Roblox (RBLX) up +10% on earnings beating expectations

Online gaming company Roblox has released it’s first Q1 earnings report on monday as a public company.

Here are some pinpoints:

  • Revenue increased 140% over Q1 2020 to $387.0 million
  • Net Loss for Q1 2020 was $134.2 million
  • Net cash provided by operating activities increased nearly 4x over Q1 2020 to $164.5 million (including one-time direct listing expenses of $51.9 million). Exclusive of one-time expenses related to our direct listing, net cash provided by operating activities would have been $216.4 million.
  • Bookings increased 161% over Q1 2020 to $652.3 million
  • Free Cash Flow increased 4.1x over Q1 2020 to $142.1 million
  • Average Daily Active Users (DAUs) were 42.1 million, an increase of 79% year over year driven by:
    • 87% growth in DAUs outside of the US/Canada
    • 111% growth in DAUs over the age of 13
  • Hours Engaged were 9.7 billion, an increase of 98% year over year primarily driven by:
    • 104% growth in engagement in markets outside of the US/Canada
    • 128% growth from users over the age of 13
  • Average Bookings per DAU (ABPDAU) was $15.48, an increase of 46% year over year

In Q1, the business saw a significant increase in player interest, with players spending a total of 9.7 billion hours playing the game. The business posted 42.1 million daily active users in Q1, up 79 percent year over year, thanks to a 111 percent increase in daily active users over the age of 13.

“Our first quarter 2021 results enabled us to continue investing aggressively in the key areas that we believe will drive long term growth and value, specifically hiring talented engineering and product professionals and growing the earnings for our developer community, We believe we must continue to innovate and so remain focused on building great technology to make progress on our key growth vectors, primarily international expansion and expanding the age demographic of our users.” 
Roblox CFO – Michael Guthrie 

Roblox is a one-of-a-kind computer game studio. Unlike gaming behemoths Activision Blizzard (ATVI), Electronic Arts (EA), and TTWO (TTWO), who invest millions in developing and publishing games, Roblox depends on a 7-million-strong army of user-creators to flesh out the titles using Roblox’s own custom design elements.

Roblox allows players to build their own personalized avatars, which they can then use in games made by other players. Racing games, shooters, and even games that allow you to experience historical events and locations such as the Titanic’s sinking are among them.

Users that create material for the site benefit from the selling of their works to other players. Robux, a digital currency equivalent to $0.0035, is used by players to purchase in-game goods, character costumes, and other items. In the meantime, developers get 70% of the Robux that players expend in their games.

According to Roblox, 1,050 developers have raised at least $10,000, with another 250 earning $100,000 or more.

According to the company’s S-1 filing, top-line growth was solid, but losses were growing rapidly. In 2020, revenue increased by almost 82 percent year over year to $923.9 million. However, for the year ended December 31, 2020, the net loss attributable to common stockholders increased to $253.3 million, up from $71.1 million in 2019.

The company’s free cash flow remained impressive, improving from $14.9 million in 2019 to $411.2 million in 2020.