Roblox Corporation Q4 2024 Earnings Release
Download PDFQ4 2024
Supplemental Materials
February 6, 2025
2
Forward-Looking Statements
This presentation and the live webcast and Q&A session which will be held at 530 a.m. Pacific Time/830 a.m. Eastern Time on Thursday, February 6, 2025 contain “forward-looking statementsˮ within the
meaning of the “safe harborˮ provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our vision to connect one billion global DAUs, our vision to
reach 10% of the global gaming content market, our efforts to improve the Roblox Platform, our investments to pursue the highest standards of trust and safety on our platform, our immersive advertising
efforts, including our ads manager and independent measurement partnerships, our efforts to provide a safe online environment for children, our efforts regarding content curation, and live operations, our
efforts regarding real-world commerce, the use of AI on our platform, our economy and product efforts related to creator earnings and platform monetization, our sponsored experiences, branding and
new
partnerships and our roadmap with respect to each, our business, product, strategy and user growth, our investment strategy, including our opportunities for and expectations of improvements in financial
and operating metrics, including operating leverage, margin, free cash flow, operating expenses and capital expenditures, our expectation of successfully executing such strategies and plans, disclosures
regarding the seasonality of our business and future growth rates, benefits from agreements with third-party cloud providers, disclosures about our infrastructure efficiency initiatives, changes to our
estimated average lifetime of a paying user and the resulting effect on revenue, cost of revenue, deferred revenue and deferred cost of revenue, our expectations of future net losses and net cash and
cash
equivalents provided by operating activities, statements by our Chief Executive Officer and Chief Financial Officer, and our outlook and guidance for the first quarter and full year 2025, and future periods.
These forward-looking statements are made as of the date they were first issued and were based on current plans, expectations, estimates, forecasts, and projections as well as the beliefs and
assumptions of management. Words such as “expect,ˮ “vision,ˮ “envision,ˮ “evolving,ˮ “drive,ˮ “anticipate,ˮ “intend,ˮ “maintain,ˮ “should,ˮ “believe,ˮ “continue,ˮ “plan,ˮ “goal,ˮ “opportunity,ˮ “estimate,ˮ
“predict,ˮ “may,ˮ “will,ˮ “could,ˮ and “would,ˮ and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements.
Forward-looking
statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or
implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the “SECˮ), including our annual
reports on Form 10K, our quarterly reports on Form 10Q and other filings and reports we make with the SEC from time to time. In particular, the following factors, among others, could cause results to
differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash
equivalents
to meet our liquidity needs, including the repayment of our senior notes; the demand for our platform in general; our ability to retain and increase our number of users, developers, and creators; the impact
of inflation and global economic conditions on our operations; the impact of changing legal and regulatory requirements on our business, including the use of verified parental consent; our ability to
develop enhancements to our platform, and bring them to market in a timely manner; our ability to develop and protect our brand and build new partnerships; any misuse of user data or other undesirable
activity by third parties on our platform; our ability to maintain the security and availability of our platform; our ability to detect and minimize unauthorized use of our platform; and the impact of AI on our
platform, users, creators, and developers. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from our expectations is included in the
reports we have filed or will file with the SEC, including our annual reports on Form 10K and our quarterly reports on Form 10Q.
The forward-looking statements included in this presentation represent our views as of the date of this presentation. We anticipate that subsequent events and developments will cause our views to
change. However, we undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking
statements should not be relied upon as representing our views as of any date subsequent to the date of this presentation.
3
Q4 2024 Results Review
REVENUE
BOOKINGS
1
AVERAGE DAILY
ACTIVE USERS
(“DAUsˮ)
HOURS
ENGAGED
$988M
$1,362M
18.7B
85.3M
32% YoY Growth
21% YoY Growth
19% YoY Growth
21% YoY Growth
For endnote descriptions, see
final slide
.
A
Adjusted EBITDA excludes adjustments for increases in deferred revenue and deferred cost of revenue of $381.8 million and $65.2) million, respectively, or a total change in deferrals of $316.5 million.
For endnote descriptions, see
final slide
.
