Key takeaways
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Roblox shares fell approximately 27 per cent after second-quarter bookings, users and engagement missed expectations.
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Third-quarter bookings are forecast at US$1.58 billion to US$1.65 billion, representing a year-over-year decline of 14 to 18 per cent.
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Roblox said users are shifting from highly monetized viral <a href="https://comicvibe.com/3-new-day-one-games-top-the-xbox-game-pass-ultimate-chart/” title=”3 New Day One Games Top the Xbox Game Pass Ultimate Chart”>games to newer and evergreen titles that generate less spending per hour.
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BMO Capital and Deutsche Bank downgraded the stock, cutting their price targets to US$45 and US$38, respectively.
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Revenue and free cash flow remained strong, but investors questioned how long the platform’s transition would weigh on monetization.
Roblox Corporation (NYSE:RBLX) shares plunged approximately 27 per cent Friday after the gaming platform issued a weaker-than-expected bookings forecast and reported softer user and engagement figures.
The stock fell to around US$35.60 after reaching an intraday low of US$33.89. The decline erased billions of dollars from Roblox’s market value and extended its year-to-date loss to more than 40 per cent.
Investors focused on evidence that changes intended to improve safety, content discovery and long-term user retention are reducing near-term spending on the platform.
Bookings growth slows despite higher revenue
Second-quarter bookings increased 8 per cent year over year to US$1.56 billion but finished at the bottom of Roblox’s guidance and below the approximately US$1.60 billion consensus forecast.
Bookings measure purchases of the company’s Robux virtual currency and provide a more immediate indication of user spending than reported revenue, which is generally recognized over the estimated lifetime of a paying user.
Revenue rose 36 per cent to US$1.47 billion, exceeding Wall Street’s US$1.42 billion estimate. Roblox reported a net loss attributable to common shareholders of US$183 million, or US$0.26 per share, compared with US$278 million, or US$0.41 per share, one year earlier.
Free cash flow increased 66 per cent to US$294 million, while operating cash flow rose 60 per cent to US$318 million.
However, daily active users reached 123 million, below the 128.71 million analysts expected. Users increased 10 per cent from a year earlier but declined 7 per cent sequentially. Hours engaged rose 5 per cent to 29 billion, also missing estimates.
Algorithm changes reduce spending per hour
Roblox attributed the bookings weakness to declining monetization per hour, particularly among younger users in the United States and Canada.
Engagement shifted away from highly monetized viral games released in 2025 and towards newer and established titles generating less hourly spending. Changes to Roblox’s Recommended for You algorithm added to the pressure by promoting games with stronger retention rates, even when those experiences produce less immediate revenue.
