Roblox is gaining users and brand partnerships—but growing revenue would be great

The news: Roblox stock dropped 17% on account of weaker-than-expected Q2 earnings.

  • The company reported net bookings of $639.9 million in Q2, down from $665.5 million in the same period last year. Analysts were expecting the company to achieve $644.4 million, per Refinitiv.
  • Bookings are a key measure of a company like Roblox’s health, since it goes beyond what a company was able to recognize. These bookings include virtual currency that can be used by players in the future—thus implying future engagement with the platform.

The bright spot: The platform’s fun! User interest is certainly still there.

  • Roblox’s daily active user (DAU) count reached 52.2 million, jumping 21% over Q2 2021.
  • The gaming leader also said its bookings rose in July, which would suggest a positive outlook for Q3. That contrasts sharply with its disappointing first-quarter earnings, when leadership said bookings were down in April, the first month of Q2.

Zoom out: This comes at a time when Roblox is actively courting brands.

  • Brands such as Clarks, Spotify, and Chipotle have all recently experimented with Roblox experiences.
  • Gucci recently opened a persistent experience on the younger-skewing platform, which received more than 30 million visits since March, CEO Dave Baszucki said on the Roblox earnings call.

The big takeaway: Average bookings for each DAU dropped to $12.25, 21% lower than last year. Roblox isn’t going anywhere anytime soon, but it does need to figure out how to monetize its user base.

  • The company’s 17- to 24-year-old user base is passing its 9- to 12-year-old cohort, Baszucki shared on the call—which could encourage more brands to advertise on the platform.

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