Roblox Q2 2025 Earnings Report

Roblox EPS Results

• Actual EPS: -$0.41
• Consensus EPS: -$0.37
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: -$0.32

Roblox Revenue Results

• Actual Revenue: $1.44 billion
• Expected Revenue: $1.20 billion
• Beat/Miss: Beat by +$235.69 million
• YoY Revenue Growth: +50.50%

Roblox Announcement Details

• Quarter: Q2 2025
• Date: 7/31/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 31, 2025
• Conference Call Time: 8:30AM ET

Roblox (NYSE:RBLX) develops and operates an online entertainment platform in the United States and internationally. It offers Roblox Studio, a free toolset that allows developers and creators to build, publish, and operate 3D experiences, and other content; Roblox Client, an application that allows users to explore 3D experience; and Roblox Cloud, which provides services and infrastructure that power the platform. Roblox Corporation was incorporated in 2004 and is headquartered in San Mateo, California.

Roblox Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Q2 revenue rose 21% YoY to $1.1 billion, bookings climbed 51% to $1.4 billion, DAUs grew 41% to 111.8 million, and engaged hours jumped 58% to 27.4 billion.
• Positive Sentiment: Developer payouts (DevEx) hit an all-time high of $316.4 million, up 52% YoY, reflecting strong creator earnings across the platform.
• Positive Sentiment: Raised full-year 2025 guidance to 22–25% revenue growth and 34–37% bookings growth, citing sustained momentum and recent viral content success.
• Positive Sentiment: Global traction remained broad-based with APAC bookings up 75% and DAUs up 76%, led by Japan, India, Korea and Indonesia all seeing triple-digit YoY growth.
• Negative Sentiment: Management cautioned on Q3–Q4, assuming normalization of recent viral hits and tougher year-ago comps, creating heightened forecast uncertainty for late-year bookings.

Presentation

[Operator]

Good morning. My name is Rebecca, and I will be your conference operator today. At this time, I would like to welcome everyone to the Roblox Q2 twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

[Operator]

Thank you. I will now turn the call over to Stephanie Notoni. May now begin your conference.

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

Thank you, Rebecca. Good morning, everyone. Thank you for joining our Q and A session to discuss Roblox's Q2 twenty twenty five results. With me today is Roblox Co Founder and CEO, David Vazisin and our Chief Financial Officer, Naveen Jopraf. Our shareholder letter, press release, SEC filings, supplemental slides and a replay of today's call can be found on our Investor Relations website.

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

Our commentary today may include forward looking statements, which are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those described in our forward looking statements. A description of these risks, uncertainties and assumptions are included in our SEC filings, including our most recent reports on Form 10 ks and Form 10 Q. You should not rely on our forward looking statements as predictions of future events. We disclaim any obligation to update these statements except as required by law. During this call, we will also discuss certain non GAAP financial measures.

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

Reconciliations between GAAP and non GAAP metrics can be found in our press release and supplemental slides. With that, I'll turn the call over to Dave.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Thank you, and good morning, everyone, and thank you for joining us today. I'm sitting here side by side with our new CFO. Welcome, It's great to have you here. And, I would like to just, do a shout out and thank you to Mike Guthrie for such an incredible tenure at Roblox. We wish you all the best.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Naveen, we're really excited for you to be in the seat here, and I think everyone's gonna see how quickly, why we picked you. So welcome. So let's get started. We, eighteen months ago, we shared with everyone a focus on perf and quality discovery economy and live ops and shared the notion of creating the conditions for growth powered by our creator community. Fast forward today and our community has produced solid growth in q two, several viral viral hits, great velocity on new content.

[David Baszucki, Founder, CEO, President & Director at Roblox]

And metaphorically, just as we created really the conditions for growth, grow a garden also very similar metaphorically in creating conditions for growth has set all time records. And it's an elegant metaphor just as we have. And we're gonna continue on this focus of targeting 10% of the global gaming content market on the platform with some great results we'd like to share with you. In Q2 twenty twenty five, we had revenue of $1,100,000,000 This was up 21% year on year. Our Q2 bookings were $1,400,000,000 up 51% year on year.

[David Baszucki, Founder, CEO, President & Director at Roblox]

And bookings growth was strong across all regions. U. S. And Canada saw bookings growth of 43%. APAC grew 75% driven by strength in strategic markets across the region.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Here's some notable callouts on year on year Q2 bookings growth. Japan over 50%, India over 90%, Philippines approximately 100%, Korea over 120%, Indonesia over 150% year on year. Our Q2 DAUs were 111,800,000 up 41% year on year. Once again growth across all regions, U. S.

