3/19/2024 0 Comments Roblox corporation in action![]() ![]() Since users must perform all transactions in Robux ( Roblox's currency), it's a critical underpinning to drive the platform's bookings growth, supporting its profitability growth. As such, it likely justifies the narrow moat rating Morningstar reflects, attributed to Roblox's network effect. and Canada over time.ĭespite worsening macroeconomic challenges, we assessed that the growth momentum in Roblox has remained robust. However, management highlighted that it's confident that the newer markets will follow the trends seen in the U.S. and Canada matures, it has helped to bolster its monetization engine, even as Roblox expands to lower monetization regions in the earlier stages of its growth. Roblox saw "a slight increase in monetization per payer," with "healthy growth" globally. Roblox reminded investors that its bookings growth is underpinned by hours engaged and improvement in monetization. As such, Roblox seems to be moving in the right direction, as management highlighted the robustness of its monetization. Moreover, the total hours engaged improved, up 23% YoY, compared to last quarter's 18% growth. ![]() Moreover, the company demonstrated its ability to navigate macroeconomic headwinds, as management highlighted that it can "moderate its rate of investment in headcount and infrastructure."Ĭoupled with solid engagement metrics, Roblox seems to be growing up well, as DAUs (daily average users) for over-13 users rose 31% YoY, accelerating from last quarter's 28% growth. Investors assessing the business case of Roblox should focus on its FCF metrics, as it aligns closely with bookings growth than GAAP EPS, as " Roblox is largely self-funded thanks to deferred revenue," which is reflected in its operating cash flow. In addition, while the company continues to report GAAP EPS loss (-$0.44), it posted robust operating cash flow and free cash flow, or FCF, despite investing " almost $400 million on infrastructure over the last year." Bookings growth came ahead of the consensus estimates, up 22.6% YoY. Roblox Corporation ( NYSE: RBLX) released its Q1 earnings earlier today, as investors cheered its report. ![]()
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