CONSOLIDATED
NET LOSS
$(221)M
Q4 2024 Results Review
$184M
NET CASH AND CASH
EQUIVALENTS PROVIDED BY
OPERATING ACTIVITIES
$121M
FREE CASH FLOW
1
29% YoY Growth
ADJUSTED
EBITDA
A1
$66M
4
54% YoY Growth
Operating and Financial
Metrics Discussion
5
DAUs
(in millions)
Year over year growth %
6
DAUs by Region and Age
(2)
(in millions)
By Age Group
By Region
YoY
YoY
US & Canada
Europe
APAC
ROW
Total
U13
O13
Total
19%
16%
15%
11%
17%
13%
21%
26%
15%
24%
27%
29%
22%
20%
13%
14%
15%
6%
21%
18%
25%
23%
27%
26%
31%
37%
30%
12%
27%
32%
22%
22%
19%
22%
30%
27%
19%
22%
25%
20%
22%
17%
21%
27%
19%
11%
12%
17%
12%
13%
12%
15%
16%
11%
26%
31%
33%
25%
28%
22%
26%
34%
26%
19%
22%
25%
20%
22%
17%
21%
27%
19%
7
US & Canada
Europe
APAC
ROW
U13
13O
Unknown
For endnote descriptions, see
final slide
.
Hours Engaged
(in billions)
Year over year growth %
8
Hours Engaged by Region and Age
(2)
(in billions)
By Age Group
By Region
YoY
YoY
U13
O13
Total
7%
10%
13%
10%
10%
8%
16%
17%
11%
28%
33%
32%
27%
28%
19%
30%
37%
28%
18%
23%
24%
20%
21%
15%
24%
29%
21%
9
29%
21%
17%
12%
16%
12%
23%
28%
17%
28%
33%
32%
24%
21%
11%
16%
17%
9%
9%
8%
16%
21%
27%
23%
39%
45%
33%
8%
28%
30%
22%
21%
15%
22%
29%
26%
18%
23%
24%
20%
21%
15%
24%
29%
21%
US & Canada
Europe
APAC
ROW
Total
U13
13O
Unknown
US & Canada
Europe
APAC
ROW
For endnote descriptions, see
final slide
.
Revenue
(3)
$ in millions, unaudited)
10
Year over year growth %
For endnote descriptions, see
final slide
.
Revenue by Region
(3)(4)
$ in millions, unaudited)
YoY
11
1%
19%
13%
34%
27%
20%
29%
27%
30%
1%
19%
14%
39%
29%
23%
32%
31%
35%
22%
42%
30%
52%
39%
31%
38%
29%
31%
9%
30%
23%
49%
39%
33%
42%
38%
42%
2%
22%
15%
38%
30%
22%
31%
29%
32%
US & Canada
Europe
APAC
ROW
For endnote descriptions, see
final slide
.
US & Canada
Europe
APAC
ROW
Total
Bookings
(1)
$ in millions, unaudited)
Year over year growth %
12
For endnote descriptions, see
final slide
.
Bookings by Region
(1)(4)
$ in millions, unaudited)
13
YoY
US & Canada
Europe
APAC
ROW
For endnote descriptions, see
final slide
.
US & Canada
Europe
APAC
ROW
Total
19%
21%
19%
14%
21%
17%
21%
33%
18%
9%
17%
30%
37%
37%
23%
24%
36%
24%
18%
26%
17%
15%
18%
16%
22%
36%
29%
11%
41%
36%
43%
49%
35%
33%
37%
24%
17%
23%
22%
20%
25%
19%
22%
34%
21%
14
Average Bookings per DAU (“ABPDAU”)
(1)
Year over year growth %
For endnote descriptions, see
final slide
.
ABPDAUs by Region
(1)(2)(4)
Year over year growth %
APAC
Europe
US & Canada
ROW
15
For endnote descriptions, see
final slide
.
Payer Community
New & Returning Monthly Unique Payers (in millions)
Average Bookings Per Monthly Unique Payer
1
16
For endnote descriptions, see
final slide
.
17
Four Main
Expenses
Cost of Revenue
(3)
$ in millions, unaudited)
Year over year growth %
18
For endnote descriptions, see
final slide
.
Developer Exchange Fees
$ in millions, unaudited)
% of Revenue
% of Bookings
1
31%
28%
24%
24%
30%
25%
23%
25%
28%
20%
24%
21%
20%
20%
22%
22%
21%
21%
Year over year growth %
19
For endnote descriptions, see
final slide
.
Certain Infrastructure and Trust & Safety Expense
(5)
$ in millions, unaudited)
Year over year growth %
% of Revenue
% of Bookings
1
22%
20%
19%
17%
17%
16%
14%
14%
13%
14%
17%
17%
15%
11%
13%
13%
11%
9%
20
For endnote descriptions, see
final slide
.