[David Baszucki, Founder, CEO, President & Director at Roblox]

And Canada DAUs grew 21%, APAC grew 76% and on the age demographics over 13 DAUs grew 54% year on year. Over 64% of our DAUs total are now over 13. On hours engaged in Q2, we had 27,400,000,000 hours, up 58% year on year. Similar trends to DAUs, USA and Canada grew 35% APAC 95%. Some callouts Japan hourly year on year quarter growth 61% year on year Indonesia 170% year on year strong growth over 13% with 72% year on year and over 66% of total hours are in users 13 or over 13.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Monthly unique payers in Q2 were 23,400,000, up 42%. This is a new all time record. We also had a record number of new monthly unique payers of 4,600,000. At the same time, this drove higher average bookings per monthly unique payer up 6%. In Q2, DevEx was $316,400,000 This was up 52% year on year, a new all time record, nearly double the amount of DevEx from the same period two years ago.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Our strength in q two was broad based across the platform, but we do want to share the breadth of new viral hits that have showed up on the platform. Into July, we currently have five experiences with over 10,000,000 daily active users including hits such as Grow A Garden, Steal A Brain Rot, Brookhaven, ninety nine Nights, In The Forest and Ink game. Four out of five of these experiences have been launched in the last twelve months. As a result of this, we raised our fiscal year 2025 guidance. You'll hear more about that from Naveen as we progress to our goal of capturing 10% of the global gaming content market on our platform.

[David Baszucki, Founder, CEO, President & Director at Roblox]

The really the scale and the speed of the creator success on our platform isn't an accident. We've been creating these conditions for viral content. And once again, let's reiterate the investments we're making in platform performance, discovery, our economy, among other things. We now have a large audience, over a 111,000,000 DAUs of all ages, genders, and geographies. This audience is growing faster than the industry as a whole.

[David Baszucki, Founder, CEO, President & Director at Roblox]

We've put enormous emphasis on our global infrastructure and network, both its scalability, its reliability, its performance, and our ability to run this global infrastructure efficiently. We continue to work on personalization and discovery, making them more transparent, and really making them better at connecting new content with our individual users and promoting long term ecosystem health. Wanna highlight in search and discovery, we focus on long term health, not short term health, in how we connect people on our platform with content. And finally, our economy, which we're really building to help creators thrive and earn. For example, in the last twelve months, 18 creators earned over 10,000,000 on the platform.

[David Baszucki, Founder, CEO, President & Director at Roblox]

There's a lot of momentum in new content in our ecosystem for really up and down the size of creators. I wanna highlight a couple of the viral hits that we believe are having positive effects through the rest of the ecosystem. For example, in Q2 twenty twenty five more than 75% of Growa Gardens DAUs engaged with at least one other additional experience on the same day they played. And this highlights a healthy interconnected nature of our platform. We've seen that even when excluding the big success of Grow A Garden, our inexperienced spending across the platform grew 36% year over year and it highlights the really depth and robustness of the content on the platform.

[David Baszucki, Founder, CEO, President & Director at Roblox]

I want to highlight some momentum we've been building for the future. In September, we're going to be hosting our RDC annual developer conference and we'll be showcasing a wide range of technology and innovation that we believe will enable us to build on this momentum. I want to highlight a few of the innovations we mentioned in our letter. On our safety platform, we continue to innovate and set the standard of what we believe is the future of safety for people of all ages on platforms. Including in July, we introduced trusted connections and age estimation on the platform.

[David Baszucki, Founder, CEO, President & Director at Roblox]

We expanded privacy tools, and screen time management, And we introduced RogueGuard one point o, an open source safety toolkit to help put guardrails around large language models as we make these available within live experiences on Roblox. Our vision really from day one has been to be the leader in online safety and more to come here. Expect us to keep innovating in this space. Our IP license manager and catalog was launched in July. We have partners including Lionsgate, Netflix, Sega and Kadansha.

