Roblox Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

Roblox (NYSE: RBLX) reported strong growth in Q2 2024, with revenue up 31% year-over-year to $893.5 million and bookings up 22% to $955.2 million. The company saw significant increases in key metrics:

- Daily Active Users (DAUs) reached 79.5 million, up 21% YoY
- Hours engaged hit 17.4 billion, up 24% YoY
- Average monthly unique payers grew 22% YoY to 16.5 million

Despite growth, Roblox reported a net loss of $207.2 million. However, the company's cash position improved, with net cash from operating activities up 433% YoY to $151.4 million and free cash flow of $111.6 million, compared to -$95.5 million in Q2 2023.

Positive

• Revenue increased 31% year-over-year to $893.5 million
• Bookings grew 22% year-over-year to $955.2 million
• Daily Active Users (DAUs) up 21% year-over-year to 79.5 million
• Hours engaged increased 24% year-over-year to 17.4 billion
• Average monthly unique payers grew 22% year-over-year to 16.5 million
• Net cash from operating activities up 433% year-over-year to $151.4 million
• Free cash flow improved to $111.6 million from -$95.5 million in Q2 2023

Negative

• Net loss of $207.2 million for the quarter
• Average bookings per DAU only increased 1% year-over-year to $12.01

Insights

Financial Analyst

Roblox's Q2 2024 financial results demonstrate robust growth across key metrics, signaling strong momentum for the company. Revenue surged 31% year-over-year to $893.5 million, while bookings increased 22% to $955.2 million. These figures underscore the platform's expanding user base and monetization efforts.

Particularly noteworthy is the significant improvement in cash flow. Net cash provided by operating activities skyrocketed 433% year-over-year to $151.4 million, while free cash flow turned positive at $111.6 million, compared to a negative $95.5 million in Q2 2023. This dramatic shift suggests enhanced operational efficiency and could potentially accelerate Roblox's path to profitability.

However, the company still reported a net loss of $205.9 million, which investors should monitor closely. The substantial cash reserves of $3.6 billion provide a strong financial cushion, but the focus should remain on narrowing losses while maintaining growth.

The update to the estimated paying user life from 28 to 27 months is an interesting development. While it resulted in a one-time boost to revenue and cost of revenue, it may indicate a slight decrease in user retention, which warrants attention in future quarters.

Market Research Analyst

Roblox's Q2 results reveal impressive user engagement metrics, painting a picture of a thriving platform ecosystem. Daily Active Users (DAUs) grew 21% year-over-year to 79.5 million, while hours engaged increased by 24% to 17.4 billion. These figures not only demonstrate Roblox's ability to attract new users but also to keep them engaged for longer periods.

The 22% increase in average monthly unique payers to 16.5 million is particularly significant. This growth, coupled with a slight increase in average bookings per DAU, suggests that Roblox is successfully converting its expanding user base into paying customers. The diversity of high-quality content, as mentioned by CEO David Baszucki, appears to be a key driver of this success.

However, it's worth noting that the average bookings per monthly unique payer decreased slightly to $19.34. While not alarming, this metric should be monitored to ensure that monetization efforts keep pace with user growth.

The platform's appeal across different age groups and geographies is a strong indicator of its potential for sustained growth. As Roblox continues to invest in its core platform and support its creator community, it's well-positioned to capitalize on the growing demand for interactive, user-generated content experiences.

Tech Expert

Roblox's Q2 2024 results highlight the company's successful execution of its platform strategy. The robust growth in both users and engagement metrics underscores the effectiveness of Roblox's user-generated content (UGC) model. This approach not only keeps development costs relatively low but also ensures a constant stream of fresh, diverse content that appeals to a wide audience.

The company's commitment to investing in its core platform to help creators build better and safer experiences is crucial. As the metaverse concept gains traction, Roblox's established position in immersive, social experiences could prove to be a significant competitive advantage. The focus on safety is particularly important, given the platform's popularity among younger users.

However, Roblox faces challenges in balancing growth with profitability. The continued net losses, despite strong revenue growth, suggest that scaling the business efficiently remains a hurdle. The company will need to carefully manage its investments in platform development and creator support to improve its bottom line without compromising growth.

