In a boost for the ‘metaverse’, Roblox stock rises 25% after strong Q4 earnings – AapkaDost

Posted on

It seems that the metaverse is doing well. No, not the one Meta is trying to make happen in VR – the gaming platform Roblox is apparently what the kids are still spending their money on. Following the release of fourth-quarter results on Wednesday, Roblox shares rose 25% as investors reacted to the company’s better-than-expected earnings.

Roblox has been popularized by games like MeepCity, Jailbreak, Adopt Me!, Royale High, Murder Mystery and others and appeals to a younger demographic who go online not only to play games but also to chat and socialize with other players.

The growth of the platform, alongside other games like Fortnite, where players also attend concerts and hang out with friends, worried Facebook so much that it turned itself Meta and started spending billions on its metaverse project, fearing the next trend in online miss socialization.

But for now, Roblox is still where the action is for today’s young gamers or “metaverse” participants if you want to call them that. (Technically, the metaverse doesn’t exist yet. It’s just a buzzword.)

The gaming platform company reported today that it had 58.8 million average daily active users (DAUs) as of Q4, up 19% year-over-year. For the full year 2022, average DAUs were 56 million, up 23% year-over-year. In addition, the company provided more recent statistics, noting that average DAUs rose to 65 million in January, or a 19% year-over-year increase.

However, Wall Street investors were particularly pleased with Roblox’s booking numbers, which represent in-game purchases made using the company’s own virtual currency Robux. In the fourth quarter, bookings grew 17% year-over-year to $899.4 million (or 21% more on a constant currency basis), while investors had expected $884.71 million by a consensus estimate. For the full year, bookings increased 5% to $2.9 billion (or 9% on a constant currency basis).

In today’s release, the company also estimated January bookings to be between $267 million and $271 million, up 19% year-over-year.

“Bookings accelerated significantly in December and January, with year-over-year growth of more than 20% in both months. Growth was strong across all regions and age groups with strong growth among users over the age of 17,” said Michael Guthrie, Roblox CFO, in the earnings press release – an indication that Roblox is expanding its user base to include teens and young adults, not just That’s good news for the company, if so, because the demographic would have more money to drop on Robux.

At its developer conference last fall, Roblox had noted that half of its user base was 13 or older, suggesting it was successfully retaining at least some of the users many had expected to age out of the Roblox experience.

Additionally, Roblox reported today that its players have been engaging with the games on the platform for an extended period of time, both in Q4 and 2022 overall. Hours occupied grew 18% year-on-year to 12.8 billion in the fourth quarter, and 19% year-on-year to 49.3 billion last year.

While investors are more concerned about bookings, Roblox’s revenue also rose 2% year-over-year to $579.0 million in the fourth quarter, and 16% year-over-year to $2.2 billion in 2022.

Also helping to boost the stock was the fact that Roblox reported a smaller loss of 48 cents per share compared to the projected loss of 52 cents per share.

There was some anticipation about where Roblox would land in the post-Covid era.

The company saw incredible growth during the Covid-19 pandemic as schools closed and children confined to their homes, but earnings took a hit last year as trends from the pandemic normalized. A year ago, in his first full annual post-IPR report, Roblox CEO David Baszucki admitted to investors that while the company’s absolute numbers were still growing, growth rates had fallen as it was forced to double the numbers. or even compare. triple growth seen during the pandemic.

The company has also weathered a few storms, including those related to moderation issues, inappropriate content, and concerns about the exploitation of young developers building games for its platform. The latter plays into the larger issues bubbling up in technology around app and game marketplaces, and what kind of revenue share – if any – should be applied. Apple and Google’s app stores are the focus of this spotlight for now, but eventually regulations could affect any platform where game makers are required to pay commissions.

While not a factor in this revenue window, Roblox hosted a free virtual Super Bowl concert with Saweetie and announced that the NFL had created a new experience on its platform that would allow football fans to field their own NFL team and build a stadium. Reports recently reported that Roblox may be able to compete more directly with Meta’s Horizon Worlds by launching on Meta’s own Quest platform.

Leave a Reply

Your email address will not be published. Required fields are marked *