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Investing.com -- Roblox Corporation (NYSE:RBLX) shares tumbled more than 10% on Thursday despite the gaming platform’s third-quarter bookings that exceeded analyst expectations, driven by strong user growth and increased engagement across its platform.
The company reported bookings of $1.92 billion for the third quarter, representing a 70% year-over-year increase and handily beating the analyst consensus estimate of $1.68 billion. Roblox posted a quarterly loss of -$0.37 per share, which was better than the -$0.49 per share analysts had expected.
The strong performance was fueled by user growth, with daily active users (DAUs) increasing 70% year-over-year to 151.5 million. Hours engaged on the platform surged 91% to 39.6 billion, while monthly unique payers grew 88% to 35.8 million. Revenue for the quarter rose 48% year-over-year to $1.36 billion.
"Our third-quarter results demonstrate the tremendous progress we’ve made toward our goal of capturing 10% of the global gaming market," said David Baszucki, founder and CEO of Roblox. "Our platform and creator ecosystem are healthier than ever before, driven by broad-based strength, new viral hits, and our strategic investments in creator economics."
Roblox raised its full-year 2025 bookings guidance to $6.57-6.62 billion, significantly higher than its previous guidance of $5.87-5.97 billion and above the analyst consensus of $6.16 billion. For the fourth quarter, the company expects bookings between $2.00-2.05 billion, representing year-over-year growth of 47-51%.
The company highlighted the success of viral experiences like "Steal a Brainrot," which recently reached a record of over 25 million concurrent players. Engagement in experiences outside the top 10 grew 58% year-over-year, demonstrating the platform’s broadening content diversity.
Roblox also reported strong cash generation, with operating cash flow increasing 121% year-over-year to $546.2 million and free cash flow rising 103% to $442.6 million in the third quarter.
Wolfe Research analyst Shweta Khajuria told investors following the report that "strength was driven by very healthy engagement levels and ramp up in new content."
"We upgraded RBLX on August 22nd and we remain constructive on Roblox’s long-term growth profile given the trends we are seeing now, investments the company is making, and the size of the opportunity," added Khajuria.