[David Baszucki, Founder, CEO, President & Director at Roblox]

This is this is really a market connecting creators on the platform with great IP holders and really systematizing the licensing and the connection of this. We think this is the future of how our large creator platform connect with can connect with great IP. On our brand and ads, group, we've integrated our rewarded video, with Google efforts, and we're in beta now. We're seeing strong interest. And we just expanded the eligibility of who can access this beta.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Some really cool activations, that we've seen on the platform, Grow a Garden integrated and was live last weekend with Travis. And Travis Kelce participated with the creator in a QA live within the game on Saturday morning. FIFA partnered with one of our most popular soccer games, Super League Soccer, and Google just wrapped another campaign. It's the third activation in under a year with Google Play being really, the most recent with more to come. We just, released the next inner yeah, iteration of our cube three d generational foundational model.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Once again, highlighting Cube three d is live now within live Roblox experiences. We've made significant improvements in accelerating the inference for our three d generation. We've had over a million three d models generated not just in studio, but within games themselves highlighting really providing this infrastructure for what we believe will be a future aspect of game games, which is really AI on demand, whether it's three d generation or text generation. On our genre expansion efforts, we've had early traction in some of the target genres we've shared with you, RPG, sports and racing and battle shooter games. And we expect, robust spending in these target genres.

[David Baszucki, Founder, CEO, President & Director at Roblox]

It actually grew 66%, from q two twenty four to q two twenty five. We'll continue a focus on these key genres, and we'll discuss more about the technology and the road map to make progress here. One final thing, in our press release, we shared that Manuel Bronstein has decided to move on from Roblox. I just wanna share that Manuel's been at Roblox for more than four years, and he's been a key part of our growth and maturation. He's helped us build incredible teams across product and partnerships.

[David Baszucki, Founder, CEO, President & Director at Roblox]

He plans to take a break before pursuing personal and entrepreneurial activities, but he'll stay with us through the September. And on behalf of everyone at Roblox, Manuel, we wanna thank you for your lasting contribution. With that, I'm gonna turn it over to Naveen.

[Naveen Chopra, CFO at Paramount Global]

Thank you, Dave. It's awesome to be here. I also wanna echo your thanks to Mike who has spent a lot of time helping me get up to speed, and I'm very grateful for the world class team that he has built. And I'm very much looking forward to working with with everyone here at Roblox. Before we take questions, I thought I would just share some quick thoughts on what attracted me to Roblox and then add some color both on the Q2 results and on our guidance for the balance of the year.

[Naveen Chopra, CFO at Paramount Global]

Look, I came to Roblox not just because of the amazing business that exists today, but really because of where I think it can go in the future. Today, I think as most of you know, Roblox is a highly scaled consumer platform with massive engagement and what I think of as an enviable financial model. And we're talking 110,000,000 DAUs with engagement and bookings that have grown at strong double digit growth rates over the past two years. Over that same period of time, the business has generated almost $1,400,000,000 of free cash flow and now has a balance sheet with close to $4,000,000,000 of net liquidity. And I particularly love the fact that it's a team that embraces a long term orientation and intentionally chooses to tackle really hard problems.

[Naveen Chopra, CFO at Paramount Global]

Now looking forward, I believe that Roblox can use those assets to capitalize on multiple tailwinds. And that includes tailwinds from inertia in the UGC creator economy, which pervades social, video and now gaming tailwinds from AI, which accelerate which will accelerate Roblox platform development, reduce friction for our creators and enhance our economy tailwind from what I describe as market headroom. Despite tremendous growth to date, we're really just scratching the surface of a very large and lucrative gaming market. And tailwinds from financial scale. There is opportunity for incremental operating leverage and cash flow generation.

[Naveen Chopra, CFO at Paramount Global]

And as that expands, the company will have the ability to pursue multiple paths to growth and shareholder value creation. So now let's touch on our reported results and our guidance, first, with respect to Q2. And the main thing I want to emphasize above and beyond what Dave has noted and what you read in our letter is the performance of non top 10 experiences, I. E, the robot platform at large. So let me share some stats on that.

[Naveen Chopra, CFO at Paramount Global]

First, engagement. For experiences ranked number 11 and below, growth of inexperienced hours was 47% year on year. And that engagement is also powering broad based spending growth. In fact, more than half the growth in experience spend came from non top 10 titles. And that in turn translates to significant earnings for creators of all sizes.

[Naveen Chopra, CFO at Paramount Global]

Over the last twelve months, our top 1,000 creators averaged nearly $1,000,000 in Roblox earnings, and the top 10,000 creators averaged more than $110,000 Now I note all this because I think it's really important to understand that our growth is a function of both viral hits and broader ecosystem growth. All right. So let's look at the rest of the year. As you've hopefully read, we have significantly raised our full year 2025 revenue and bookings guidance. Revenue guidance is now 22% to 25% year on year and our bookings guidance calls for year over year growth of 34% to 37%.

