Roblox’s first quarter results were met with a positive market response, reflecting strong revenue growth and user engagement. Management attributed the performance to robust daily active user increases, particularly among users over 13 and in international markets like Japan and India. CEO David Baszucki highlighted that “our top 100 creators now earned $6.7 million on average in the last 12 months,” underscoring the strength of the creator ecosystem. Operational efficiencies and improvements in trust and safety, driven by AI, also contributed to improved margins, with CFO Mike Guthrie noting that “operating cash flow grew at over 70% year-over-year.”
Is now the time to buy RBLX? Find out in our full research report (it’s free).
Roblox (RBLX) Q1 CY2025 Highlights:
- Revenue: $1.04 billion vs analyst estimates of $1 billion (29.2% year-on-year growth, 3.3% beat)
- The company slightly lifted its revenue guidance for the full year to $4.33 billion at the midpoint from $4.3 billion
- Operating Margin: -24.6%, up from -37.7% in the same quarter last year
- Daily Active Users: 97.8 million, up 20.1 million year on year
- Market Capitalization: $68.59 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Roblox’s Q1 Earnings Call
- Matthew Cost (Morgan Stanley) asked about supporting continued genre expansion and growth from smaller developers. CEO David Baszucki explained that technology upgrades, competitive economics, and improved discovery tools are core to this strategy.
- Matthew Cost (Morgan Stanley) followed up on differential pricing’s impact on margins and the implications of recent legal developments. CFO Mike Guthrie said results are positive but still early, with further benefits possible as adoption increases.
- Jason Bazinet (Citigroup) questioned the platform’s resilience in a potential economic downturn and whether innovation is necessary to offset macro headwinds. Baszucki responded that low-cost entertainment and a large non-spending user base offer some insulation, though innovation remains key to market share gains.
- Clark Lampen (BTIG) inquired about opportunities to improve monetization per user, especially with new ad models and payment methods. Baszucki and Guthrie pointed to genre expansion and pricing initiatives as primary drivers, with gift cards and direct payments augmenting monetization.
- Cory Carpenter (JP Morgan) asked about the rollout of Google ad integration and reinvestment priorities. Management said ad revenue is still small but growing, with reinvestment focused on creator payments and platform enhancements.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will watch for (1) the pace and breadth of international user growth and engagement, especially in high-growth markets like Japan and India; (2) adoption and impact of AI-driven creator tools and automated pricing models; and (3) measurable progress in advertising revenue as new partnerships and formats scale. Continued improvements in margin discipline and operational efficiency will also be important markers for execution.
Roblox currently trades at $101.70, up from $67 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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