Shares of online gaming platform Roblox (RBLX) gained about 20% after the company reported a narrower-than-expected Q3 loss and raised its full-year outlook. Further, the company’s net bookings climbed 34% year-over-year to $1.13 billion in Q3.
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Overall, Roblox delivered a loss of $0.37 per share in the third quarter, compared to a loss of $0.45 per share in the same period last year. This loss compared favorably with the consensus estimates of a loss of $0.39 per share. Meanwhile, the company’s Q3 revenues of $919 million rose 29% year-over-year but fell short of Street’s estimates of $1.02 billion.
Roblox Reports Impressive User Metrics
RBLX’s average daily active users (DAUs) base grew 26.6% year-over-year to 88.9 million in Q3, driven by the launch of Roblox on PlayStation this year. Importantly, it marked the largest quarterly jump since the pandemic.
It’s important to highlight that robust performance in the combined United States and Canada region was a major growth driver for Roblox, representing 63% of total revenues. This area saw a 25% year-over-year increase in daily active users (DAUs) and a 27% rise in revenues.
RBLX Provides a Strong Q4 and FY24 Outlook
RBLX is optimistic about bookings growth for the fourth quarter and the full year of 2024, thanks to strong user engagement. For Q4, the company expects bookings to be between $1.34 billion and $1.36 billion, above the consensus estimates of $1.02 billion. Also, for 2024, RBLX has raised its bookings outlook to a range of $4.34 billion to $4.37 billion, up from the previous range of $4.18 billion to $4.23 billion. This updated guidance also exceeds the consensus estimate of $4.23 billion.
For FY24, the company has projected revenues in the range of $3.55 billion to $3.57 billion, up from $3.49 billion and $3.54 billion. It now anticipates a full-year net loss between $1 billion and $1.02 billion, an improvement from its prior guidance of $1.05 billion to $1.09 billion.
Is RBLX a Good Stock to Buy?
Turning to Wall Street, RBLX has a Moderate Buy consensus rating based on 14 Buys, seven Holds, and one Sell assigned in the last three months. At $46.80, the average Roblox price target implies a 9.51% downside potential. Shares of the company have gained about 13.12% year-to-date.