[Naveen Chopra, CFO at Paramount Global]

At the high end, that's a bookings increase of $610,000,000 or more than 11% to our prior annual guidance, most of which is still to be delivered in the second half of the year. In terms of how this flows to individual quarters, I want to note a couple of things. First, although momentum has continued in July, for guidance purposes, we conservatively assume that engagement and spending in recent viral hits will move toward underlying growth trends during Q3. Second, we note the fact that year over year growth rates will face tougher comps in August and September as prior viral hits were at their peak during those months in 2024. And then if you look at Q4, we believe that some additional conservatism is warranted.

[Naveen Chopra, CFO at Paramount Global]

To be clear, everything we're seeing is positive and healthy, but it's just too early to extrapolate Q2's extraordinary trends over a prolonged period of time. Additionally, our Q4 forecast does have some heightened uncertainty given the significant portion of Q4 bookings that we typically capture in the final days and weeks of the period. But zooming out, what we're seeing in 2025, I. E. 34% to 37% full year bookings growth, makes us more confident than ever that Roblox is positioned to capture 10% of the $180,000,000,000 global gaming content market.

[Naveen Chopra, CFO at Paramount Global]

And I am incredibly excited to be on this journey as we build one of the great global consumer Internet platforms. With that, let's open up the call for questions.

[Operator]

Thank you. And your first question comes from the line of Jason Bazinet with Citi.

[Jason Bazinet, Director at Citigroup]

Thanks. I just had one quick question. I I would appreciate it maybe if you could just give us a little color about, how how much capacity the system has to sort of absorb this surge in demand that we've seen? Because I know you guys are very focused on the long term. And a couple of years back, I think you sort of increased your CapEx to increase the capacity and resiliency of the platform.

[Jason Bazinet, Director at Citigroup]

Can you just give a little bit of color on how you're thinking about sort of the CapEx and the platform itself?

[David Baszucki, Founder, CEO, President & Director at Roblox]

Hey. Great question. I want to highlight we are pushing numbers above 30,000,000 concurrent players at the same time. And GrowGarden in the past few weeks has gone over 20,000,000 concurrents. Prior to that, I believe in the Guinness Book of World Records, the peak concurrent of any game was in the 14,000,000 to 15,000,000.

[David Baszucki, Founder, CEO, President & Director at Roblox]

So we're pushing some really big numbers. Behind the scenes, the optimal mix for spending is both our bare metal infrastructure with burst mode into cloud providers. And what you're seeing now behind the scenes is somewhat of a really great mix where for four to eight hours, we spin up a bunch of cloud servers and mix it with the constant bare metal of our own infrastructure. So that's worked really well and allowed us to absorb this without paying the CapEx seven days a week twenty four seven to handle that type of a load.

[Jason Bazinet, Director at Citigroup]

That's super helpful. Thank you.

[Operator]

Next, we'll move to Clark Lampin with BTIG.

[Clark Lampen, Managing Director at BTIG]

Thanks for taking the questions. Before I start, congrats on what are objectively some very impressive results. I think maybe, Dave, if we take a step back from, the print and we think about the ecosystem implications here, it's hard for me to imagine that, I guess, professional developers aren't taking note of the changes to the platform, the earnings opportunity, and with more of that being spread to non top 10 developers, as Naveen noted. You know, you're also reducing friction with onboarding and creation. How does this, I guess, recognizing that you don't have a great deal of visibility beyond the next sort of two quarters, how does this maybe not translate to a faster run rate of growth for Roblox in sort of 2026 and and beyond.

[Clark Lampen, Managing Director at BTIG]

I think we've seen the proof points for how, developer investment and and sort of the the discovery engine translates to bookings growth. So I'm wondering, I guess, where there could be sort of incremental friction here.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Yeah. Yeah. I wanna highlight we're we're on the track, that we started really annotating six quarters ago, which is raw per scale tech, discovery, economy, live ops. We we still believe we have a lot of technology in the pipeline to fully realize our vision of what it's gonna take. And there is still a range of experiences that we think we're gonna accelerate on top of that.

[David Baszucki, Founder, CEO, President & Director at Roblox]

So we're not we're not really done with the tech. The vision on Roblox is ultimately to support a single build from a creator that runs in any language on any device and scales all the way from a low end two gigabyte Android phone, maybe in a difficult networking environment, all the way to an experience that looks great on a gaming PC and starts to go higher in res, maybe with avatars that are avatars that don't look like Roblox avatars and look like a wide range of that. So we're not quite there yet. So I we do wanna focus on that technology. We think over time that's going to accelerate the genre expansion that we're talking about.

