Roblox (RBLX) 1 Aug 242024 Q2 Earnings call transcript

Good morning. My name is Pam. Welcome, everyone, to Roblox' Second Quarter 2024 Earnings Conference Call. [Operator Instructions] I'd like to turn the conference to Ms. Stefanie Notaney, the Head of Financial Communications.

your begin now may conference. You

Co-Founder morning, Thank Guthrie. our me you Baszucki, Block's joining Thank session you. today our to Mike World With Good Q&A results. discuss for XXXX David everyone. Roblox' CFO, CEO, and is and QX

letter, SEC filings, can of call and replay supplemental press release, shareholder website. found on slides be today's our Our a Investor Relations

from and results forward-looking and Our which our are these materially uncertainties may to XX-K most risks, our actual cause include of statements, filings, reports described SEC forward-looking assumptions today assumptions our could and on commentary to that description in in statements. Form those differ XX-Q. subject Form recent including are A included uncertainties risks,

predictions You these should of to any except We statements, not law. update obligation disclaim rely events. on as required statements future by as our forward-looking

certain we the release measures. metrics be found discuss During in and With this I'll between also slides. non-GAAP press non-GAAP Dave. call, GAAP over supplemental to that, can financial our will Reconciliations call and turn

with to update then on dialogue touch going prospects. Thank to our optimistic kick growth it ago. why the base Roblox. our about Overall, months earnings we're I'll we a XXXX X call. quarter on earnings solid started numbers. a was call validate everyone, Hey, an the I'm with this as We'll welcome, bit off Roblox we QX And you. give our for future

are quarter, the strong metrics for back north numbers all rates the year-on-year with and of on Starting margin improvements. XX% growth

$XXX was was beat And in QX million. range That's gain. of that to $XXX revenue XX% guidance, $XXX.X a million. million in which year-on-year the our Our

guidance million million That $XXX to were bookings our year-on-year, XX%. of $XXX be million, range $XXX Our would that's

XX% XX% particularly regions, Japan, XXXX. number us. strong had now at with that's gaming year-on-year, at over growth world, strong are saw our XX and of our XX% in were DAUs since the year-on-year have total XX%. U.S. We Canada XX X across million, India growth. for are QX we year-on-year that's potential all And markets of at our largest growing of fastest DAUs, market their our over year-on-year. And record there $XX.X a DAUs the DAUs enormous growing an XX% DAUs

hit Our in year-on-year. DAUs, and trends growth that similar engaged similar a year-on-year India U.S., record hours XX% hours. XX% in Japan and And XX% growth billion Japan our That's XX $XX.X engagement year-on-year was with growing in growing to hours India, over with and the strongest XX%.

roughly $XXX that consolidated to compared Our $XXX million million of million. what guidance to guided We better loss was than net our $XXX we were $XX to. million

year-on-year. to free XXX% while million our versus costs our to We're go continuing time, to continue in see addition control. $XX.X the our top up up benefits lot continues of discipline, in to of of a quality QX, highlights platform $XXX same operations of cash ago year where under show $XXX fixed all strong on million. the it investments million, at there. line, was flow Net we keeping negative cost we're from flow cash And the a QX couple And was

Importantly, to coming our infra a are lot infra and X% expenditures year-on-year. initiatives. efficiency The lower trust and were safety of efficiencies

we've year-on-year. the move. note AI platform. add on to We are work make San that that them note our safety the expenses, were than number we'll would continuing consolidated personnel But office That all able of our Mateo And in to to flatness year-on-year. efficiency we a our rather and to contributed not unfortunately, employees flat moderation And to was remote. of in

And proof areas and growth group areas driving the AI and our platform, the for our hire, including continue that platform. areas to that our especially ads do are are key We quality economy team. safety us, on in

the areas. health. bit including going that events and months live going we of called were event that we're early Games. QX. improvements we Subsequent see to ops, numbers growth highlighted I'm seen taking shared X was that We platform-wide that, talk March, bringing search which we have offset we've And just off rates in hunt. to our to we with next key positive on Okay, with the now impacts talked as unseasonable live about steps a One seeing ecosystem back we you on had signs are kicked call, can continued, a with in our discovery. earnings into and about we and by the in X ago, QX. We shared that the focus done classic,

perf We talked executing -- and about been company. and quality. X in big to and we the just everything on about also We've do else really we those addition talked in economy initiatives improvements,