Year over year growth %
% of Revenue
% of Bookings
1
2100
2300
2400
2500
2500
2500
2400
2400
2500
28%
29%
30%
27%
26%
28%
23%
22%
20%
18%
24%
26%
23%
18%
25%
21%
18%
15%
Headcount
21
Personnel Costs excl. Stock-Based Compensation Expense
$ in millions, unaudited)
For endnote descriptions, see
final slide
.
Liquidity, Cash Flow, &
Shares Outstanding
22
Principal Sources of Liquidity
$ in millions, unaudited)
$1,988
$2,103
$2,020
$2,111
$2,232
$2,464
$2,596
$2,876
$3,013
Net Liquidity
6
Total cash, cash
equivalents, and
investments
$2,977
$3,092
$3,025
$3,116
$3,237
$3,469
$3,601
$3,882
$4,020
23
7
For endnote descriptions, see
final slide
.
Net Cash and Cash Equivalents Provided by Operating Activities
$ in millions, unaudited)
24
Free Cash Flow
(1)
$ in millions, unaudited)
Acquisition of property
and equipment
Purchases of intangible
assets
$157.2M
$91.4M
$110.9M
$53.2M
$65.2M
$46.7M
$39.7M
$29.4M
$63.9M
—
$0.5M
$13.0M
—
—
$1.2M
$0.2M
—
—
25
For endnote descriptions, see
final slide
.
Shares Outstanding
(in thousands, unaudited)
As of
12/31/2024
12/31/2023
12/31/2022
2023 to
2024 YoY%
Shares of Class A and B Common stock
outstanding
666,419
631,221
604,674
6%
Number of stock options outstanding
A
27,458
40,159
51,591
32%
Number of unvested RSUs outstanding
35,012
39,846
30,322
12%
Number of ESPP shares to be
purchased
1,634
3,347
2,311
51%
Number of 2023 PSUs Grants based
on performance target achievement
at period-end
B
373
9
–
NM
Number of stock warrants and RSAs
outstanding
296
413
764
28%
Total outstanding and potentially dilutive
shares
B
731,192
714,995
689,662
2%
26
For further information on these award types, please refer to our annual and quarterly SEC filings.
A
The weighted average exercise price per outstanding option was $3.08, $2.98, and $2.85 as of 4Q24, 4Q23, and 4Q22, respectively.
B
Based on the Company’s performance against the cumulative Adjusted EBITDA and cumulative Bookings performance measures (as those performance measures are described in the respective grant
agreements) through the respective balance sheet date, the hypothetical number of shares that would have been earned under the Company’s 2023 PSU Awards had the performance period ended on the
balance sheet date have been included in the table above. All other PSU Awards are excluded from the above table because the respective stock price targets or performance measures had not been met as
of
or during the periods presented.
Guidance
27
28
1Q25 Guidance
(8)
Summary
$ in millions)
3 months ended
Guidance
Actual
3/31/2025
3/31/2024
YoY %
Low
High
Low
High
Revenue
$990.0
$1,015.0
$801.3
24%
27%
Bookings
1
$1,125.0
$1,150.0
$923.8
22%
24%
Consolidated net loss
$287.0
$267.0
$271.9
6%
2%
Adjusted EBITDA
1
$20.0
$40.0
$6.9
NM
NM
Increase in deferred revenue
$140.0
$140.0
$127.6
10%
10%
Increase in deferred cost of revenue
$20.0
$20.0
$32.9
39%
39%
Total change in deferrals
$120.0
$120.0
$94.7
27%
27%
Net cash and cash equivalents provided by operating activities
$360.0
$380.0
$238.9
51%
59%
Capital expenditures and purchases of intangible assets
$20.0
$20.0
$47.9
58%
58%
Free cash flow
1
$340.0
$360.0
$191.1
78%
88%
For endnote descriptions, see
final slide
.
12 months ended
Guidance
Actual
12/31/2025
12/31/2024
YoY %
Low
High
Low
High
Revenue
$4,245.0
$4,345.0
$3,602.0
18%
21%
Bookings
1
$5,200.0
$5,300.0
$4,369.1
19%
21%
Consolidated net loss
$1,070.0
$995.0
$940.6
14%
6%
Adjusted EBITDA
1
$190.0
$265.0
$180.2
5%
47%
Increase in deferred revenue
$975.0
$975.0
$792.4
23%
23%
Increase in deferred cost of revenue
$150.0
$150.0
$164.9
9%
9%
Total change in deferrals
$825.0
$825.0
$627.5
31%
31%
Net cash and cash equivalents provided by operating activities
$1,050.0
$1,110.0
$822.3
28%
35%
Capital expenditures and purchases of intangible assets
$250.0
$250.0
$181.0
38%
38%
Free cash flow
1
$800.0
$860.0
$641.3
25%
34%
29
Fiscal Year Guidance
(8)
Summary
$ in millions)
For endnote descriptions, see
final slide
.