[David Baszucki, Founder, CEO, President & Director at Roblox]

We are, our economy keeps getting better with more optimization, you know, pricing and regionalized dynamic pricing more developers are adopting that. So we're going to see improvements there. There's still I I think there's still a lot of tech in the hopper really to help drive this.

[Clark Lampen, Managing Director at BTIG]

Thank you.

[Operator]

We'll move next to Benjamin Black with Deutsche Bank.

[Benjamin Black, Co-Head Internet Equity Research at Deutsche Bank]

Great. Thanks for taking my question. May I follow-up with Park, you know, just honing in on the developer side of the equations are, you know, our experiences like Grow a Garden serving as a sort of a promotional launch pad for newer prospective developers. So maybe you could give us an update on, you know, developer growth and and what you're hearing, from the community. And then, I just wanna look past World Garden a little bit and hone in on the other experiences that are gaining real traction.

[Benjamin Black, Co-Head Internet Equity Research at Deutsche Bank]

You know, could could you maybe talk about why you're seeing such a high rotation in the top 10 experiences in search and discovery? Is it sort of the halo effect from go garden? Is it something else? May may maybe talk about, you know, the durability of some of those dynamics. Thank you.

[David Baszucki, Founder, CEO, President & Director at Roblox]

I I do feel the word is out in that most creators in the gaming space when one experience goes over 20,000,000 concurrence, they take note of that. So I I do think the word is out. I wanna highlight GrowGarden shows that when the conditions are right for growth, metaphorically GrowGarden is that we we see interesting things. And in this case GrowGarden is somewhat unique and that they recognized asynchronous play and having things happen when you're not necessarily playing, like a garden keeps growing contributed to that. I think there's a lot of opportunity for new types of experiences on the platform as we make AI available, both three d generation and text generation in a safe way within games.

[David Baszucki, Founder, CEO, President & Director at Roblox]

So stay tuned on that. On the other experiences, you know, on the platform, we're seeing continued really interesting stuff. Once again, five experiences with more than 10,000,000 DAU. But what Naveen shared, that I think is really interesting is is the growth all the way down to a thousand and the the breadth of what we have coming in the pipeline. We we think there's a lot of headroom as we look at genres, that we think should someday be really bigger on the platform sports, racing, battle, RPG.

[David Baszucki, Founder, CEO, President & Director at Roblox]

And so part of our whole road map is making sure the technology, search and discovery, and economy are there for those genres. The other thing I'll I'll note is without giving any forward predictions, we wanna move as much money as we can from the top line to the creator community. And we wanna get to the point where it's more and more clear, it's more efficient to build an experience on Roblox both from developer time as well as search and discovery as well as monetization relative to the the stack that creators use in the existing gaming space.

[Benjamin Black, Co-Head Internet Equity Research at Deutsche Bank]

Great. Thank you very much.

[Operator]

Your next question comes from the line of Cory Carpenter with JPMorgan.

[Cory Carpenter, Internet Equity Research at JP Morgan]

Hey, good morning. Thanks for the question. Dave, I have two for you. Understanding you've been working on a number of initiatives over the past eighteen months, but what do you attribute all these viral hits happening in a really compact short time frame too? And then, on on geographies, APAC, really, really strong growth

[Cory Carpenter, Internet Equity Research at JP Morgan]

Just you called out a couple countries, but hoping you could expand a bit on what's really resonating in that market. Thank you.

[David Baszucki, Founder, CEO, President & Director at Roblox]

It's interesting. Right? For for the history of the company, we constantly try to attribute growth and acceleration to one or two big things. And we whenever we do this attribution exercise, we come back to the notion that we're we're really doing hundreds of things at the same time. We we have a very broad stack.

[David Baszucki, Founder, CEO, President & Director at Roblox]

It goes from three d engine to creator tooling to search and discovery to apps on all devices to auto translation and up and up. And we're really trying to innovate and execute on all of these. When we look at, the viral hits that are here today, we believe it's all of those com really contributions working together rather than one big thing, and they they all play a role. Right? These Grow a Garden was picked up by our discovery algorithm.

[David Baszucki, Founder, CEO, President & Director at Roblox]

It arguably scaled based on the quality of our infrastructure. Our studio tooling helped Jandel build it quickly rather than over years. It was built in months. So all of these things really contribute. I think on APAC, we've had a huge focus on increasing the quality of our auto translation.

[David Baszucki, Founder, CEO, President & Director at Roblox]

We've had a huge focus in APAC on performance. We've added server capacity in Singapore and in other places. And over the last year, the really the performance of our infrastructure in APAC has gotten better and has scaled with that. In Japan, especially, we had a bit of an unlock as we got to ultimately product quality on translation that I think supports the growth in that region. So even in APAC, my belief would be it's a it's really a bunch of things working together.

