Roblox reported Q4 2021 earnings today, annnd… they probably wish they didn’t have to. 😬 Here’s what happened:
Bookings: $770.1 million, +20% YoY (analysts expected $772 million)
Revenue: $568.8 million, +83% YoY
Loss per share: $0.25 adjusted (analysts expected a loss of -$0.13)
Roblox uses Bookings to represent a commitment to spend money. Revenue realizes the actual commitment as spent. A good example of how this works, practically speaking, is when a user buys Robux (the game’s in-game currency.) Once users spend that money, the Booking is assigned as Revenue. 💡
Revenue is the actual figure that Roblox weighs against its losses. Because of that, the company’s $708 million worth of costs and expenses well outweighed its $568.8 million in revenue. Although that loss is probably disappointing, Roblox’s loss actually narrowed YoY. The company’s biggest costs were Research and Development (24.5% of costs) and Developer exchange fees (22.5% of costs.) That said, most sources of Roblox’s costs and expenses were pretty balanced, with the exception of sales and marketing (which was significantly less than the other categories.)
Losses aside, Roblox’s Bookings growth slowed significantly in Q4 2021. Bookings came in about $1.9 million lower than analysts expected, which is one reason Roblox stock responded with a violent drop. 📉
The other reason for the drop? Bookings are usually a leading indicator of Revenue, and the company’s key metric estimates from January 2022 are alarming. Roblox’s bookings figure for the month was up just 2-3% YoY, presumed to be $220-$223 million. 🚨 These figures indicate that Roblox’s revenue is about decelerate rapidly.
Hopefully that’s just how thinks look — a trend, not reality. There are still two more months in Q1, so it’s possible Roblox could see a vicious uptake in post-pandemic spending on its platform from its 55 million daily active users. Roblox better hope for that, because today’s selloff was no laughing matter. 🤭
$RBLX fell 12.7% in afterhours.