1Q25 Guidance: Non-GAAP Financial Measures Reconciliation
Revenue
8
to Bookings
1
$ in millions)
3 months ended
Guidance
Actual
3/31/2025
3/31/2024
YoY %
Low
High
Low
High
Revenue
$990.0
$1,015.0
$801.3
24%
27%
Add (deduct):
Change in deferred revenue
140.0
140.0
127.6
10%
10%
Other
5.0
5.0
5.1
3%
3%
Bookings
$1,125.0
$1,150.0
$923.8
22%
24%
30
For endnote descriptions, see
final slide
.
Fiscal Year Guidance:
Non-GAAP Financial Measures Reconciliation
Revenue
8
to Bookings
1
$ in millions)
12 months ended
Guidance
Actual
12/31/2025
12/31/2024
YoY %
Low
High
Low
High
Revenue
$4,245.0
$4,345.0
$3,602.0
18%
21%
Add (deduct):
Change in deferred revenue
975.0
975.0
792.4
23%
23%
Other
20.0
20.0
25.3
21%
21%
Bookings
$5,200.0
$5,300.0
$4,369.1
19%
21%
31
For endnote descriptions, see
final slide
.
1Q25 Guidance: Non-GAAP Financial Measures Reconciliation
Consolidated Net Loss
8
to Adjusted EBITDA
18
$ in millions)
3 months ended
Guidance
Actual
3/31/2025
3/31/2024
YoY %
Low
High
Low
High
Consolidated Net Loss
$287.0
$267.0
$271.9
6%
2%
Add (deduct):
Interest income
40.0
40.0
42.2
5%
5%
Interest expense
11.0
11.0
10.4
6%
6%
Other (income)/expense, net
—
—
0.3
NM
NM
Provision for/(benefit from) income taxes
1.0
1.0
1.1
5%
5%
Depreciation and amortization expense
55.0
55.0
53.7
2%
2%
Stock-based compensation expense
280.0
280.0
240.5
16%
16%
RTO severance charge
A
—
—
1.2
NM
NM
Adjusted EBITDA
$20.0
$40.0
$6.9
NM
NM
32
A
Relates to cash severance costs associated with the Companyʼs return-to-office (“RTOˮ) plan announced in October 2023, which required a subset of the Companyʼs remote employees to begin working
from the San Mateo headquarters for three days a week, beginning in the summer of 2024.
For endnote descriptions, see
final slide
.
Fiscal Year Guidance:
Non-GAAP Financial Measures Reconciliation
Consolidated Net Loss
8
to Adjusted EBITDA
18
$ in millions)
12 months ended
Guidance
Actual
12/31/2025
12/31/2024
YoY %
Low
High
Low
High
Consolidated Net Loss
$1,070.0
$995.0
$940.6
14%
6%
Add (deduct):
Interest income
160.0
160.0
179.5
11%
11%
Interest expense
42.0
42.0
41.2
2%
2%
Other (income)/expense, net
—
—
11.5
NM
NM
Provision for/(benefit from) income
taxes
3.0
3.0
4.1
27%
27%
Depreciation and amortization expense
225.0
225.0
226.4
1%
1%
Stock-based compensation expense
1,150.0
1,150.0
1,015.8
13%
13%
RTO severance charge
A
—
—
1.3
NM
NM
Adjusted EBITDA
$190.0
$265.0
$180.2
5%
47%
33
A
Relates to cash severance costs associated with the Companyʼs return-to-office (“RTOˮ) plan announced in October 2023, which required a subset of the Companyʼs remote employees to begin working
from the San Mateo headquarters for three days a week, beginning in the summer of 2024.
For endnote descriptions, see
final slide
.
3 months ended
Guidance
Actual
3/31/2025
3/31/2024
YoY %
Low
High
Low
High
Net cash and cash equivalents provided by
operating activities
$360.0
$380.0
$238.9
51%
59%
Deduct:
Acquisition of property and equipment
20.0
20.0
46.7
57%
57%
Purchases of intangible assets
—
—
1.2
NM
NM
Free cash flow
$340.0
$360.0
$191.1
78%
88%
34
1Q25 Guidance: Non-GAAP Financial Measures Reconciliation
Net Cash and Cash Equivalents Provided by Operating Activities to Free Cash Flow
1
$ in millions)
For endnote descriptions, see
final slide
.