The reduction in capital expenditures, combined with strong topline growth, is a positive sign. It indicates that Roblox is becoming more efficient in its operations and infrastructure management. If this trend continues, it could accelerate the company's path to profitability while maintaining its competitive edge in the rapidly evolving digital entertainment landscape.

Strong Growth Across Core Financial and Operating Metrics; Revenue¹ up 31% year-over-year, Bookings² up 22% year-over-year, record DAUs up 21% year-over-year and record Hours Engaged up 24% year-over-year

SAN MATEO, Calif.--(BUSINESS WIRE)-- Roblox Corporation (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, released its second quarter 2024 financial and operational results and issued its third quarter and updated full year 2024 guidance today. Separately, Roblox posted a letter to shareholders and supplemental materials on the Roblox investor relations website at ir.roblox.com.

Second Quarter 2024 Financial, Operational, and Liquidity Highlights¹

• Revenue was $893.5 million, up 31% year-over-year.
• Bookings² were $955.2 million, up 22% year-over-year.
• Net loss attributable to common stockholders was $205.9 million, while consolidated net loss was $207.2 million.
• Adjusted EBITDA² was $66.5 million, which excludes adjustments for increases in deferred revenue and deferred cost of revenue of $66.7 million and $(18.8) million, respectively, or a total change in deferred of $47.9 million.
• Net cash and cash equivalents provided by operating activities was $151.4 million, up 433% year-over-year, while free cash flow² was $111.6 million, compared to $(95.5) million in the second quarter of 2023.
• Average Daily Active Users (“DAUs”) were 79.5 million, up 21% year-over-year.
• Average monthly unique payers were 16.5 million, up 22% year-over-year, and average bookings per monthly unique payer was $19.34.
• Hours engaged were 17.4 billion, up 24% year-over-year.
• Average bookings per DAU was $12.01, up 1% year-over-year.
• Cash and cash equivalents, short-term investments, and long-term investments totaled $3.6 billion; net liquidity³ was $2.6 billion.

“Our strong Q2 growth across all core metrics is driven by diverse and high quality content. As a UGC platform, we support a large and motivated creator community that continues to thrive. The dynamic Roblox content ecosystem is unique and our platform continues to attract users of all ages from across the globe. Going forward, we will continue to invest in our core platform to help our creator community build better and safer experiences and reach more people,” said David Baszucki, founder and CEO of Roblox.

“The combination of strong topline growth, fixed cost discipline, and reduced capital expenditures allowed us to deliver significantly more cash flow in Q2 2024 than in Q2 2023. Net cash and cash equivalents provided by operating activities were $151.4 million in Q2 2024, up 433% from $28.4 million in Q2 2023. Free cash flow for the quarter was $111.6 million, an increase of $207.1 million over free cash flow of $(95.5) million in Q2 2023,” said Michael Guthrie, chief financial officer of Roblox.

1		At the onset of the second quarter of 2024, we updated our estimated paying user life from 28 months to 27 months. Based on the carrying amount of deferred revenue and deferred cost of revenue as of March 31, 2024, the change resulted in an increase in revenue and cost of revenue during the three months ended June 30, 2024 of $58.9 million and $12.4 million, respectively. Refer to “Basis of Presentation and Summary of Significant Accounting Policies — Revenue Recognition” as described in the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for further background on the Company’s process to estimate the average lifetime of a payer.
2		Bookings, Adjusted EBITDA, and free cash flow are non-GAAP financial measures that we believe are useful in evaluating our performance and are presented for supplemental information purposes only and should not be considered in isolation from, or as a substitute for, financial information presented in accordance with GAAP. For further information, please refer to definitions and reconciliations provided below and in our annual and quarterly SEC filings.
3		Net liquidity represents cash and cash equivalents, short-term investments, and long-term investments, less long-term debt, net.

Forward Looking Guidance⁴

Roblox provides its third quarter and updated full year 2024 GAAP and non-GAAP guidance:

Third Quarter 2024 Guidance

• Revenue between $860 million and $885 million.
• Bookings between $1,000 million and $1,025 million.
• Consolidated net loss between $(275) million and $(255) million.
• Adjusted EBITDA between $22 million and $42 million, which excludes adjustments for:
  • Increase in deferred revenue of $145 million.
  • Increase in deferred cost of revenue of $(32) million.
  • The total of these changes in deferrals of $113 million.
• Net cash and cash equivalents provided by operating activities between $147 million and $162 million.
• Capital expenditures and purchases of intangible assets of $(42) million.
• Free cash flow between $105 million and $120 million.

