TLDR
- Roblox reported Q4 bookings of $2.2 billion, up 63% year-over-year and beating the $2.09 billion estimate
- Daily active users climbed 69% to 144 million while engagement hours jumped 88% to 35.2 billion
- Free cash flow hit $307 million, more than double the $136 million Wall Street forecast
- Q1 2026 bookings guidance of $1.69-$1.74 billion exceeds analyst expectations of $1.68 billion
- Age verification rollout revealed 73% of users are under 18, creating temporary growth headwinds
Roblox shares rocketed 22% to $74 in after-hours trading Thursday following a blowout fourth-quarter earnings report. The gaming platform destroyed Wall Street expectations across every key metric.
Q4 bookings reached $2.2 billion, up 63% from last year. Analysts had projected $2.09 billion.
Daily active users grew 69% to 144 million. The Street expected 138 million users.
Hours engaged on the platform surged 88% to 35.2 billion. Analysts forecast 32.4 billion hours.
The U.S. and Canada generated $1.2 billion in bookings with 24 million daily users. The region contributed 6.3 billion hours engaged.
Revenue climbed 43% to $1.42 billion. The company posted a net loss of $318 million, slightly better than the $323 million loss analysts expected.
Cash Flow Crushes Expectations
Free cash flow came in at $307 million for Q4. That number crushed the $136 million analyst estimate by more than 125%.
For full-year 2025, bookings jumped 55% to $6.8 billion, topping the $6.6 billion estimate. Revenue rose 36% to $4.9 billion.
CEO David Baszucki highlighted creator earnings. The top 1,000 creators averaged $1.3 million in 2025.
The company set ambitious long-term targets. Management aims to connect one billion users and capture 10% of the global gaming market.
Strong Guidance Tops Estimates
First-quarter 2026 bookings are projected between $1.69 billion and $1.74 billion. That represents 40% to 44% growth and beats the $1.68 billion consensus.
Q1 free cash flow is expected between $560 million and $584 million, up 31% to 37%. Analysts had forecast $348 million.
Full-year 2026 bookings guidance came in at $8.28 billion to $8.55 billion. That tops the $8.03 billion Wall Street estimate.
Free cash flow for the year is projected between $1.6 billion and $1.8 billion versus the $1.5 billion consensus.
Age Verification Rollout Complete
Roblox finished its global mandatory age verification rollout in January. The process began late in Q4 in Australia, New Zealand and the Netherlands.
The verification revealed 73% of daily users are under 18. That breaks down to 38% between ages 13-17 and 35% under age 13.
Management said age verification created a mid-single-digit headwind to engagement growth. It also caused a low-single-digit headwind to bookings growth.
The company views accurate age data as a long-term opportunity. It plans to tailor features and content to increase safety and drive engagement.
In initial markets, 60% of daily users completed age verification. Globally, 45% of daily users had verified their age by the end of Q4.
Roblox announced it will discontinue annual guidance starting in 2027. The company will focus on quarterly forecasts moving forward.
The stock is down 25.3% year-to-date and 9.8% over the past 12 months.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
