Roblox stock drops after reported financial loss for Q3 2022

Roblox reported a quarterly loss, which resulted in shares falling over 13%. The popular metaverse game spent funds on hiring and developing its infrastructure, but even with the growth of daily active users, the stock’s one-day performance was the lowest ever since Roblox went public in March 2021.

Robox shared a Q3 2022 loss of $297.8 million (50 cents a share), compared with a loss of $74.0 million (13 cents a share) in the third quarter of 2021. Revenue increased to $517.7 million from $509.3 million in a year. Bookings went up 10% from last year’s $637.8 million, reaching $701.7 million. Revenue also rose 2% over the year, amounting to $517.7 million.

The California-based company reported 58.8 million average daily active users, up 24% from a year earlier and up from 52.2 million DAUs in Q2 2022. During the third quarter, users spent 13.4 billion hours engaged in Roblox, a 20% annual increase.

The gaming industry’s growth has slowed this year, with lockdowns easing up and people being able to go out in real life and engage with each other without any restrictions. The current inflation significantly affecting the whole globe is another reason companies aren’t seeing impressive results.

Roblox’s situation is not as bad as that of Twitter or Meta, for example, and the company said they plan to hire a few new employees.

The company’s CEO, David Baszucki, said Roblox will keep on “creating innovative technologies to enable deeper forms of immersion, communication, and expression to further enhance the value of the platform.”

“We are pleased with the third-quarter growth in users, engagement and bookings, which demonstrates the significant progress we are making on key platform initiatives such as aging up and international growth. At the same time, we are continuing a disciplined capital allocation strategy focused on maximizing long-term shareholder value,”

said Michael Guthrie, Roblox’s CFO.