Updated Full Year 2024 Guidance

• Revenue between $3,490 million and $3,540 million.
• Bookings between $4,180 million and $4,230 million.
• Consolidated net loss between $(1,089) million and $(1,049) million.
• Adjusted EBITDA between $92 million and $132 million, which excludes adjustments for:
  • Increase in deferred revenue of $711 million.
  • Increase in deferred cost of revenue of $(163) million.
  • The total of these changes in deferrals of $548 million.
• Net cash and cash equivalents provided by operating activities between $685 million and $715 million.
• Capital expenditures and purchases of intangible assets of $(180) million.
• Free cash flow between $505 million and $535 million.

4

Beginning April 1, 2024, the estimated average lifetime of a payer changed from 28 months to 27 months, which is reflected in our third quarter and updated full year 2024 GAAP and non-GAAP guidance. Based on the carrying amount of deferred revenue and deferred cost of revenue as of March 31, 2024, the April 1, 2024 change in estimated average lifetime of a payer will result in an increase in revenue and cost of revenue of $26.4 and $5.4 million, respectively, during the third quarter of 2024 and an increase in revenue and cost of revenue of $98.0 million and $20.4 million, respectively, during the full year 2024. Refer to “Basis of Presentation and Summary of Significant Accounting Policies — Revenue Recognition” as described in the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for further background on the Company’s process to estimate the average lifetime of a payer.

Earnings Q&A Session

Roblox will host a live Q&A session to answer questions regarding its second quarter 2024 results on Thursday, August 1, 2024 at 5:30 a.m. Pacific Time/8:30 a.m. Eastern Time. The webcast will be open to the public at ir.roblox.com or by clicking here.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our vision to connect one billion global DAUs, our efforts to improve the Roblox Platform, our immersive and video advertising efforts, including our ads manager and independent measurement partnerships, our efforts to provide a safe online environment for children, our efforts regarding content curation, live operations and platform-wide events, our efforts regarding real-world shopping, the use of artificial intelligence (“AI”) on our platform, our economy and product efforts related to creator earnings and platform monetization, our sponsored experiences, branding and new partnerships and our roadmap with respect to each, our business, product, strategy and user growth, our investment strategy, including our opportunities for and expectations of improvements in financial and operating metrics, including operating leverage, margin, free cash flow, operating expenses and capital expenditures, our expectation of successfully executing such strategies and plans, disclosures regarding the seasonality of our business, disclosures and future growth rates, benefits from agreements with third-party cloud providers, disclosures about our infrastructure efficiency initiatives, changes to our estimated average lifetime of a paying user and the resulting effect on revenue, cost of revenue, deferred revenue and deferred cost of revenue, our expectations of future net losses and net cash and cash equivalents provided by operating activities, statements by our Chief Executive Officer and Chief Financial Officer, and our outlook and guidance for third quarter and full year 2024, and future periods. These forward-looking statements are made as of the date they were first issued and were based on current plans, expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as “expect,” “vision,” “envision,” “evolving,” “drive,” “anticipate,” “intend,” “maintain,” “should,” “believe,” “continue,” “plan,” “goal,” “opportunity,” “estimate,” “predict,” “may,” “will,” “could,” and “would,” and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the “SEC”), including our annual reports on Form 10-K, our quarterly reports on Form 10-Q and other filings and reports we make with the SEC from time to time. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs, including the repayment of our senior notes; the demand for our platform in general; our ability to retain and increase our number of users, developers, and creators; the impact of inflation and global economic conditions on our operations; the impact of changing legal and regulatory requirements on our business, including the use of verified parental consent; our ability to develop enhancements to our platform, and bring them to market in a timely manner; our ability to develop and protect our brand and build new partnerships; any misuse of user data or other undesirable activity by third parties on our platform; our ability to maintain the security and availability of our platform; our ability to detect and minimize unauthorized use of our platform; and the impact of AI on our platform, users, creators, and developers. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from our expectations is included in the reports we have filed or will file with the SEC, including our annual reports on Form 10-K and our quarterly reports on Form 10-Q.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

