Original title: Roblox (RBLX.US) Q3 daily active users miss estimates: child-safety overhaul pains persist, stock plunges over 17% after hours
By: Zhitong Finance, Yu Yu
Cover image source | Unsplash
Zhitong Finance APP learned that Roblox's third-quarter user numbers missed analyst expectations, while questions also mounted over whether a new hit game can reverse the recent decline in user engagement driven by stricter child-safety measures. The earnings report shows the company posted revenue of $1.572 billion, up 16% year over year; net loss narrowed to $230 million, or a loss of $0.32 per share, better than the market's expected $0.42 loss; adjusted EBITDA reached $138 million, well above the $46 million recorded in the same period last year.
User metrics were the main drag. Daily active users (DAU) came in at 138 million, down 9% year over year and below the analyst estimate of 145.8 million; total user engagement time was roughly 34 billion hours, down 15% year over year. Bookings reached $1.697 billion, down 12% year over year, yet above Wall Street's expectation of $1.63 billion and the upper end of the company's own guidance.
Roblox shares plunged more than 17% in after-hours trading; as of writing, they were down 17.50% to $43.28.
The company attributed the decline to a high base in 2025—when blockbusters such as "Steal A Brainrot" and "Grow A Garden" set industry records—as well as the impact of child-safety measures. For years, Roblox faced lawsuits from multiple state attorneys general over predator issues on the platform; the company subsequently rolled out dozens of safety overhauls, including age verification, which pressured growth in the first two quarters of this year. Roblox, for its part, is betting the reforms will ultimately deliver a broader user base over the long term.
The new game "Steal An Egg," launched over the summer, once sparked market optimism. According to Freedom Capital Markets analyst Nick McKay, the game contributed half of the platform's peak concurrent users on certain days; however, he cautioned that its pull may be "overestimated," with part of the hype possibly stemming from diverted traffic from established hits like "Steal A Brainrot."
CEO David Baszucki emphasized in a shareholder letter that Q3 revenue, bookings and cash flow all beat the company's guidance, and that AI is reshaping game content creation. Roblox's distribution, economy system and safety infrastructure, he said, constitute its core competitiveness.
On guidance, the company expects Q4 bookings of $1.89 billion to $2.0 billion, down 10% to 15% year over year; Q4 adjusted EBITDA is expected to be negative $70 million to negative $10 million, with free cash flow expected at negative $190 million to negative $105 million (partly due to capex shifting from Q3 to Q4). In July, the company said AI investment would push up infrastructure costs and suspended full-year guidance. In Q3, Roblox repurchased 4.4 million shares (about $200 million), leaving roughly $2.4 billion in remaining buyback authorization.