12 months ended
Guidance
Actual
12/31/2025
12/31/2024
YoY %
Low
High
Low
High
Net cash and cash equivalents provided by
operating activities
$1,050.0
$1,110.0
$822.3
28%
35%
Deduct:
Acquisition of property and equipment
250.0
250.0
179.6
39%
39%
Purchases of intangible assets
—
—
1.4
NM
NM
Free cash flow
$800.0
$860.0
$641.3
25%
34%
35
Fiscal Year Guidance:
Non-GAAP Financial Measures Reconciliation
Net Cash and Cash Equivalents Provided by Operating Activities to Free Cash Flow
1
$ in millions)
For endnote descriptions, see
final slide
.
Appendix
36
●
Paying user spends Robux (on average, within 3 days
A
) on the platform to
purchase:
●
Paying user spends
$30
on the Roblox platform to purchase 3,000 Robux
or
purchases a
$30
prepaid card to exchange for 3,000 Robux
Bookings recognized = $30
Recognized in Month 1
Durable Virtual Items
B
=
2,700 Robux, or
$27
GAAP Revenue Recognition
Revenue is recognized over estimated average lifetime of paying user
C
$27 bookings / 27 months
C
= $1 per month
Month 1
Months 227
$1
$1 / month $26 deferred)
Revenue recognized by month
Revenue recognized = $1
(associated with durable items)
Deferred Revenue
at end of Month 1 $26
(to be recognized as revenue
in months 227
Consumable Virtual Items
B
=
300 Robux, or
$3
GAAP Revenue Recognition
Revenue is recognized immediately upon consumption
Revenue recognized = $3
(associated with consumable items)
$3 bookings in month of purchase
Recognized in Month 1
Total Revenue recognized $4 + Deferred Revenue $26 = Bookings $30
37
Revenue, Deferred Revenue, and Bookings Illustration
The following example illustrates GAAP revenue recognition for bookings on the Roblox platform.
A
For the three months ended December 31, 2024, average number of days it takes our users to spend Robux following purchase of Robux through our Platform or following redemption of Robux from
prepaid cards.
B
For the three months ended December 31, 2024, durable virtual items accounted for 89% of virtual item-related revenue while consumable virtual items accounted for 11%. For the purpose of the
example, we did not apply these exact percentages.
C
For the three months ended December 31, 2024, the estimated average lifetime for a paying user was 27 months.
Non-GAAP Financial Measures Reconciliation
Revenue to Bookings
1
$ in thousands, unaudited)
3 months ended
12/31/2024
12/31/2023
12/31/2022
2023 to
2024 YoY%
Revenue
$ 988,183
$ 749,939
$ 579,004
32%
Add (deduct):
Change in deferred revenue
381,777
382,196
325,450
%
Other
8,319
5,313
5,020
57%
Bookings
$ 1,361,641
$ 1,126,822
$ 899,434
21%
38
For endnote descriptions, see
final slide
.
Non-GAAP Financial Measures Reconciliation
Consolidated Net Loss to Adjusted EBITDA
1
$ in thousands, unaudited)
39
3 months ended
12/31/2024
12/31/2023
12/31/2022
2023 to
2024 YoY%
Consolidated Net Loss
$ 221,052
$ 325,340
$ 291,485
32%
Add (deduct):
Interest income
46,260
39,530
21,636
17%
Interest expense
10,331
10,298
10,008
%
Other (income)/expense, net
10,221
898
1,988
NM
Provision for/(benefit from) income taxes
2,648
277
3,202
NM
Depreciation and amortization expense
51,311
54,531
42,538
6%
Stock-based compensation expense
258,236
250,679
169,456
3%
RTO severance charge
A
173
5,228
–
97%
Adjusted EBITDA
$ 65,608
$ 44,755
$ 89,905
NM
A
Relates to cash severance costs associated with the Companyʼs return-to-office (“RTOˮ) plan announced in October 2023, which required a subset of the Companyʼs remote employees to begin working
from the San Mateo headquarters for three days a week, beginning in the summer of 2024.
For endnote descriptions, see
final slide
.