content. we've discovery of diversity a discover new On drive side, taken lot and the users search and awesome steps help our to the

intelligent to we PIC. of up-and-coming and really brought releases today's have new call algorithm, curation with we In AI-driven that addition forward our content content

their our We and seen ability have And to properties creators homepage. ability boost our also to we've our marketplace. buy increase in the an the of bubbling increased of with sponsored for content top variety launch the to tiles on

refine and are We continuing economy. optimize our to

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help the with working optimization, also around developers launch price is will which of world. community the developer Our

join and contribute stability, throughout our quality end that bunch growth from We've rates, metrics on And things low raw continued everything up to times, the very a on that our devices improvements of frame to rate. down Android affect perf stack platform. make to devices our all performance, in quality, and in

economy. believe amongst we active public, expanding social our of us daily growth the the of will take learning X to shared to include use went world, gaming, entertainment billion we when and communication, ultimately vectors including the ahead, expanding around users that for ages, growing all Looking users, of we diversity Roblox shopping, case and growing

just And continuing Those show to take to all quick are I look. want growth. a

very, right and a that, have segment that the very we X now, of portion have small within segment. we headroom in enormous Just gaming

long brings Our approach it UGC content. with an of tail extremely

north experiences XX on the -- now over X well north have of of DAUs. sorry, platform with We million XX

Our in to creators pushing any device any are language.

We and expressive bringing MRSA social graph experience communication in. their experience vibrant personalized our a and from avatars XD users built to with have

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ad and there. shopping and and growth with domain, progress manager. advertising product. introduced launched seen want our continued we've IAS We've highlight integrations the We've I to PubMatic. the our ads We've In video third-party just self-serve enhanced

shopping with QX, ago. at date And activations year of Beauty. and from double We the a are is almost XXX, brand now partners went Roblox total testing Walmart real-world to e.l.f. in north cumulative which in the

partners. Couple fun of brand new really

the about IKEA's read we've Me seen have Six work launched Flags. in IKEA where coworker, life their might You real they Netflix Shrek, and store, a also from hub persistent world. IKEA IP virtual store. hired employees activations next to virtual Despicable And

lot the in Ice from Rolling at conference. our more with part Visa. had a We'll Spice, partner, New of platform, share the on Stones, of these updates artists developer we our -- September as Olympics and concert a

chapter. One personal from other Mike interest next has period, to on will a other. new at wanted in some with Mike, on the we his note, our focus our to which I'm transition I that are the move take to search smiling through on Financial begin and Mike CFO is going succession going anticipate Roblox I time. And leader and and Chief to to decided for and process. share each Mike do Officer, pursue his Guthrie together, we're room stay the as

of built Just driving based understand is our works, want on Board lot Mike's Mike And how with to in And XXXX. the to us run our company members the explain to and our investors, leadership quite part Mike amazing an joined and highlight, we had X growth. helped that's cash really past the really contributes how team the that and us employees has helped go help the our journey, business and a Real over company. bookings, years, we've impact throughout growth. absolutely contribution, public, and business contributed the

before to work it's time and Mike, we a as for it say this I fun and personal just glad to So want that we we're also hand note, to working more going together, I a still you, thankful to did together. on keep little to over be have surge you

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company to to And the Thanks, feel pristine enjoyed like Okay. and great I transition. feel position financial flow financial in balance company I've return finding X.X it. the growth, the I cash expanding and forward good to that I Dave. Finance, person just that appreciate a the in years, the just and want reiterate, the look for terms in. where I Head I really about are as last also of helping of are we is sheet conditions. margins leader

really an have time the much and company to at been growth. period so amazing during it's fortune of So been good

of and a where lot able that and year. guidance condition relates XX%. that grew November, do the to want take going last first XX%-plus full the comments reiterate as business of growth. below number know we're that We made talked Bookings, to Day quarter. in bit it Dave at quarter the the maintaining were our mentioned, and Investor we to I about the that as at We our to he little a regarding in be

kind our getting with line, safety. think, falls And the even really a leverage into little for about on We've operating buckets: fixed produced this at about for I quarter our of leverage. cost highlight, trust cost it's the top quarter. really -- talked exit XX% And that is we the Infrastructure, fixed you of getting look growth X and down April, leverage after the bit so the and really challenging

