M YoY and Adjusted EBITDA declined to $45.7M as operating costs are recognized immediately while revenue is deferred (27-month paying user life) .
Cost pressures: infrastructure and trust & safety expenses rose to $321.4M (+25% QoQ, +31% YoY), driven by third‑party cloud burst to support record concurrency; cost of revenue at 21.8% of revenue .
Mix effects: rapid international payer growth diluted ABPMUP even as U.S./Canada ABPMUP grew >10% YoY; near‑term friction possible from new safety policies .

Financial Results

Income Statement and Cash Flow (USD Millions, except per-share)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue	$1,035.2	$1,080.7	$1,359.6
Bookings (non‑GAAP)	$1,206.7	$1,437.6	$1,921.8
Loss from Operations	-$254.7	-$322.5	-$296.5
Net Loss	-$216.3	-$279.8	-$257.4
Diluted EPS	-$0.32	-$0.41	-$0.37
Adjusted EBITDA (non‑GAAP)	$58.0	$18.4	$45.7
Operating Cash Flow	$443.9	$199.3	$546.2
Free Cash Flow	$426.5	$176.7	$442.6

Notes: Adjusted EBITDA excludes net increase in deferred revenue & deferred COGS of $147.1M (Q1), $301.5M (Q2), and $457.9M (Q3) .

User, Engagement, and Cost KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Average DAUs (Millions)	97.8	111.8	151.5
Hours Engaged (Billions)	21.7	27.4	39.6
Monthly Unique Payers (Millions)	20.2	23.4	35.8
Developer Exchange Fees ($)	$281.6	$316.4	$427.9
Infrastructure & Trust/Safety ($)	$242.1	$260.7	$321.4

Q3 2025 Actual vs S&P Global Consensus

Metric	Actual Q3 2025	S&P Consensus Q3 2025
Revenue	$1.36B	$1.70B*
Primary EPS	-$0.37	-$0.51*
EBITDA (S&P definition)	-$241.2M*	$429.5M*

Values with asterisk are retrieved from S&P Global.*

Guidance Changes

Metric	Period	Previous Guidance (7/31/25)	Current Guidance (10/30/25)	Change
Revenue	FY 2025	$4.39B–$4.49B	$4.826B–$4.876B	Raised
Bookings (non‑GAAP)	FY 2025	$5.87B–$5.97B	$6.566B–$6.616B	Raised
Consolidated Net Loss	FY 2025	-$1.261B to -$1.201B	-$1.129B to -$1.099B	Improved
Adjusted EBITDA	FY 2025	-$5M to $55M	$102M–$132M	Raised
Operating Cash Flow	FY 2025	$1.335B–$1.395B	$1.614B–$1.644B	Raised
Capital Expenditures	FY 2025	$310M	$468M	Raised (growth investment)
Free Cash Flow	FY 2025	$1.025B–$1.085B	$1.146B–$1.176B	Raised
Revenue	Q4 2025	—	$1.35B–$1.40B	New
Bookings (non‑GAAP)	Q4 2025	—	$2.00B–$2.05B	New
Consolidated Net Loss	Q4 2025	—	-$375M to -$345M	New
Adjusted EBITDA	Q4 2025	—	-$20M to $10M	New
Operating Cash Flow	Q4 2025	—	$425M–$455M	New
Capital Expenditures	Q4 2025	—	$325M	New
Free Cash Flow	Q4 2025	—	$100M–$130M	New

Management noted CapEx uplift reflects demand surge and strategic investments in safety and AI; 2026 CapEx likely roughly flat vs 2025 .

Earnings Call Themes & Trends

Topic	Prior 2 Quarters (Q1–Q2 2025)	Q3 2025 (Current)	Trend
AI / Creation	Introduced Cube 3D; open-sourced mesh model; accelerating 3D object generation 7–8x; AI safety tools (RoGuard)	400+ AI systems; “Cube 4D” real‑time multiplayer generation; building world models from 13B+ hours/month; deploying GPUs in own DCs	Expanding scope and infra commitment
Safety & Ratings	New tools (Trusted Connections), parental controls; safety voice classifier	Plan to require facial age estimation for comms; adopt IARC; limit adult–minor comms; potential short‑term engagement headwinds	Stricter standards, nearer‑term friction
Discovery & Content Velocity	Algorithmic transparency; thumbnails personalization; rising share of new titles in Top 100; spend in ranks 11–50 up sharply	Moments beta; 20% more unique experiences surfaced per 1M recs; focus on long‑term ecosystem health signals	Broadening discovery surfaces
Infrastructure & Scale	32M peak concurrency; cloud burst complementing owned infra	45M peak concurrency; GPUs at scale; more edge DCs; near‑term cost‑to‑serve improvements harder	Scaling aggressively; cost intensity near term
Creator Economics	Price optimization; regional pricing; Creator Rewards program	DevEx rate +8.5%; $427.9M DevEx (+85% YoY); creators >$1B in 9 months	More value to creators; higher DevEx mix
Advertising	Rewarded Video in beta w/ Google; early brand demand	>140 creators onboarded; cautious near term, long‑term bullish	Gradual build
Geography & Mix	Intl DAUs/bookings outpacing U.S./Canada	APAC led hours/bookings; mix shift dilutes ABPMUP; U.S./Canada ABPMUP >10% YoY	International acceleration with mix impact

