Roblox Q4 2024 Earnings: Revenue Beats Estimates, Stock Dips

Gaming Metaverse Leader Reports Solid Revenue Growth

Key Highlights:

* Revenue: $988.2 million, exceeding analyst estimates by 1.9% (31.8% YoY growth)
* GAAP EPS: -$0.33, beating expectations by 26.2%
* Adjusted EBITDA: $65.61 million, missing estimates by 81.3%

Guidance and Estimates:

* Q1 2025 Revenue: $1.00 billion, 2.5% above analyst estimates
* FY2025 Revenue: $4.30 billion, below analyst estimates by 17.9%
* FY2025 EBITDA: $227.5 million, significantly below analyst expectations

Key Business Metrics:

* Daily Active Users: 85.3 million, up 13.8 million YoY
* Operating Margin: -24.7% (improved from -47.4% in Q4 2023)
* Free Cash Flow Margin: 12.2% (decline from 23.7% in Q3 2024)

CEO Comments:

"Roblox had a strong 2024, driven by our commitment to innovation and community. We're building a platform beyond technology that fosters genuine connections. We're investing in our virtual economy, app performance, and AI-powered discovery and safety to empower creators and enhance user experience," said David Baszucki, Roblox founder and CEO.

Industry Overview:

The video gaming industry has experienced steady growth, driven by the rise of mobile gaming and social engagement features. Companies have adopted digital distribution and in-game monetization, providing more stable business models. COVID-19 lockdowns accelerated videogame usage, a trend that shows no signs of slowing down.

Roblox Performance:

* Over the past three years, Roblox has achieved a 23.4% CAGR in sales growth, outperforming the average consumer internet company.
* Q4 2024 saw a 31.8% YoY increase in revenue.
* Sell-side analysts project 21.3% revenue growth over the next 12 months.
* Daily active users have grown 21.7% annually over the past two years, reaching 85.3 million in Q4 2024.
* ARPU growth has been modest at 4.7% over the past two years.

Key Takeaways:

* Roblox exceeded revenue expectations but missed on daily active user growth.
* Revenue and EBITDA guidance fell short of analyst estimates.
* The company's earnings suggest a softer quarter.
* Shares declined 21.5% post-earnings.

For More Information:

* Read our full research report on Roblox for more analysis and insights: [link to report]