Roblox Plunges 22% on Disappointing Guidance, Overshadowing Q1 Beat

Roblox (NYSE:RBLX) reported first-quarter results that exceeded analyst expectations for both earnings and revenue, but disappointing bookings guidance for the second quarter led to a dramatic 22% drop in its share price yesterday.

The company posted a Q1 loss of $0.43 per share, which was better than the anticipated loss of $0.53 per share. Revenue for the quarter was $801.3 million, surpassing the expected $769 million and showing a 22% increase year-over-year. Bookings for Q1 increased by 19.4% year-over-year to $923.8 million, falling within the company's forecast range of $910 million to $940 million.

Despite these strong Q1 results, Roblox's forecast for second-quarter bookings, ranging from $870 million to $900 million, did not meet the analyst consensus of $902.5 million, prompting a steep decline in its stock. However, the revenue guidance for the same quarter is set between $855 million and $880 million, which is well above the consensus of $805.2 million.

The first quarter saw a 37% year-over-year increase in net cash from operating activities, reaching $238.9 million, and a record 133% year-over-year rise in free cash flow to $191.1 million. The platform's average daily active users (DAUs) grew by 17% year-over-year to 77.7 million, and the average bookings per DAU saw a slight increase of 2% year-over-year to $11.89.

For the full year of 2024, Roblox anticipates revenue between $3.45 billion and $3.525 billion, with bookings expected to range from $4 billion to $4.1 billion.