Management Commentary

“Our third-quarter results demonstrate the tremendous progress we’ve made toward our goal of capturing 10% of the global gaming market… We are raising our guidance for the remainder of 2025.” — David Baszucki, CEO .
“We estimate now that 3.2% of global gaming bookings or revenue is going through Roblox, up from 2.3% last year… peak concurrency 45 million in August.” — David Baszucki .
“Bookings have grown faster than our ability to deploy the appropriate growth investments… you’re going to see some slight margin compression as we catch up over the next few quarters.” — Naveen Chopra, CFO .
“New safety policies… may cause some short-term friction… operating margin could decline slightly in 2026 given… higher DevEx rates and… infrastructure and safety related investments.” — Management .

Q&A Highlights

AI roadmap and GPUs: “Real-time generation in-experience in multiplayer” via Cube 4D; building world models; deploying GPUs on owned metal with cloud burst to manage peaks .
Creator economics vs competitors: DevEx rate matters, but creators weigh rate × platform scale × tools/velocity; intent to prudently shift more dollars to creators while managing costs .
Older cohorts and genre expansion: Tech roadmap (server authority, custom matchmaking, avatar fidelity) targets shooters/sports/racing/RPGs; two‑thirds of DAUs are now 13+ .
2026 framing: Too early for numeric guidance; tough comps and safety rollouts could be headwinds; multiple tech tailwinds in H1’26 .
Ads/UA: Rewarded Video onboarding growing but near‑term contribution modest; exploring co‑funded paid acquisition with creators under disciplined ROAS .

Estimates Context

Q3 vs S&P Global: EPS beat (-$0.37 vs -$0.51 est), GAAP revenue missed ($1.36B vs $1.70B est), S&P EBITDA missed (actual -$241.2M vs $429.5M est)*. Roblox’s primary operating KPI (bookings) rose 70% YoY; revenue recognition defers most bookings over an estimated 27 months .
Forward estimates: Street models imply Q4 revenue ~$2.07B and FY25 ~$6.59B*, whereas management’s updated FY25 GAAP revenue outlook is $4.83–$4.88B reflecting deferral dynamics; expect consensus revisions to re-anchor on updated bookings/FCF and higher CapEx .
Values with asterisk are retrieved from S&P Global.*

Key Takeaways for Investors

Momentum is exceptional: DAUs, hours, bookings, OCF, and FCF all sharply higher, with multiple viral hits and healthier long‑tail engagement supporting durability .
FY25 outlook reset higher across bookings, revenue, OCF, and FCF; significant CapEx uplift underscores commitment to safety/AI and infra scaling .
Near‑term margin optics will be noisy (deferred revenue mechanics, rising DevEx/infra expense), but cash generation is strong and likely outgrows bookings into 2026 .
Mix shift toward 13+ and international is strategic, though ABPMUP dilution can persist; U.S./Canada monetization still improving .
Ads and commerce are call options; Rewarded Video is methodical near term with long‑term potential as tooling and demand mature .
2026: Tough comps and safety rollouts could modestly pressure margins; multiple tech launches (AI/genres) provide offsetting growth vectors .
Trading lens: Expect focus on bookings trajectory vs viral-hit “fade,” cash flow resiliency, and 2026 margin commentary; any signals of sustained genre expansion or ad monetization acceleration likely positive catalysts .

Notes on non‑GAAP: Bookings, Adjusted EBITDA, and Free Cash Flow are non‑GAAP; reconciliations to GAAP are provided in company materials .

S&P Global disclaimer: Values marked with an asterisk (*) are retrieved from S&P Global.

Roblox Corp (RBLX)·Q3 2025 Earnings Summary