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Roblox Corp - $RBLX - Earnings Analysis: Consistent growth in revenue, bookings, and DAUs.

By sagebytes —

Business Model

Roblox generates revenue primarily through the sale of Robux, a virtual currency, which users purchase to spend on virtual items and experiences within the platform. They also generate revenue through monthly subscriptions and a small amount through advertising and licensing arrangements.

Revenue Sources

  • Sales of Robux (virtual currency) for virtual items and experiences.
  • Monthly subscriptions.
  • Advertising and licensing arrangements (insignificant amount).

Income Statement Analysis

  • Revenue increased by 32% year-over-year, reaching $988.2 million, exceeding the high end of guidance.

Balance Sheet Analysis

  • The company has $4.0 billion in cash, cash equivalents, and investments.

Cash Flow Analysis

  • Net cash from operating activities increased by 29% year-over-year to $184 million.
  • Free cash flow increased by 54% year-over-year to $121 million.

Capital Allocation

Roblox is focused on reinvestment into the platform (perf quality, live ops, discovery, economy), and driving more economics for the developer community. They are commited to routing 10% of the gaming market content ecosystem

Management Commentary

Q4 revenue $988,000,000 up 32% year on year ahead of our high end of guidance of $960

DAUs in Q4, '80 '5 point '3 million dollars up 19% year on year.

Expect operating expenses to remain at or below Q3 2024 levels through 2025

In Q4 last year, we launched a new platform, which is PlayStation

Overall Sentiment: Positive, emphasizing strong results and strategic initiatives for future growth and innovation. Concerns were raised about playstation launch

Recommendation

Rating: Buy

Reason for Rating: Strong growth metrics, healthy cash flow, and continued investment in platform and developer community support a buy rating. Management's focus on innovation and expansion provides a positive outlook.

Disclaimer: This analysis is based on company filings and public information. It is for informational purposes only and not financial advice. Past performance does not guarantee future results.

Generated on: 2/7/2025, 4:14:58 AM