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of There's lot leverage. And significant our to operating infrastructure headcount. other a to mentioned the There's the of office. lot we So part plans area. has Dave return of X a efficient drive a that some getting and behind a been technology place, continue that's efficiency more in And that. of have to to

about look right now, you XX-month we X.X -- at is person supplemental at, bookings this million are per that from at look again, year. last our metric latest materials, numbers a the million was these this that time year, if look X.X you can

increase an our well And that's cost same is the at time, of person XX%. control. under So about per

percentage XX% getting from on a bookings And cost of year leverage so as in fixed this went headcount, of to quarter. personnel XX% as result time a this last costs

Investor improvement So talked very, XXX the cash $XXX Capital last we expenditures, strong up they and about basis to margins $XXX cash Dave well. year. versus free about at million. operating well operating as really at turnaround. sets million points negative and Investor And is mentioned, us million cash be about X and Day overall last turning talked flow very This XXX year, were that above in of about there'll free free of efficiency, million, a $XXX flow cash things big flow the $XX the year flow is we into Day another

cash the guiding free year. we guidance for about over a billion year, to I'll minute, of in And talk here $X.X this are flow full

great So excited and that's a that. really we're about improvement,

questions. through to we'll very and on the So speaking of for year then up guidance, our -- run I'm to right guidance, in going letter. in open it QX It's go but the guidance website now, I'm quickly. through full and It's going

quarter rate growth third $X Bookings, a the third XX%. XX% the of billion to between for for million billion we are quarter $XXX XX% $XXX and XXXX, of of we growth So rate $X.XXX That's guiding XX%. are or revenue year-over-year guiding year-over-year and million. to a between

Our a consolidated net last $XXX year. negative significant million to where over guidance negative improvement or $XXX between loss of were we million,

between to compared those $XX cost million. year. for is million EBITDA negative and of X Adjusted million, $XX.X deferrals and That number adjustments deferred The total $XXX last revenue revenue. deferred increase million $XX an excludes of

is So when for out quarter, our guidance, provided and million which line cash X year-over-year a you're to equivalents midpoint. increase building the XX% your Operating the you by have for at $XXX cash of activities those models, operating to there, third cash analysts the million, flow, items. net $XXX consider

quarter year. back the into continuing leverage this of half operating see can third You and

the will million means midpoint for our be is between and million, -- guidance. $XXX of to which million between our increase guidance the $XX of year-over-year XX% quarter, cash around CapEx be free expect that's a $XXX flow at that we'll We

So fixed free continues, -- continues grow to guiding bookings cost excess average of we're line well what leverage top growth. cash on in flow continues,

billion, we're a growth fiscal come Bookings, to and expect metrics. we XX%. year $X.XX all to between raising in come between XX% we XX% of to year-over-year a full of $X.X billion the of XXXX, now much billion in or our of increase to expect For year-over-year $X.XX $X.XX billion XX%. Revenue, pretty and

million, Adjusted with and loss deferred of EBITDA, cost revenue. million and between increase net in decrease million $XXX a $XXX $XXX -- for for $X.XX year million million deferred $XX of consolidated to $X.XXX Our deferred of revenue range $XXX the the billion. billion of the

the number that the So million net is EBITDA models. adjusted both your and use in $XXX to --

year-over-year Net continues guidance very cash in million the that equivalents operating stay talked to cash at XX% midpoint. the flow, leverage. that range again, growth is our to $XXX or of and or million will to about million. the strong new operating at And $XXX our we guidance CapEx of free show a moves increase flow for million the $XXX of full And and an gave to $XXX about means last that XXX% that increase guidance XX% that $XXX above now quarter. That's we cash million. year-over-year year cash

believe continued, show So we cash good that's we and flow reflected feel in in shape. what's continue financial our and full sheet great leverage QX, in really condition. growth operating The is the guidance. balance free about year line to also has Top we'll and leverage

it with So and that, to questions. up much thanks everybody, for very we're going to open

[Operator Instructions]