[Cory Carpenter, Internet Equity Research at JP Morgan]

Thank you.

[Operator]

Moving next to Eric Sheridan with Goldman Sachs.

[Eric Sheridan, Managing Director at Goldman Sachs]

Thanks so much for taking the question and appreciate all the color. When you think about longer term monetization of the platform and maybe for a mixture of Dave and Naveen, how do you think about the building blocks when you move from sort of product by product to more of this platform approach and you're building this developer ecosystem of how you're thinking about the building blocks for commerce as opposed to advertising and maybe the longer term for subscription aspects to the business model? And how should we think about mix of monetization evolving as the platform does? Thanks so much.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Yeah. I'll go first and then Naveen if you want to chime in. We we really are building an ecosystem and a platform here, and we see a market where individual creators have a a range of monetization vehicles to choose from and optimize for their own experiences. As we roll out, rewarded video ads, we believe some developers will focus very heavily on those, whereas some creators will stay with a virtual economy type model. So we really wanna have the best range of tools, both freemium, virtual currency, paid access gaming, ad supported, and have an ecosystem where creators can do a pickup on that.

[David Baszucki, Founder, CEO, President & Director at Roblox]

And that ultimately includes physical shopping as well where I believe some of our creators are making most of their money now by selling physical items. So, the the thought is the more we can drive, genre expansion, raw engagement growth in more and more domains, DAU growth, and our growth. If we have the right economic system, it's gonna pull through. I will highlight there are certain genres out there amongst older users that naturally monetize much much high more highly than Roblox does. And so the expectation could be that as we start to see content in those genres amongst older users with a market supporting that, we we may and should see higher monetization within some of those.

[Naveen Chopra, CFO at Paramount Global]

Yeah. The only thing I would add to that is, you know, to remind everyone of how the flywheel nature of this, which is to say that I I think all of those models for monetization are enhanced by continuing to drive user growth and engagement growth in the short term. And so all the things that you've heard us talk about today in terms of things that have been built over the last few years, that is the priority, and you can see what it is unlocking in terms of engagement, user growth, and monetization with our current business model. And I really think that as that continues to accelerate, it's going to make it easier for both the platform and our creators to experiment with other types of monetization.

[Eric Sheridan, Managing Director at Goldman Sachs]

Okay. Thank you.

[Operator]

We'll move next to Ken Galrowski with Wells Fargo.

[Ken Gawrelski, MD & Senior Internet Analyst at Wells Fargo]

Thank you very much. And Naveen, nice to be back in contact again. Congrats on the new role. Look forward to work with you. Maybe we'll just follow-up on Eric's question here and maybe a little finer tuned.

[Ken Gawrelski, MD & Senior Internet Analyst at Wells Fargo]

Could you talk about where you are with the Google partnership on the advertising side, the implementation timeline, and how we should think about the opportunities for kind of ad monetization, and maybe where that is on priorities. You've actually had just had a tremendous period of growth on the platform. But in terms of prioritization of that opportunity and the rollout, how should we think about that throughout the rest of this year and to next year? And then within that are you how much are you thinking about being bringing other sources of third party demand on the ad side? Thank you.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Yeah. I'll highlight and I'll I'll we'll wanna check on it, but we did open the window of which creators can now offer rewarded video. We have been very fastidious in watching the performance of that product on both iOS and Android, making sure even on low memory devices that we offer the the performance and scale that we're used to. And we've been in, you know, doing that relentlessly and we're now live. We've, I've seen the, you know, the internal results of the growth rate of the pickup of rewarded videos and there is, you know, strong and continued pickup of it.

[David Baszucki, Founder, CEO, President & Director at Roblox]

We're not splitting out the size of that, but there is once again a wide range of creators who this tends to line up for. And we have a lot of creators now starting to experiment with this. I'm really excited about the opportunity to to grow that. So stay tuned. We we hope as we start to imagine being 10% of the global gaming content market running through our platform, this will naturally form a monetization component for a chunk of developers that have experiences that make sense for this.

[Naveen Chopra, CFO at Paramount Global]

And just with respect to your question on bringing in additional, partners, that is absolutely something that we envision doing as we continue to scale the business. As Dave said, we're still in relatively early days, although excited by the degree to which a lot of creators have started to integrate with Google capabilities. I think we have almost a 100 publishers now onboarded. So more to come on on that front.