Non-GAAP Financial Measures Reconciliation
Net Cash and Cash Equivalents Provided by Operating Activities to Free Cash Flow
1
$ in thousands, unaudited)
3 months ended
12/31/2024
12/31/2023
12/31/2022
2023 to
2024 YoY%
Net cash and cash equivalents provided by
operating activities
$ 184,491
$ 143,305
$ 119,219
29%
Deduct:
Acquisition of property and equipment
63,860
65,197
157,205
2%
Free Cash Flow
$ 120,631
$ 78,108
$ 37,986
54%
40
For endnote descriptions, see
final slide
.
Personnel Costs excl. Stock-Based Compensation Expense by Department
$ in thousands, unaudited)
3 months ended
12/31/2024
12/31/2023
12/31/2022
2023 to
2024 YoY%
Infrastructure and trust & safety
$ 24,355
$ 25,518
$ 16,980
5%
Research and development
131,256
128,407
106,693
2%
General and administrative
29,921
32,079
27,155
7%
Sales and marketing
14,702
12,641
9,211
16%
Total Personnel Costs excl. SBC
$ 200,234
$ 198,645
$ 160,039
1%
41
Depreciation and Amortization Expense by Department
$ in thousands, unaudited)
3 months ended
12/31/2024
12/31/2023
12/31/2022
2023 to
2024 YoY%
Infrastructure and trust & safety
$ 42,479
$ 47,030
$ 36,004
10%
Research and development
7,663
6,935
6,004
10%
General and administrative
844
499
441
69%
Sales and marketing
325
67
88
385%
Total Depreciation and Amortization Expense
$ 51,311
$ 54,531
$ 42,538
6%
42
Stock-Based Compensation Expense by Department
$ in thousands, unaudited)
3 months ended
12/31/2024
12/31/2023
12/31/2022
2023 to
2024 YoY%
Infrastructure and trust & safety
$ 29,382
$ 26,437
$ 16,238
11%
Research and development
180,459
174,917
118,921
3%
General and administrative
35,658
33,904
27,511
5%
Sales and marketing
12,737
15,421
6,786
17%
Total Stock-Based Compensation Expense
$ 258,236
$ 250,679
$ 169,456
3%
43
44
Non-GAAP Financial Measures Definitions
This presentation contains the non-GAAP financial measures bookings, Adjusted EBITDA, and free cash flow. We use this non-GAAP financial information to evaluate our ongoing operations, for
internal planning, and forecasting purposes. We believe that this non-GAAP financial information may be helpful to investors because it provides consistency and comparability with past financial
performance.
Bookings
is defined as revenue plus the change in deferred revenue during the period and other non-cash adjustments. Substantially all of our bookings are generated from sales of virtual currency,
which can ultimately be converted to virtual items on the Roblox Platform. Sales of virtual currency reflected as bookings include one-time purchases or monthly subscriptions purchased via payment
processors or through prepaid cards. Bookings also include an insignificant amount from advertising and licensing arrangements. We believe bookings provide a timelier indication of trends in our
operating results that are not necessarily reflected in our revenue as a result of the fact that we recognize the majority of revenue over the estimated average lifetime of a paying user. The change in
deferred revenue constitutes the vast majority of the reconciling difference from revenue to bookings. By removing these non-cash adjustments, we are able to measure and monitor our business
performance based on the timing of actual transactions with our users and the cash that is generated from these transactions.
Free cash flow
represents the net cash and cash equivalents provided by operating activities less purchases of property, equipment, and intangible assets acquired through asset acquisitions. We
believe that free cash flow is a useful indicator of our unit economics and liquidity that provides information to management and investors about the amount of cash generated from our core
operations that, after the purchases of property, equipment, and intangible assets acquired through asset acquisitions, can be used for strategic initiatives, including investing in our business, making
strategic acquisitions, and strengthening our financial position.
Adjusted EBITDA
represents our GAAP consolidated net loss, excluding interest income, interest expense, other income/(expense), provision for/(benefit from) income taxes, depreciation and
amortization expense, stock-based compensation expense, and certain other nonrecurring adjustments. We believe that, when considered together with reported GAAP amounts, Adjusted EBITDA
is
useful to investors and management in understanding our ongoing operations and ongoing operating trends. Our definition of Adjusted EBITDA may differ from the definition used by other companies
and therefore comparability may be limited.
Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set
of
accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to
evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial information as a tool for comparison. As a result, our non-GAAP financial information is presented for
supplemental informational purposes only and should not be considered in isolation from, or as a substitute for financial information presented in accordance with GAAP.