We will go Drew at Stifel. first to Crum

best Mike, working a luck And Okay. too. through It was you pleasure with of years. the

achieving the the correct, half have of touched your in looks if or range remarks, you on you touched and of second updated expand this the Can midpoint letter up and just if X source taken the million. see can like of guidance address math for point, you've bookings sources the on upgrade it the $XX to confidence by in range? the the on kind prepared this our You the but in is using shareholder you

we we The that and when the -- March, that lower beginning see had time reflected the we Yes. the X we level improvement cautiously guidance April project ago time this and of data the forward. to optimistic of started that changes enough at implement to we back started in have guidance our didn't were of in call, and the happening major to did half have months

engagement. as seen in has especially in since And bookings very those -- actually then call acceleration user have powerful subsequently we trends, our well. improvements growth in What growth been of an that and in

the what seen the we've quarter, beginning third in back the the the of the second exit of comfortable sort of year and rate growth given at we full again, quarter the bookings So bringing felt of -- up. guidance

that of down to cash to see, the on see leverage the way basically expected why which we kind that, free And continue the we've the top operating metrics below-the-line to increased all of flow. we reflects -- all

impact, -- So in a very, working feel well better. months we like saw is ago and of been never X continuing and simple work of what accelerated that actually the its has the answer we really that's just platform terms to has is health very

it. Got

on bills U.S. X Senate Okay. And separately passed protecting yesterday, then the children just aimed front, online. the at regulatory

thoughts your way, platform? on any and in any the how in require Would this, step-up curious investment? change Roblox advertising? Does Just your plans impacts around it it strategy

question. code. we age back. what safety already I'll code sponsor world. great code, legislation of appropriate always which privacy Yes, of and be of came supported helps case people with that metaphor, to the the start first age around and California in while the forward as the implementing behind design is We're design the a happen the support California And that in it. appropriate of was Roblox much

supportive the we ensure company We're legislation started. ever very we're that to continue foundation So Thanks. privacy. legislation. our and safety monitor helps question. -- Good been of It's since we of

next move Bernie to McTernan Needham. of We'll

strong to Mike, Maybe the being XQ to point just commentary given that's XQ for maybe of to the exit decel the of start the of surprising guidance. just strong guided XQ. and and XQ, rate on stick

So letter there. -- just to you're detail out into I not there's sure more if the go conservatism. shareholder called willing know

like for them? and maybe to take racing, this? communicate provide sports, genres shareholder what like need is up does just to And you how about the letter that tools to then process it Dave, in action new in stand additional developers the talking new And work categories to

our I thing I gross exit this rate And really room. with to guidance to We guidance. and there's strong, to to best We're seen into that. be think the the leave any with the you. careful don't that's point. we've going continue is the perfectly say at and think deceleration -- candid to ourselves Bernie, significant conservative be want Yes,

about and here, that talk really results that's or these make what's we baked to we be from sure and and this. continue about But last whether to we'll days Investor feel not talked we did Day we back better than about into business at now, XX great do our November, want numbers. the what exceed we'll

$XXX touched and north on we data, just front, space arguably gaming it, the go you the On market. your wherever we'll but of more gaming is get into little a billion

many is -- of when talked guidance at right there the at now that. year are so What genres of north regarding some platformers just we're Xs super million of active X.X, and battle, includes for properties strong experiences. Xs we role where our and XX play, bookings community we daily And creator look with genre the and in is our users, maybe or X.X% there's that war about

making that right we we're our aware. we range we now. platform with just in we creator of thought our genres action were about the social, highlight We wide type cooperation is and can research This What gaming. tooling community good and study just a early signal shared engine, to in the the support less game racing, is more did And infra, a seeing the really the open-world tooling, have creator believe genres platform. underutilized sports,

in just of. genres starting So our that take think there's some headroom we there advantage creators to are now

We'll go Carpenter JPMorgan. next at to Cory

the that and your both on saves around touched thinking made on prepared longer-term hoping commerce the expand could on and remarks, but in quarter ad progress how this your opportunities. you your You briefly you initiatives

color. working been are and a main There Yes. we of I'll of areas X pieces additional there's on couple -- have really share implementing.

own on is our very traffic-type ad units simple platform. first The

on right community. uptick increased seen those now. that. creator see homepage can They sponsored. our an own say our You of We've We've

that help took their FIFA, they I for boost to when mentioned and property. actually launch And of advantage example,

as of for more loop really supporting with and progress. of more launched we the like benefit to and close on the seeing more make our integration creators also we're to and finally, and large platform. IAS we're implemented ability unit those traffic And that brands, stuff We subsequent growth term, measure we've give the that going continue are to more And a real-world for accurately even our units video well. shopping, now bring there's brands to more long the so and portals great that quarter-on-quarter the So opportunity experiences. on and more

wants little think to I Mike ... add a

also Yes, want the growth business. the a I forecasting make Cory, the comment to about of business of and rate the

is things with have that to and of of really very the we the ads that's months a that and brands over few is have we and think growing we ability come build One out business built that the shopping, we last years business the great and rapidly. clear a have crystal core is great

continue our growth our while comfortable new clear growth. really be business. to us continue the But our can core that top goals will that the and quite grow to we incremental business we're It's investing business achieve core line in in that we can to to

