Roblox Falls After Quarterly Bookings Miss Analysts’ Views

(Bloomberg) — Roblox Corp., the developer of a video-game platform that’s widely used by preteens, fell as much as 7.8% in late trading after reporting second-quarter bookings that missed Wall Street estimates.

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Bookings, a measure of sales, rose to $665.5 million, the San Mateo, California-based company said Monday, missing the $683.3 million average of analysts’ estimates. In July, daily active users rose 8% from the prior month to 46.6 million. Roblox doesn’t provide forecasts.

To keep growing, management is trying to broaden the user base beyond kids, and is targeting office workers and even older adults. It’s also working to bring various brands, like Gucci, onto the platform, and expanding internationally.

“We are building out a facility in India, which we think has enormous growth potential,” Chief Executive Officer David Baszucki said in a phone interview.

The company, whose users create games for its virtual world, saw good growth in Japan and China in the latest quarter, Baszucki said. Some games developed by users in China are gaining popularity internationally, he said.

Shares of Roblox, which began trading in March at $64.50, fell as low as $73.34 in extended trading after quarterly results were announced, before paring the loss. The shares retreated 5.2% to $79.57 at the close of regular trading in New York.

As Roblox adds more countries and features, the company’s user base is growing older: The second quarter marked the first time that more than 50% of its engagement came from players over age 13.

Roblox is also developing social-media features to enhance the experience. On Monday, the company announced that it acquired Guilded Inc., a closely held company that offers gaming communities tools like video chat and integrated calendars.

“The biggest challenge Roblox faces is sky high expectations,” David Cole, founder of the consulting firm DFC Intelligence, said before the report. “The market growth potential for Roblox is large, which is why investors are so enthusiastic.”

Roblox announced earlier it’s delaying its employees’ return to the office to January from September. But pandemic-like disruptions, if they return in the fall, could benefit the company, which grew fast during last year’s lockdowns.

“We hope delta has very little impact, we want people to go outside,” Baszucki said. “The more delta locks people down, the more one might assume people communicate with each other virtually rather than physically.”

(Updates CEO interview starting in fourth paragraph.)

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