Roblox reported its second-quarter numbers, posting $1.56 billion in bookings, marking an 8% rise from last year. This came close to the low end of its guidance and slightly under what analysts had expected.
Revenue climbed 36% to $1.47 billion, fueled by a 10% increase in daily active users to 123 million and 29 billion hours spent on the platform. However, monetization per hour showed signs of weakening as users shifted from high-spending viral games to evergreen titles that generate less revenue.
Free cash flow hit $294 million, while adjusted EBITDA reached $152 million, boosted by a $34 million settlement add-back.
Despite these mixed signals, Oppenheimer stuck with its Outperform rating on Roblox stock, noting steady user retention and a diverse content mix. Yet, they remain cautious as the timeline for a rebound in monetization is still unclear. Roblox's stock has dropped 65% over the past year, closing recently at $48.67.
The company pulled its full-year guidance, citing changes to its search and discovery algorithm. The update prioritizes long-term user engagement, focusing on 28-day retention rates, which seems to be putting pressure on near-term bookings expected to fall 14% to 18% in Q3.
Other analysts have trimmed their price targets, with Canaccord lowering its target to $58 from $80 but keeping a Buy rating, while BTIG downgraded Roblox to Sell with a $30 target.
