Roblox Stock Drops Over 21% in 2025 Q1 After Earnings Miss and Lower Guidance
Roblox's shares tumbled sharply following the release of its Q1 2025 financial results and cautious guidance, falling short of analyst expectations despite revenue growth.
Highlights from Roblox's Q1 2024 Report
- Roblox's stock plunged in intraday trading after Q1 earnings and guidance fell below analyst forecasts.
- Revenue and bookings showed year-over-year growth but narrowly missed market estimates.
- The company reported a net loss almost unchanged from last year despite increased revenue.
Roblox Corporation (RBLX) experienced a significant drop in share price during Thursday’s trading hours following the announcement of its first-quarter 2024 financial results.
Revenue Climbs 22% Year-Over-Year, Net Loss Remains Steady
Roblox reported revenue of $801.3 million for Q1 2024, a 22% increase compared to $655.3 million in Q1 2023, yet slightly below the $806.2 million expected by analysts as per Visible Alpha data.
The platform’s average daily active users rose 17% year-over-year to 77.7 million, indicating sustained user engagement growth.
Despite revenue gains, Roblox posted a net loss of $270.6 million, or 43 cents per share, which was narrower than the anticipated $308.4 million but nearly identical to the $268.3 million loss recorded in Q1 2023.
In a shareholder letter, Roblox highlighted that although daily active users and engagement hours increased year-over-year, engagement levels declined unusually across multiple regions, age groups, and platforms during much of the quarter.
Bookings Fall Slightly Short of Projections With Lower Future Guidance
Bookings, encompassing revenue plus deferred revenue changes and non-cash adjustments such as virtual currency sales and subscriptions, totaled $923.8 million for Q1, representing a 19% increase from $773.8 million in the prior year.
However, this figure was just under the $928.6 million analysts had predicted.
Looking ahead, Roblox provided bookings guidance of $870 million to $900 million for Q2 and $4 billion to $4.1 billion for the full year, both below market expectations of $939.1 million and $4.2 billion, respectively.
Consequently, Roblox shares dropped over 21%, reaching $30.69 by late morning trading on Thursday.
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