ROBLOX CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par values) (unaudited)
	As of
	June 30, 2024				December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	966,406			$	678,466
Short-term investments		1,445,689				1,514,808
Accounts receivable—net of allowances		345,809				505,769
Prepaid expenses and other current assets		87,100				74,549
Deferred cost of revenue, current portion		559,278				501,821
Total current assets		3,404,282				3,275,413
Long-term investments		1,189,135				1,043,399
Property and equipment—net		675,075				695,360
Operating lease right-of-use assets		722,493				665,107
Deferred cost of revenue, long-term		277,614				283,326
Intangible assets, net		43,113				53,060
Goodwill		141,900				142,129
Other assets		16,904				10,284
Total assets	$	6,470,516			$	6,168,078
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable	$	38,877			$	60,087
Accrued expenses and other current liabilities		269,839				271,121
Developer exchange liability		330,289				314,866
Deferred revenue—current portion		2,662,087				2,406,292
Total current liabilities		3,301,092				3,052,366
Deferred revenue—net of current portion		1,311,787				1,373,250
Operating lease liabilities		706,018				646,506
Long-term debt, net		1,005,679				1,005,000
Other long-term liabilities		34,639				22,330
Total liabilities		6,359,215				6,099,452
Stockholders’ equity
Common stock, $0.0001 par value; 5,000,000 authorized as of June 30, 2024 and December 31, 2023, 646,611 and 631,221 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively; Class A common stock—4,935,000 shares authorized as of June 30, 2024 and December 31, 2023, 597,933 and 581,135 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively; Class B common stock—65,000 shares authorized as of June 30, 2024 and December 31, 2023, 48,678 and 50,086 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		61				61
Additional paid-in capital		3,664,414				3,134,946
Accumulated other comprehensive income/(loss)		(6,229	)			1,536
Accumulated deficit		(3,536,740	)			(3,060,253	)
Total Roblox Corporation Stockholders’ equity		121,506				76,290
Noncontrolling interests		(10,205	)			(7,664	)
Total Stockholders’ equity		111,301				68,626
Total Liabilities and Stockholders’ equity	$	6,470,516			$	6,168,078

ROBLOX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (unaudited)
	Three Months Ended								Six Months Ended
	June 30,								June 30,
		2024				2023				2024				2023
Revenue(1)	$	893,543			$	680,766			$	1,694,843			$	1,336,110
Cost and expenses:
Cost of revenue(1)(2)		198,557				162,029				377,423				313,870
Developer exchange fees		208,270				165,843				410,675				348,283
Infrastructure and trust & safety		221,064				225,039				447,998				436,083
Research and development		361,684				315,319				723,749				590,856
General and administrative		105,627				96,197				203,451				193,771
Sales and marketing		36,290				30,328				71,824				57,083
Total cost and expenses		1,131,492				994,755				2,235,120				1,939,946
Loss from operations		(237,949	)			(313,989	)			(540,277	)			(603,836	)
Interest income		44,383				34,764				86,553				65,846
Interest expense		(10,204	)			(10,129	)			(20,567	)			(20,141	)
Other income/(expense), net		(3,315	)			3,277				(3,661	)			2,837
Loss before income taxes		(207,085	)			(286,077	)			(477,952	)			(555,294	)
Provision for/(benefit from) income taxes		110				(1,236	)			1,163				(505	)
Consolidated net loss		(207,195	)			(284,841	)			(479,115	)			(554,789	)
Net loss attributable to noncontrolling interests		(1,312	)			(2,064	)			(2,628	)			(3,699	)
Net loss attributable to common stockholders	$	(205,883	)		$	(282,777	)		$	(476,487	)		$	(551,090	)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.32	)		$	(0.46	)		$	(0.75	)		$	(0.90	)
Weighted-average shares used in computing net loss per share attributable to common stockholders—basic and diluted		642,814				612,689				638,917				609,680

(1)

At the onset of the second quarter of 2024, we updated our estimated paying user life from 28 months to 27 months. Based on the carrying amount of deferred revenue and deferred cost of revenue as of March 31, 2024, the change resulted in an increase in revenue and cost of revenue during the three months ended June 30, 2024 of $58.9 million and $12.4 million, respectively. This change will increase our fiscal year 2024 revenue and cost of revenue by $98.0 million and $20.4 million, respectively. Refer to “Basis of Presentation and Summary of Significant Accounting Policies — Revenue Recognition” as described in the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for further background on the Company’s process to estimate the average lifetime of a payer.