[Ken Gawrelski, MD & Senior Internet Analyst at Wells Fargo]

Thank you.

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

Rebecca, are you there?

[David Baszucki, Founder, CEO, President & Director at Roblox]

If we lost our moderator, we can go to reading questions ourselves. Or

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

Okay. Let's take the next question from Matthew Cost at Morgan Stanley. You can open up the line. We apologize. We are having some audio difficulties with our operator.

[David Baszucki, Founder, CEO, President & Director at Roblox]

And assuming we're still live, if we ever any questions, we can move to Rick.

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

I think it's an audio problem with our

[David Baszucki, Founder, CEO, President & Director at Roblox]

So we can start pulling questions off the stack.

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

Yes. We're trying to unmute Matthew Cross.

[Matthew Cost, Executive Director - Equity Research at Morgan Stanley]

Can you guys hear me?

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

Matthew? Yes. Thank you.

[Matthew Cost, Executive Director - Equity Research at Morgan Stanley]

Okay. Great. Awesome.

[Matthew Cost, Executive Director - Equity Research at Morgan Stanley]

So maybe just on the creator rewards program that that you talked about in the shareholder letter, how does that change incentives for creators versus the old engagement based payouts? And and should that drive any near term meaningful uptick in in the amount of dev x that you're paying out? That's first question. The second one is just on discovery. Obviously, that's been such a huge part of of driving, you know, deeper engagement and spending across the content portfolio.

[Matthew Cost, Executive Director - Equity Research at Morgan Stanley]

At what point do you make a more aggressive push into sponsored tiles? Because that that really seems like an obvious, you know, commercial opportunity within that discovery engine. So I guess what what inning are you in with that, and and when do you push more on that front? Thank you.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Eight, great perceptive questions. Let's start with creator rewards. You know, we're a we're a systems company. We support a a complex set of incentives for creators. And as you correctly mentioned, with creator rewards, we wanna fully optimize the alignment of those incentives with behavior that we think makes sense for the long term health of the platform.

[David Baszucki, Founder, CEO, President & Director at Roblox]

This is a bit of a move from engagement based payouts that pay for raw time. And certain in certain cases, for raw time can create incentives that maybe aren't optimal. Whereas with our new creator rewards system, we really wanna make it good for creators who drive organic traffic to the platform. And, in the traditional gaming space, sometimes people drive traffic to their own web destination. We wanna reward them for driving traffic and bringing viral new users to our platform.

[David Baszucki, Founder, CEO, President & Director at Roblox]

So we think that is in alignment with what drives long term health to the platform, and we think it makes it really make more sense for a creator to do a social campaign or or drive viral traffic to the platform. On the discovery side, I do wanna highlight we we have adopted the notion that with discovery, we wanna drive long term health of the platform both for users, for creators, and the overall ecosystem. And that means being very thoughtful about what we reward for discovery. We're getting more and more transparent with what the things are that we reward for creators. They appreciate that.

[David Baszucki, Founder, CEO, President & Director at Roblox]

They can see in their own analytics dashboard the things that we're rewarding for discovery. And you are spot on that over time as we get better targeting with sponsored tiles, it's a very economical way for creators to bring more traffic to the to their game. It's also a great way for creators to launch an experience by buying traffic on Roblox rather than going somewhere else, really. So we do think long term there's a big future for sponsored tiles, so stay tuned on that. We're we're really focusing on making the optimization and the targeting of that better.

[Naveen Chopra, CFO at Paramount Global]

And just on the financial impact of creator rewards, I think you asked about that as well. I just would note two things. In the short term, I don't think the transition from the prior, you know, engagement based system to the framework that Dave described is really gonna have any material impact to the p and l. Obviously, we hope that over time, we are sharing significant incremental earnings with our developers through Creator Awards. But I really view that as part of our overall strategy to share more dollars with creators as we capture operating leverage in other parts of the business.

[Matthew Cost, Executive Director - Equity Research at Morgan Stanley]

Great. Thanks.

[Operator]

Your next question comes from the line of Brian Pipps with BMO Capital Markets.

[Brian Pitz, Managing Director at BMO Capital Markets]

Maybe a couple of things here. Can you talk about the new customer acquisition you saw during the quarter? How impactful was GrowGarden to that new customer acquisition? Do you believe it's sustainable? And then specifically, double clicking on GrowGarden, how sticky can that game be?