A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial used in this presentation is included in this presentation. We encourage investors and others to
review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP financial measures in conjunction with the
most directly comparable GAAP financial measure.
45
Note Regarding Operating Metrics
We manage our business by tracking several operating metrics, including those listed below. As a management team, we believe each of these operating metrics provides useful information to investors and others. For
information concerning these metrics as measured by us, see “Managementʼs Discussion and Analysis of Financial Condition and Results of Operations” in the most recently filed Quarterly Report on Form 10-Q.
While these metrics are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how our platform is used. These metrics are
determined by using internal data gathered on an analytics platform that we developed and operate and have not been validated by an independent third party. This platform tracks user account and session activity. If we fail to
maintain an effective analytics platform, our metrics calculations may be inaccurate. These metrics are also determined by certain demographic data provided to us by the user, such as age or gender. If our users provide us
with
incorrect or incomplete information, then our estimates may be inaccurate.
We believe that these metrics are reasonable estimates of our user base for the applicable period of measurement, and that the methodologies we employ and update from time-to-time to create these metrics are reasonable
bases to identify trends in user behavior. Because we update the methodologies we employ to create our metrics, our current period daily active users or other metrics may not be comparable to those in prior periods. For
example, in 1Q23, we revised the methodology we use to calculate average monthly unique payers for payers who purchased prepaid cards through one of our specified distributors; the impact to average new & returning
monthly unique payers and average bookings per monthly unique payer in periods prior to 1Q23 was not significant.
Finally, the accuracy of these metrics may be affected by certain factors relating to user activity and systems and our ability to identify and detect attempts to replicate legitimate user activity, often referred to as botting.
Average daily active users (“DAUs”)
We define a DAU as a user who has logged in and visited Roblox through our website or application on a unique registered account on a given calendar day. If a registered, logged in user visits Roblox more than once within a
24-hour period that spans two calendar days, that user is counted as a DAU only for the first calendar day. We believe this method better reflects global engagement on the platform compared to a method based purely on a
calendar-day cutoff. DAUs for a specified period is the average of the DAUs for each day during that period. As an example, DAUs for the month of September would be an average of DAUs during that 30 day period.
Other companies, including companies in our industry, may calculate DAUs differently.
We track DAUs as an indicator of the size of the audience engaged on our platform. DAUs are also broken out by geographic region to help us understand the global engagement on our platform.
The geographic location data collected is based on the IP address associated with the account when an account is initially registered on Roblox. The IP address may not always accurately reflect a userʼs actual location at the
time they engaged with our platform. Historically, we have grouped Xbox users into Rest of World for the purposes of our reporting (we note that since the fourth quarter of 2020, Xbox users have represented less than 2% of
our
total quarterly DAUs and quarterly hours engaged). Beginning in the fourth quarter of 2023, Xbox users are reported in their respective geographies.
Because DAUs measure account activity and an individual user may actively use our platform within a particular day on multiple accounts for which that individual registered, our DAUs are not a measure of unique individuals
accessing Roblox. References to “user” or our “user base” in this supplement refer to users as described in our definition of DAUs. Additionally, if undetected, fraud and unauthorized access to our platform may contribute, from
time to time, to an overstatement of DAUs. In many cases, fraudulent accounts are created by bots to inflate user activity for a particular developerʼs content on our platform, thus making the developerʼs experience (which refer
to the titles that have been created by developers) or other content appear more popular than it really is. We strive to detect and minimize fraud and unauthorized access to our platform.
46
Note Regarding Operating Metrics (continued)
Hours engaged
We define hours engaged as the time spent by our users on the platform. We calculate total hours engaged as the aggregate of user session lengths in a given period. We estimate this length of time using internal company
systems that track user activity on our platform as discrete events, and aggregate these discrete activities into a user session. A given user session on our platform may include, among other things, time spent in experiences, in
Roblox Studio, in platform features such as chat and avatar personalization, in the Creator Store, and some amount of non-active time due to limits within the tracking systems and our estimation methodology. As we continue to
develop new features and products, we expect that our user session calculation will continue to evolve. We continue to review our user session calculation methodologies and may develop alternative calculation methods to
increase consistency and accuracy in future periods.
We track hours engaged as an indicator of the user engagement on our platform. Hours engaged are also broken out by geographic region to help us understand the global engagement on our platform.
We continuously strive to increase the sophistication of our company systems to detect different user activities, including botting, non-active time and other activities across all devices. As we continue to improve our ability to
detect and deter certain user behaviors on the Platform and different devices, including unauthorized use of our Platform, we may see an impact to our overall hours engaged as our measurement systems evolve and our efforts
to reduce botting become more successful.
