Latest news with #MikeGuthrie
Yahoo
05-05-2025
- Business
- Yahoo
RBLX Q1 Earnings Call: Revenue, User Growth, and AI-Driven Monetization Take Center Stage
Gaming metaverse operator Roblox (NYSE:RBLX) reported revenue ahead of Wall Street's expectations in Q1 CY2025, with sales up 29.2% year on year to $1.04 billion. On the other hand, next quarter's revenue guidance of $1.03 billion was less impressive, coming in 0.8% below analysts' estimates. Its non-GAAP profit of $0.21 per share was significantly above analysts' consensus estimates. Is now the time to buy RBLX? Find out in our full research report (it's free). Revenue: $1.04 billion vs analyst estimates of $1 billion (29.2% year-on-year growth, 3.3% beat) Adjusted EPS: $0.21 vs analyst estimates of -$0.39 (significant beat) Adjusted EBITDA: $205.1 million vs analyst estimates of $158.2 million (19.8% margin, 29.6% beat) The company slightly lifted its revenue guidance for the full year to $4.33 billion at the midpoint from $4.3 billion EBITDA guidance for the full year is $235 million at the midpoint, below analyst estimates of $1.08 billion Operating Margin: -24.6%, up from -37.7% in the same quarter last year Free Cash Flow Margin: 41.2%, up from 12.2% in the previous quarter Daily Active Users: 97.8 million, up 20.1 million year on year Market Capitalization: $50.25 billion Roblox delivered revenue growth above Wall Street's expectations in Q1, which management attributed to expanded daily active user numbers and significant engagement growth across key regions and age groups. CEO David Baszucki noted the platform's progress with genre diversification, tools for creators, and advancements in AI-driven moderation and recommendation systems. These operational enhancements supported higher developer earnings and improved cost efficiencies. For the coming quarters, management pointed to ongoing investment in platform technology, regional pricing strategies, and new monetization avenues such as advertising and e-commerce. CFO Mike Guthrie indicated that while margin improvement has been substantial, the pace is expected to moderate, with additional gains coming from operational efficiencies and AI adoption. Management also highlighted the early-stage nature of several initiatives, particularly around differential pricing and advertising partnerships. Revenue and user growth in Q1 were driven by broader engagement and platform improvements, while management emphasized the impact of new monetization strategies and technology investments. Global DAU Expansion: Roblox saw strong daily active user (DAU) growth in markets such as APAC and India, with over-13 age demographics increasing engagement, signaling successful international and older user expansion. Creator Earnings Acceleration: Initiatives like differential and regional pricing, alongside price optimization tools, led to higher median earnings for participating creators and contributed to over $1 billion in projected annual creator payouts for the first time. AI-Powered Efficiency: Management highlighted operational cost improvements driven by AI, particularly in trust and safety systems, content moderation, and AI-powered development tools for creators, resulting in slower growth in personnel costs relative to revenue. Genre and Content Diversification: Strategic focus on expanding into genres such as RPGs, sports racing, and battle games contributed to a 69% year-over-year growth in these areas, broadening the appeal and monetization potential of the platform. Advertising and Brand Activations: New ad formats and brand partnerships, including a collaboration with Google and high-profile activations like Chipotle and NASCAR, were cited as early contributors to platform monetization, with further scale-up expected as these initiatives mature. Roblox's outlook is shaped by its focus on expanding monetization options, driving operational efficiency, and pursuing international growth, while balancing investments in technology and content diversity. Broader Monetization Tools: Expansion of advertising partnerships, regional pricing, and direct payment methods are expected to unlock new revenue streams and improve profitability as adoption widens. Operational Leverage from AI: Continued integration of AI across moderation, development, and platform infrastructure should yield further cost efficiencies and support margin stability. International and Demographic Growth: Management sees significant runway in growing the user base among over-13 demographics and in international markets, which could help offset potential macroeconomic headwinds or saturation in core regions. Matthew Cost (Morgan Stanley): Asked about sustaining genre growth and platform diversity; management pointed to ongoing investment in technology, economics, and creator incentives as key levers. Matthew Cost (Morgan Stanley): Inquired about the impact of differential pricing and direct payments on margins; CFO Mike Guthrie described these efforts as early-stage but showing signs of positive margin contribution. Jason Bazinet (Citigroup): Questioned Roblox's resilience in a macroeconomic downturn; CEO David Baszucki stated that the platform's low-cost entertainment model and past performance suggest some defensiveness, but innovation is not the sole factor determining resilience. Clark Lampen (BTIG): Sought insight into passive monetization opportunities, especially through ads; management said advertising is growing but not yet a major contributor, and highlighted upcoming ad products and partnerships. Shweta Khajuria (Wolfe Research): Asked about the rate of margin improvement and AI tools' benefits; CFO Mike Guthrie noted margins have improved rapidly but will moderate, while AI is expected to boost both efficiency and creative output. Looking ahead, the StockStory team will be monitoring (1) the progress of advertising and e-commerce integrations and their impact on revenue, (2) the effectiveness of regional pricing and differential payment initiatives in boosting creator and platform earnings, and (3) sustained international and over-13 user growth. We will also watch for updates on AI-driven tools, both for operational efficiency and creator productivity. Roblox currently trades at a forward EV/EBITDA ratio of 42.4×. At this valuation, is it a buy or sell post earnings? The answer lies in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today.