As fantastic the a to of reaction Dave small changes made. that mentioned, we a product We've very we've have percentage market. seen

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We'll next Macquarie. Aaron Lee to move at

just to events. on Question, so the wanted live ops I touch

run anything you event saw these is of types during to pipeline that helpful. there you of last learnings what think been be you the events, apply just can would of takeaways can I you of engagement, about that in events And any have share you there the planned? have As more or terms

to of engine a highlight opportunity of on part UGC and unique these we're I Roblox is ops live platform. want a real the that events

XX it events adding more all including games, are event are classic which was the focused the is more our a event, or the the sporting of hunt now some participating on genre whom the experiences, competition genre. of whether in or and And features,

that well. do events. on those classic, to platform from years for some benefits some do with the lot drive They So have means drive back They the the other throughout that The They Roblox has of just a thing. the here's as of brought what example, played also on community reclamation. DAUs. we classic see Roblox

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great. the succession. And to That's then CFO turning

First, last can you Mike, X Best given years. what you're of succession next. how about for job do the and luck amazing just talk the process grown over internally And looking company Dave, or forward years? start has the what to much in the candidate seeing you you looking as over the externally.

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commentary, some North think, during which, the about COVID. I the strongest, there's think, pointed as shareholder I in is out, So the letter American growth, you user

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that longer-term at view And points margin Day. better basis for Investor of on then talked initially the at over ahead I all business. had bit change is your going expected? what year, maybe even now you you margin than year the XXX little XXX now the And that to expansion a does guess XXX this on so about potential it guide the the margin, point now of full basis I think implies guidance

Yes.

discovery, that health search ops that headroom really more quality, of focus both on America is highlighting hours think for heavy to on a what X Roblox believe bookings months in live focus and performance, with our bringing I with and our tuning become a growth, is One everyday used more DAUs, an headroom X there's heavy is, we North product. more ago amazing and and the validation optimizing spontaneously, as There's said forward, more economy. of ecosystem Roblox and we ways.

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just X.X% shopping, addition, X lens have X education in that. we said, daily in there's future, the bookings headroom communication. of entertainment, arguably and billion onto that, in where As I lot actives, is market social in And to the in the of in a gaming to get of

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in as And so what's that's out pointed the guidance you intelligently. yes, reflected

things of platform, safety. way that bring to for X in we engineer that to with I review our on we've of focused as is and had rolled to consistent foundation -- voice And safety a moderate voice and bunch close that said all Mike just our of stability want example. out a

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at Next America. would Bank Omar be of Dessouky

I particularly was on Arthur top freshness. the curious for I more been changes? making stillness, discovery, guess getting content longer publishing responded them of top you guys on these drive is just last I'm the to like surface certain experiences. guys improvements sort have to seen just tail like and Have you help Or content have frequent more? algorithm these like Omar. more quarter, it mentioned how the think experiences updates? that saw among on you algorithm content some know like I you And is discovery some This

a on I And I guidance, could. follow-up then have quick if the

content sales, today's term how maybe surface use of And the intelligent We've the I bubbling health I I'll which our sort on seen the expanding based curation. also into several sponsored base highlighted. take That's touch would content Yes. cohorts on up PICs, content. tiles. increased use with the that really algorithm, would the we've highlighted of ecosystem is diversity -- of that's as well. but our I nonoptimal advantage the word creators we

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was the last of quarter highest growth it a, the year. year Arthur,

just b, launched. comparing out, And the we're was So highest point growth of against as when you XXXX. PlayStation it rightly

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Lampkin from BTIG. question at Next Clark comes

I or in maybe wanted initiatives. for either what moderation around other optimization commentary areas I perhaps, I'm base content the that that's separately platform, independent of of growth creation. sort I the AI-driven back runway guess, with guess, to across curious, exist some to whether of OpEx come or

stuff -- within tools? latter guys of and Luau the Have you impact on introduction of you growth that have with onboarding the effect some point, sort platform developer seen on of that desired that and wanted

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today, joining for everyone. us. for you wrap a That's thank us Well,

your conference and you conclude today's Thank Thank for participation. you, does call. that

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