Roblox Stock Hits 2-Year High After Q3 Bookings Beat: Retail Cheer Grows On Raised Guidance

Roblox Corp. ($RBLX) shares jumped nearly 20% at market open on Thursday, hitting a two-year high of $52.65, despite mixed results in its third-quarter earnings report. 

The company posted a loss of $0.37 per share, slightly better than the anticipated loss of $0.39, while revenue fell short of expectations, coming in at $918.95 million against the estimated $1.02 billion.

The uptick in Roblox stock seems to stem from its third-quarter bookings of $1.13 billion, a 34% increase from the previous year, which exceeded analysts' expectations of $1.03 billion. 

The California-based company also raised its full-year guidance, now anticipating bookings between $4.34 billion and $4.37 billion for fiscal 2024, surpassing its previous range of $4.18 billion to $4.23 billion. 

Analysts view bookings as a more reliable measure of the company's future growth than traditional revenue, as Roblox gradually recognizes most of its revenue over nine quarters.

The growth in bookings was partly driven by the recent launch of Roblox on PlayStation. Excluding this expansion into console gaming, growth still stood at 28%. 

Roblox’s daily active users, which correlated to the growth in bookings, also rose by 27% year-over-year (YoY), and engagement hours increased by 29%. These metrics highlight the platform's increasing popularity and engagement among users.

Retail sentiment on Stocktwits has shifted dramatically to ‘extremely bullish’ (94/100) from ‘extremely bearish’ before the earnings on Wednesday. Message volume around the stock has also surged to ‘extremely high’ (94/100) from ‘normal’ a day ago.

Users on the platform appear optimistic, showing enthusiasm for the company’s strong performance despite allegations from short-seller Hindenburg Research calling Roblox an “x-rated pedophile hellscape, exposing children to grooming, pornography, violent content and extremely abusive speech.” 

It accused Roblox of lying to investors and regulators about its metrics and keeping two sets of books for counting users.

In a message to shareholders on Thursday, Roblox emphasized its commitment to creating a safe online environment for users. “Because our platform was originally created for children and now includes all ages over 5, our policies are purpose-built to be strict,” it said.

Users over 13 are now a majority of the platform, which was originally designed for younger children.

The stock has gained 19% so far in 2024.

For updates and corrections email newsroom@stocktwits.com.

Read more: Intel Shares In Focus As Analysts Express Caution Amid Historic Low, But Retail Sentiment Remains Bullish

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