Shares of virtual sandbox-game publisher
slumped Wednesday after the company disclosed its first monthly financial report card for May that is separate from quarterly results. Roblox’s average sales per daily active user fell in May from April.
Roblox (ticker: RBLX) stock retreated 7.2% to $83.35 during afternoon trading Wednesday.
The videogame company said late Tuesday its daily active user count fell 1% to 43 million compared with April, though that sequential decline still resulted in daily active user growth of 28% from a year ago. The company’s average bookings per daily user—a measure of how much money Roblox generates from each user—dropped 10% to roughly $5.06 from May. Bookings also fell about 2.5% from the year-ago period.
May revenue more than doubled to an estimated $149 million-$151 million, while bookings grew about 25% to approximately $216 million-$219 million, Roblox disclosed.
Bookings are a common non-GAAP measure used by videogame businesses that includes the impact of deferred revenue. When Roblox listed stock earlier this year, there was a dispute with the U.S. Securities and Exchange Commission on how the company recognized revenue from digital goods sold on its platform.
For J.P. Morgan analyst
the monthly decline in bookings is likely a result of Covid-19 pandemic restrictions on people’s activities being lifted. According to Quadrani’s calculations, the April and May data suggest the company will report second-quarter bookings of $679 million. The consensus forecast is bookings of $692.8 million.
Quadrani wrote in a note that declines related to reopening was expected by investors, and her team’s financial model already has adjustments built in for events such as schools opening more fully in the fall.
When Roblox reported its first-quarter results in May, it said it was still seeing a significant engagement boost, even as some schools returned to in-person learning, and vaccines began to roll out. The results suggested that new player engagement and spending because of lockdown conditions could remain, even post-pandemic. But Quadrani said the May figures appear to negate that view.
“Our long-term view on Roblox remains positive, and we don’t expect bullishinvestors to be dissuaded by today’s release, as again some softening wasexpected,” Quadrani wrote.
Quadrani rates Roblox stock at Overweight, with a target price of $88.
Shares have surged more than 80% from the reference price since Roblox listed earlier this year.
Write to Max A. Cherney at firstname.lastname@example.org