(2)

Depreciation of servers and infrastructure equipment included in infrastructure and trust & safety.

ROBLOX CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Cash flows from operating activities:
Consolidated net loss	$	(207,195	)		$	(284,841	)		$	(479,115	)		$	(554,789	)
Adjustments to reconcile net loss including noncontrolling interests to net cash and cash equivalents provided by operations:
Depreciation and amortization expense		52,772				52,599				106,513				100,011
Stock-based compensation expense		251,891				212,362				492,393				397,266
Operating lease non-cash expense		29,766				23,509				57,488				44,753
(Accretion)/amortization on marketable securities, net		(19,535	)			(19,623	)			(39,533	)			(31,745	)
Amortization of debt issuance costs		341				327				679				651
Impairment expense, (gain)/loss on investment and other asset sales, and other, net		380				(2,067	)			443				6,169
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(14,023	)			9,435				160,045				122,628
Prepaid expenses and other current assets		2,355				2,200				(12,955	)			(6,159	)
Deferred cost of revenue		(19,247	)			(18,460	)			(52,615	)			(38,597	)
Other assets		(6,717	)			(4,533	)			(6,666	)			(6,691	)
Accounts payable		(5,252	)			(16,731	)			(8,828	)			1,576
Accrued expenses and other current liabilities		(14,295	)			(5,340	)			(23,516	)			(22,344	)
Developer exchange liability		37,613				(7,291	)			15,423				(11,156	)
Deferred revenue		68,466				105,372				197,650				229,155
Operating lease liabilities		(10,226	)			(18,844	)			(29,329	)			(30,843	)
Other long-term liabilities		4,355				316				12,318				2,286
Net cash and cash equivalents provided by operating activities		151,449				28,390				390,395				202,171
Cash flows from investing activities:
Acquisition of property and equipment		(39,701	)			(110,915	)			(86,381	)			(202,274	)
Payments related to business combination, net of cash acquired		(2,000	)			—				(2,000	)			—
Purchases of intangible assets		(170	)			(13,000	)			(1,370	)			(13,500	)
Purchases of investments		(834,026	)			(702,560	)			(1,866,782	)			(3,042,760	)
Maturities of investments		715,500				324,010				1,589,320				324,010
Sales of investments		105,074				145,000				233,306				229,279
Net cash and cash equivalents used in investing activities		(55,323	)			(357,465	)			(133,907	)			(2,705,245	)
Cash flows from financing activities:
Proceeds from issuance of common stock		4,577				5,635				37,247				31,107
Proceeds from debt issuances		—				14,700				—				14,700
Financing payments related to acquisitions		—				—				(4,450	)			(750	)
Net cash and cash equivalents provided by financing activities		4,577				20,335				32,797				45,057
Effect of exchange rate changes on cash and cash equivalents		(711	)			875				(1,345	)			807
Net increase/(decrease) in cash and cash equivalents		99,992				(307,865	)			287,940				(2,457,210	)
Cash and cash equivalents
Beginning of period		866,414				828,129				678,466				2,977,474
End of period	$	966,406			$	520,264			$	966,406			$	520,264

Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measure bookings, Adjusted EBITDA, and free cash flow.

We use this non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information may be helpful to investors because it provides consistency and comparability with past financial performance.