Yahoo
07-02-2025
- Business
- Yahoo
Roblox Corp (RBLX) Q4 2024 Earnings Call Highlights: Record Revenue and User Growth Propel ...
Q4 Revenue: $988 million, up 32% year-on-year. Q4 Bookings: $1.362 billion, up 21% year-on-year. Daily Active Users (DAUs): 85.3 million in Q4, up 19% year-on-year. Engagement Hours: 18.7 billion hours in Q4, up 21% year-on-year. Developer Exchange (DevEx) Payments: $280 million in Q4, up 27% year-on-year. Q4 Cash Flow: $184 million, up 29% year-on-year. Q4 Free Cash Flow: $120 million, up 54% year-on-year. Full Year Free Cash Flow: $641 million, up from $124 million in 2023. Trust and Safety and Infrastructure Costs: 13% of revenue and 9% of bookings, decreased year-on-year. Personnel Costs (excluding stock-based compensation): $200 million, decreased as a percentage of revenue and bookings. Warning! GuruFocus has detected 4 Warning Signs with RBLX. Release Date: February 06, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Roblox Corp (NYSE:RBLX) reported Q4 revenue of $988 million, up 32% year-on-year, surpassing their guidance. Q4 bookings reached $1.362 billion, a 21% increase year-on-year, exceeding expectations. Daily Active Users (DAUs) grew to 85.3 million in Q4, marking a 19% year-on-year increase, with significant growth in Japan and India. Roblox Corp (NYSE:RBLX) achieved a record high of 18.7 billion hours of engagement in Q4, up 21% year-on-year. Free cash flow for the year increased over five times from $124 million in 2023 to $641 million in 2024. Developer exchange costs (DevEx) increased by 25%, with $922 million shared with the developer community in 2024. Trust and safety infrastructure costs rose by 2% year-on-year, despite efforts to improve efficiency. Personnel costs, excluding stock-based compensation, amounted to $200 million, representing 20% of revenue. There was a slight decline in DAUs from Q3 to Q4, attributed to lapping the launch of PlayStation and Xbox updates. Eastern Europe, particularly Turkey, experienced slower DAU growth, impacting overall user growth in the region. Q: How does Roblox plan to achieve 10% of the video game market, and which tiers of production value will developers emulate? A: David Baszucki, CEO, explained that Roblox aims to have more creators using their platform rather than taking share from others. They are focusing on various genres, such as battle royale on low-end mobile devices, and are developing a 3D streaming architecture to support high-quality experiences across devices. The strategy includes technical innovation, economic incentives, and collaboration with high-end developers. Q: What are Roblox's plans for the advertising business in 2025, and how significant is its contribution to the outlook? A: David Baszucki, CEO, mentioned that Roblox is expanding its ad products, including streaming video ads and shopping ads. While the advertising business is growing, it is not yet significant enough to be broken out separately in financial reports. Mike Guthrie, CFO, added that there is very little advertising revenue included in the 2025 guidance. Q: How is Roblox addressing potential developer burnout due to increased content creation demands? A: David Baszucki, CEO, emphasized transparency in search and discovery algorithms and encourages creators to make small, frequent updates rather than large ones. This approach aligns with Roblox's engineering practices and aims to prevent burnout while maintaining a healthy development environment. Q: What are the implications of differential pricing on Roblox's gross margins and developer exchange fees? A: David Baszucki, CEO, stated that differential pricing aligns Robux distribution with cash received, improving economics and increasing funds flowing to developers. Mike Guthrie, CFO, noted that while the guidance does not yet model significant COGS leverage, the strategy aims to increase developer share without reducing margins. Q: How are AI-powered tools impacting game development on Roblox, and what is the adoption rate among developers? A: David Baszucki, CEO, highlighted that AI tools are enhancing efficiency and reducing development costs, leading to better earnings for developers and improved game quality. Adoption of AI tools is growing, and Roblox expects the overall market for experience creation jobs to expand, driven by AI advancements. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
