RBLX Q3 2022 Earnings

Call Details

• Call Title: Roblox Corporation Q3 2022 Earnings Call
• Date: November 9, 2022 at 1:30 PM UTC
• Management Team:
  • Stefanie Notaney (Head of Investor Relations)
  • David Baszucki (Chief Executive Officer)
  • Mike Guthrie (Chief Financial Officer)

Call Summary

Financial Performance

• Roblox reported $701 million of bookings in Q3 2022, which management stated was up 10% year on year and up 15% on a currency-adjusted basis.
• Reported revenue for Q3 2022 was $517 million, which management stated was up 2% year on year under GAAP accounting and subject to revenue deferral policies.
• Management increased the payer lifetime assumption from 25 to 28 months, which reduced recognized Q3 GAAP revenue versus the prior assumption and, they stated, resulted in reported Q3 revenue being $111 million lower than it would have been under the prior lifetime.
• Daily active users were reported at 58.8 million in Q3 2022, which management stated was up 24% year on year.
• Management reported an all-time peak payer count of 12.9 million in Q3 2022 and highlighted sequential acceleration in payers from Q2 to Q3.
• Key developer engagement metrics showed developers with experiences accumulating over 100,000 hours were up 54% and developers with experiences over 1,000,000 hours were up 47% year on year.
• Management released preliminary October metrics showing the first 27 days of October bookings up 13% on an adjusted basis and DAUs of 57.8 million up 14% year on year for that period.

Guidance

• The company reiterated a target to operate with an EBITDA margin below 10% through at least 2023 as discussed on the call.
• Management stated they will continue hiring through 2023 and plan to keep stock-based compensation in a controlled range while investing across product, infrastructure, trust and safety, and developer ecosystem.
• No specific numeric revenue or bookings guidance dates were provided for new product rollouts such as dynamic heads or immersive advertising, and rollout timing was described qualitatively as testing now and broader rollout next year.
• Management said they expect infrastructure and trust-and-safety investments to continue through 2023 with the expectation of cost leverage emerging after the investment period into 2024.
• Mike Guthrie said developer exchange fees have been running at approximately 22%–23% of bookings and that the company is not planning to target leverage in that line in the near term.
• The company disclosed PP&E investment of a little over $300 million in the current year and said they expect to spend roughly another $300 million next year with a decline in infrastructure-specific spend next year.