Youth-centric video game platform Roblox on Thursday beat estimates for the first quarter but guided below views for the current quarter and full year. Roblox stock plummeted on the news.
The San Mateo, Calif.-based company lost 43 cents a share on bookings of $923.8 million in the March quarter. Analysts polled by FactSet had expected Roblox to lose 53 cents a share on bookings of $919 million. In the year-earlier quarter, Roblox lost 44 cents a share on bookings of $774 million.
The company has been investing heavily to build out its version of the metaverse, a 3D virtual space for people to socialize and play games. Roblox online experiences range from gaming and social hangouts to concerts, sports, fashion shows, education and entertainment.
Based on the midpoint of its guidance, Roblox expects bookings in the second quarter of $885 million, vs. the consensus estimate of $929 million. For the full year, Roblox forecast bookings of $4.05 billion, which missed the target of $4.18 billion.
Roblox Stock Crashes After Report
On the stock market today, Roblox stock tanked 22.1% to 30.42.
Roblox reported 77.7 million average daily active users, up 17% year over year, in the first quarter. Analysts had expected 77.3 million.
Users spent 16.7 billion hours engaged with the platform in Q1, up 15%. But Wall Street had modeled 17.1 billion hours.
Average bookings per daily active user were $11.89 in the first quarter, up 2% year over year. However, analysts were looking for $12.10.
Roblox Volatile Around Earnings News
"Our teams have been hard at work identifying opportunities to drive DAUs (daily active users), hours, and bookings growth rates back to 20% year over year," Chief Executive David Baszucki said in a news release.
He added, "We began experimenting with changes in our AI-driven discovery algorithm and the positioning of various content types on the homepage. We reintroduced platform-wide events like 'The Hunt: First Edition.' And, we continued to improve the quality and performance of our app and experiences. Based on results since the middle of April, we believe that these steps are yielding positive results."
Roblox stock historically has been volatile after earnings reports, rising or falling by double-digit percentages.
Roblox stock has been consolidating for the past 57 weeks at a buy point of 47.65, according to IBD MarketSurge charts. Since the end of 2023, Roblox stock has twice approached that buy point but encountered resistance both times. The last time was after its fourth-quarter earnings report in early February.
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