Roblox Guides Fourth-Quarter Bookings Down 10% To 15% And Builds In A GTA Hit
CFO Naveen Chopra said the outlook assumes no near-term monetization gain and carries a modest headwind from Grand Theft Auto.
Roblox, which runs an online platform where people play and build 3D games, expects fourth-quarter bookings to fall 10% to 15% from a year earlier, CFO Naveen Chopra said on the company's earnings call Thursday. The forecast includes a modest headwind from the release of Grand Theft Auto, and Seeking Alpha reported the shares fell about 11% in after-hours trading Thursday.
A guide that assumes little
Chopra said the outlook assumes normal seasonal declines in daily users between the third and fourth quarters. Third-quarter bookings, he said, had come in above the high end of the company's guidance, driven largely by retention and engagement.
Asked by a Wells Fargo analyst how much conservatism the forecast carries, Chopra said it does not assume that recent hit games or the heavy volume of Halloween updates will repeat. Nor does it assume any short-term improvement in monetization.
Monetization headwinds continued in the quarter, he said, particularly among younger US users. He said he remains confident that gains in engagement and retention will lift the lifetime value of users over time.
Because of last year's comparisons, Chopra noted, the guidance midpoint implies full-year annualized growth of 26% over the last two years.
GTA and the limits of the data
On GTA, Chopra said there "really is not a lot of data or analogous releases" to gauge the effect. He called its audience "a pretty different demo" from Roblox's and noted the game is console only. "We don't really know what to expect," he said, but management tried to be prudent.
CEO David Baszucki offered a counterpoint, saying games like GTA create cultural moments and that people often lean into them on Roblox too. "No prediction here," he added.
Spending shifts into the fourth quarter
Roughly $140 million of capital spending moved from the third quarter into the fourth, Chopra said, which lifted third-quarter free cash flow and weighs on the fourth-quarter projection. Roblox plans $380 million of capital spending in the fourth quarter and $468 million for the year, at the low end of expectations set at the start of the year.
Infrastructure expense will rise in the fourth quarter for AI efforts including Build, Roblox Reality and Universal Player, he said, with more year-over-year growth expected next year. Marketing aimed at users over 18 will keep growing.
Chopra said the company holds about $5 billion in net cash and has bought back probably over $400 million of stock over the last couple of quarters under a $3 billion authorization.
Baszucki closed the call by inviting listeners to a Jonas Brothers event inside the Roblox hit Steal and Egg on Halloween morning at 11 a.m. Eastern.
Sources
- Roblox shares tumble as weak bookings outlook disappoints (RBLX:NYSE) | Seeking Alpha — seekingalpha.com
- Roblox (RBLX) Stock May Be 27% Undervalued Despite Weak Bookings — Yahoo Finance
- Roblox GAAP EPS of -$0.32 beats by $0.10, bookings of $1.7B beats by $80M (RBLX:NYSE) — seekingalpha.com
- RBLX Stock Price — MarketWatch
- Roblox (RBLX) Q3 Earnings Preview: What You Should Know Beyond the Headline Estimates — Yahoo Finance
