Roblox tanked 15% on Q4 results: ‘user metrics look good’

Roblox Corp (NYSE: RBLX) shares tanked 15% after-hours on Q4 results that fell shy of Wall Street estimates. The social-gaming company saw a nearly 1.5x annualised increase in its quarterly loss.

Key takeaways from the Q4 results

Roblox said it lost $143.3 million in the fourth quarter (25 cents per share). This compared to last year’s $58.7 million in net loss (30 cents per share), as per the earnings press release.

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It generated $568.8 million in revenue – a YoY growth of 83% as bookings jumped from $642.3 million to $770.1 million. According to FactSet, experts had forecast a much narrower 12 cents of per-share loss on a slightly higher $772 million in bookings.

Roblox had 49.5 million DAUs on average at the end of Q4 or 33% higher than last year. In January, the California-based company added, DAUs jumped further to 54.7 million, representing a 32% growth versus the comparable period of last year.

Analyst reacts to Roblox’s earnings report

Commenting on the earnings report, LightShed Partners’ Brandon Ross said on CNBC’s “Closing Bell”:

The clear issue in the quarter was on the monetisation side. It’s something that a lot of investors had seen coming because it was evident in some of the data sources. Where we’re squarely focused right now is on the user sided, and user metrics look good.

Free cash flow printed at $558 million for the full year – an increase from 2020’s $411.2 million. Reiterating his “buy” rating with a price target of $85 a share that represents a 35% upside from here, Ross added:

Like any early-stage company, we see that user growth and engagement is really growing and monetisation can be layered on after. And this company has a ton of different levers that it’s going to pull on the monetisation side.