Bookings is defined as revenue plus the change in deferred revenue during the period and other non-cash adjustments. Substantially all of our bookings are generated from sales of virtual currency, which can ultimately be converted to virtual items on the Roblox Platform. Sales of virtual currency reflected as bookings include one-time purchases and monthly subscriptions purchased via payment processors or through prepaid cards. Bookings also include an insignificant amount from advertising and licensing arrangements. We believe bookings provide a timelier indication of trends in our operating results that are not necessarily reflected in our revenue as a result of the fact that we recognize the majority of revenue over the estimated average lifetime of a paying user. The change in deferred revenue constitutes the vast majority of the reconciling difference from revenue to bookings. By removing these non-cash adjustments, we are able to measure and monitor our business performance based on the timing of actual transactions with our users and the cash that is generated from these transactions. Adjusted EBITDA represents our GAAP consolidated net loss, excluding interest income, interest expense, other income/(expense), provision for/(benefit from) income taxes, depreciation and amortization expense, stock-based compensation expense, and certain other nonrecurring adjustments. We believe that, when considered together with reported GAAP amounts, Adjusted EBITDA is useful to investors and management in understanding our ongoing operations and ongoing operating trends. Our definition of Adjusted EBITDA may differ from the definition used by other companies and therefore comparability may be limited. Free cash flow represents the net cash and cash equivalents provided by operating activities less purchases of property, equipment, and intangible assets acquired through asset acquisitions. We believe that free cash flow is a useful indicator of our unit economics and liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after the purchases of property, equipment, and intangible assets acquired through asset acquisitions, can be used for strategic initiatives.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial information as a tool for comparison. As a result, our non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation from, or as a substitute for financial information presented in accordance with GAAP.

Reconciliation tables of the most comparable GAAP financial measure to the non-GAAP financial measure used in this press release are included below. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measures.

GAAP to Non-GAAP Financial Measures Reconciliations

The following table presents a reconciliation of revenue, the most directly comparable financial measure calculated in accordance with GAAP, to bookings, for each of the periods presented (in thousands, unaudited):

	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Reconciliation of revenue to bookings:
Revenue	$	893,543			$	680,766			$	1,694,843			$	1,336,110
Add (deduct):
Change in deferred revenue		66,728				105,372				194,332				229,155
Other		(5,093	)			(5,452	)			(10,240	)			(10,760	)
Bookings	$	955,178			$	780,686			$	1,878,935			$	1,554,505

The following table presents a reconciliation of consolidated net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, for each of the periods presented (in thousands, unaudited):

	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Reconciliation of consolidated net loss to Adjusted EBITDA:
Consolidated net loss	$	(207,195	)		$	(284,841	)		$	(479,115	)		$	(554,789	)
Add (deduct):
Interest income		(44,383	)			(34,764	)			(86,553	)			(65,846	)
Interest expense		10,204				10,129				20,567				20,141
Other (income)/expense, net		3,315				(3,277	)			3,661				(2,837	)
Provision for/(benefit from) income taxes		110				(1,236	)			1,163				(505	)
Depreciation and amortization expense		52,772				52,599				106,513				100,011
Stock-based compensation expense		251,891				212,362				492,393				397,266
RTO severance charge(A)		(189	)			—				993				—
Other non-cash charges(B)		—				—				—				6,988
Adjusted EBITDA	$	66,525			$	(49,028	)		$	59,622			$	(99,571	)

(A)	Relates to cash severance costs associated with the Company’s return-to-office (“RTO”) plan announced in October 2023, which requires a subset of the Company’s remote employees to begin working from the San Mateo headquarters for three days a week, beginning in the summer of 2024.
(B)	Includes impairment expenses related to certain operating lease right-of-use assets and related property and equipment.

The following table presents a reconciliation of net cash and cash equivalents provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, for each of the periods presented (in thousands, unaudited):

	Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Reconciliation of net cash and cash equivalents provided by operating activities to free cash flow:
Net cash and cash equivalents provided by operating activities	$	151,449			$	28,390			$	390,395			$	202,171
Deduct:
Acquisition of property and equipment		(39,701	)			(110,915	)			(86,381	)			(202,274	)
Purchases of intangible assets		(170	)			(13,000	)			(1,370	)			(13,500	)
Free cash flow	$	111,578			$	(95,525	)		$	302,644			$	(13,603	)

Forward Looking Guidance⁵: GAAP to Non-GAAP Financial Measures Reconciliations

The following table presents a reconciliation of revenue, the most directly comparable financial measure calculated in accordance with GAAP, to bookings, for each of the periods presented (in thousands):

	Guidance								Updated Guidance
	Three Months Ended September 30, 2024								Twelve Months Ended December 31, 2024
	Low				High				Low				High
Reconciliation of revenue to bookings:
Revenue	$	860,000			$	885,000			$	3,490,000			$	3,540,000
Add (deduct):
Change in deferred revenue		145,000				145,000				711,000				711,000
Other		(5,000	)			(5,000	)			(21,000	)			(21,000	)
Bookings	$	1,000,000			$	1,025,000			$	4,180,000			$	4,230,000