Average Bookings per Daily Active User (“ABPDAU”)
We define ABPDAU as bookings in a given period divided by the DAUs for such period. We primarily use ABPDAU as a way to understand how we are monetizing across all of our users through the sale of virtual currency and
subscriptions. ABPDAU is also broken out by geographic region to help us understand the global monetization on our platform.
Average new monthly unique payers
We define new monthly unique payers as user accounts that made their first payment on the platform, or via redemption of prepaid cards, during a given month. Average new monthly unique payers for a specified period is the
average of the new monthly unique payers for each month during that period. Because we do not always have the data necessary to link an individual who has paid under multiple user accounts, an individual may be counted as
multiple new monthly unique payers.
Average returning monthly unique payers
We define returning monthly unique payers as user accounts that have made a payment on the platform, or via redemption of prepaid cards, in the current month and in any prior month. Average returning monthly unique
payers
for a specified period is the average of the returning monthly unique payers for each month during that period. Because we do not always have the data necessary to link an individual who has paid under multiple user accounts,
an individual may be counted as multiple returning monthly unique payers.
47
Note Regarding Operating Metrics (continued)
Monthly repurchase rate
We define monthly repurchase rate as the returning monthly unique payers in the current month, divided by the sum of the prior monthʼs new monthly unique payers and returning monthly unique payers. Average monthly
repurchase rate for a specified period is the average of the monthly repurchase rates for each month during that period.
Average bookings per monthly unique payer
We define average bookings per monthly unique payer as bookings in the specified period divided by the average monthly unique payers for the same specified period.
3
Beginning 2Q24, the estimated average lifetime of a payer changed from 28 months to
27 months.
4
Revenue and bookings are broken out by geographic region based on the billing
country
of our payers at the time of purchase, to help us understand the global engagement on
our platform. The billing address may not always accurately reflect a payerʼs actual
location at the time of purchase.
5
Infrastructure and Trust & Safety expenses, excluding personnel, stock-based
compensation, and depreciation and amortization expenses.
6
Net liquidity represents cash, cash equivalents, and short-term and long-term
investments, less long-term debt, net.
7
Amounts shown for long-term debt, net represents the net carrying amount of the
senior notes due 2030 and beginning with 2Q23, also include the non-eliminated
carrying amount of notes issued by the Companyʼs fully consolidated joint venture; the
principal amount of the senior notes due 2030 is $1.0 billion and the principal amount of
the non-eliminated portion of the notes associated with the fully consolidated joint
venture is $14.7 million.
8
Our revenue guidance assumes that there are no material changes in estimates used in
our revenue recognition, such as the estimated average lifetime of a paying user.
48
Endnotes
Note: Amounts reported in millions are rounded based on the amounts in thousands. As a result,
the sum of the components reported in millions may not equal the total amount reported in millions
due to rounding. In addition, percentages presented are calculated from the underlying numbers in
thousands and may not add to their respective totals due to rounding.
1
Bookings, Adjusted EBITDA, and Free Cash Flow are non-GAAP financial measures that
we believe are useful in evaluating our performance and are presented for
supplemental
information purposes only and should not be considered in isolation from, or as a
substitute for, financial information presented in accordance with GAAP. For further
information, please refer to definition and reconciliation slides within the presentation
and our annual and quarterly SEC filings.
2
Historically, we have grouped Xbox users into RoW for the purposes of our reporting
(we note that since 4Q20, Xbox users have represented less than 2% of both our
quarterly DAUs and hours engaged). Beginning in 4Q23, Xbox users are reported in
their respective geographies. Under the previous reporting methodology, DAUs, Hours
Engaged, and ABPDAUs YoY growth would have been as follows:
4Q23
1Q24
2Q24
3Q24
DAUs
US & Canada
14%
10%
17%
22%
Europe
19%
12%
12%
13%
APAC
26%
26%
30%
37%
ROW
26%
22%
26%
34%
Hours Engaged
US & Canada
13%
9%
19%
24%
Europe
19%
10%
14%
15%
APAC
26%
23%
39%
45%
ROW
27%
20%
27%
35%
4Q23
1Q24
2Q24
3Q24
ABPDAUs
US & Canada
6%
6%
3%
9%
Europe
15%
10%
10%
20%
APAC
7%
8%
6%
0%
ROW
17%
10%
6%
3%