The following table presents a reconciliation of consolidated net loss, the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, for each of the periods presented (in thousands):

	Guidance								Updated Guidance
	Three Months Ended September 30, 2024								Twelve Months Ended December 31, 2024
	Low				High				Low				High
Reconciliation of consolidated net loss to Adjusted EBITDA:
Consolidated net loss	$	(275,000	)		$	(255,000	)		$	(1,089,000	)		$	(1,049,000	)
Add (deduct):
Interest income		(40,000	)			(40,000	)			(167,000	)			(167,000	)
Interest expense		11,000				11,000				42,000				42,000
Other (income)/expense, net		—				—				4,000				4,000
Provision for/(benefit from) income taxes		1,000				1,000				4,000				4,000
Depreciation and amortization expense		55,000				55,000				217,000				217,000
Stock-based compensation expense		270,000				270,000				1,080,000				1,080,000
RTO severance charge (A)		—				—				1,000				1,000
Adjusted EBITDA	$	22,000			$	42,000			$	92,000			$	132,000

(A)	Relates to cash severance costs associated with the Company’s RTO plan announced in October 2023, which requires a subset of the Company’s remote employees to begin working from the San Mateo headquarters for three days a week, beginning in the summer of 2024.

The following table presents a reconciliation of net cash and cash equivalents provided by operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, for each of the periods presented (in thousands):

	Guidance								Updated Guidance
	Three Months Ended September 30, 2024								Twelve Months Ended December 31, 2024
	Low				High				Low				High
Reconciliation of net cash and cash equivalents provided by operating activities to free cash flow:
Net cash and cash equivalents provided by operating activities	$	147,000			$	162,000			$	685,000			$	715,000
Deduct:
Acquisition of property and equipment		(42,000	)			(42,000	)			(178,000	)			(178,000	)
Purchase of intangible assets		—				—				(2,000	)			(2,000	)
Free cash flow	$	105,000			$	120,000			$	505,000			$	535,000

5

Beginning April 1, 2024, the estimated average lifetime of a payer changed from 28 months to 27 months, which is reflected in our third quarter and updated full year 2024 GAAP and non-GAAP guidance. Based on the carrying amount of deferred revenue and deferred cost of revenue as of March 31, 2024, the April 1, 2024 change in estimated average lifetime of a payer will result in an increase in revenue and cost of revenue of $26.4 million and $5.4 million, respectively, during the third quarter of 2024 and an increase in revenue and cost of revenue of $98.0 million and $20.4 million, respectively, during the full year 2024. Refer to “Basis of Presentation and Summary of Significant Accounting Policies — Revenue Recognition” as described in the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for further background on the Company’s process to estimate the average lifetime of a payer.

About Roblox

Roblox is an immersive platform for connection and communication. Every day, millions of people come to Roblox to create, play, work, learn, and connect with each other in experiences built by our global community of creators. Our vision is to reimagine the way people come together– in a world that is safe, civil, and optimistic. To achieve this vision, we are building an innovative company that, together with the Roblox community, has the ability to strengthen our social fabric and support economic growth for people around the world. For more about Roblox, please visit corp.roblox.com.

ROBLOX and the Roblox logo are among the registered and unregistered trademarks of Roblox Corporation in the United States and other countries. © 2024 Roblox Corporation. All rights reserved.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801635645/en/

Stefanie Notaney

Roblox Corporate Communications

press@roblox.com

Source: Roblox Corporation

FAQ

What was Roblox's (RBLX) revenue growth in Q2 2024?

Roblox reported revenue growth of 31% year-over-year, reaching $893.5 million in Q2 2024.

How many Daily Active Users (DAUs) did Roblox (RBLX) have in Q2 2024?

Roblox had 79.5 million Daily Active Users (DAUs) in Q2 2024, representing a 21% increase year-over-year.

What was Roblox's (RBLX) net loss in Q2 2024?

Roblox reported a consolidated net loss of $207.2 million for Q2 2024.

How much free cash flow did Roblox (RBLX) generate in Q2 2024?

Roblox generated $111.6 million in free cash flow during Q2 2024, compared to -$95.5 million in Q2 2023.