[Brian Pitz, Managing Director at BMO Capital Markets]

Can you talk about how these new players you've acquired behave relative to other players you've acquired previously? You know, what does the age demo look like? Are are you seeing, you know, some of the new content, migrating to to maybe an older age. I know you guys have been trying to age up for a while. You know, any of these, you know, viral titles reaching a generally older audience. Thanks.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Yeah. I I I would feel, you know, there would be a nuance in that that our vision is that we're creating a platform for all ages around the world, and we've been working this vision for quite a while. And I feel we're not just trying to age up. We're we're seeing it in the numbers as an increasing percentage of our users are 13, and we we continue to show solid growth amongst that. Starting even a year ago with Dress to Impress, we started to see experiences that are are really big for users 13 even if 17.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Dress to Impress last summer was being played, you know, in class in college. And I think the same thing has happened in Grow Garden in that it's a it it highlights a universal experience that's appealing to all ages. So arguably, it is it is helping pull older people onto the platform. We we have still enormous headroom over 17 on the platform, and so I I expect our creators are gonna respond to that. They can see the opportunity to build great things.

[David Baszucki, Founder, CEO, President & Director at Roblox]

And and just fun and anecdotally, it's really fun to think through that on a on a gaming platform like Roblox, the last two super viral hits, Dress to Impress, were fashion and then gardening, which are are non typical gaming genres, which shows both the creativity on the platform as well as the the really, the the ability in the future for the more traditional genres to to follow that. So GrowGarden's definitely bringing new users on the platform, and that's why we've restructured creator rewards to reward people who create experiences like this, who bring new users to the platform.

[Naveen Chopra, CFO at Paramount Global]

And just to add a couple things to to that, you know, there are, some interesting dimensions in which Grow a Garden looks a little different than the platform as a whole. You know, Dave touched on this. From an age and a user tenure perspective, we did see Grow a Garden kinda skew a little older than platform average. So, I think that's compelling audience expansion. And then in terms of the durability of the experience, I mean, it's obviously, still early days, but we see some early signals that this can be a very sustainable level of engagement for the title.

[Naveen Chopra, CFO at Paramount Global]

If you look at some of the charts we published on our homepage, you can see that it's still one of our top, if not the top retaining game on the platform. It's a game that is very social in nature and that's an ingredient that we have seen be an indicator of sustainability. Users who play with friends tend to engage at anywhere from 1.5 to two times the rate of non co play users. And the game has very successfully taken advantage of live ops including the Travis Kelce event that Dave mentioned from last weekend. So there's definitely the potential for evergreen hits.

[Naveen Chopra, CFO at Paramount Global]

I mean, we've seen some of those on the platform in the past, things like Brookhaven, Watchfruits, etcetera, but also instances of games that have peaked and then started to taper. So as I mentioned in my comments around guidance, we're sort of assuming normalization just out of I guess prudence. But we really like the ingredients that we see in Grow A Garden and its potential be a sustainable game over the long term.

[David Baszucki, Founder, CEO, President & Director at Roblox]

And complementing what Naveen said, for those of you that are game historians looking back over the last five, ten or fifteen years, there have been social asynchronous games on other platforms that, involve, things like gardening and growing things that have have sustained fairly well. So there there have been some historical patterns of, you know, fairly sticky type experiences like this.

[Brian Pitz, Managing Director at BMO Capital Markets]

Thanks for the color, Dave, and, welcome, Navin.

[Naveen Chopra, CFO at Paramount Global]

Thank you.

[Operator]

We have time for one last question from Ross Sandler with Barclays.

[Ross Sandler, MD & Senior Internet Research Analyst at Barclays Capital]

Hey, guys. Yeah. Just following up on that last question. So it isn't just that GrowGarden's breaking records in terms of size of concurrent, but also the speed by which they ascended in that first one hundred days or so. So could you talk a little bit about, algorithmic changes you've made that that made that possible in terms of that speed versus just the natural kind of social virality built into that game and and how repeatable that is across other titles.

[Ross Sandler, MD & Senior Internet Research Analyst at Barclays Capital]

And then, Naveen, following up on that that last comment, could you talk about how you're retaining or moving first time Roblox users who are coming in to play Grow a into, other experiences? Thank you.

[David Baszucki, Founder, CEO, President & Director at Roblox]

Well, the the discovery that occurred with GrowGarden after that was launched with our recommendation system should be intrinsically repeatable and that it was algorithmic, and it was based on, the things we use to estimate the long term value of that property for each individual user, not necessarily in the short term, but over the next year. We're we're trying to project the one year plus value of any experience for any user relative to a wide range of factors. And so that that is getting better all the time. It's why we're transparent with discovery. We, the more transparent we are with recommendations and the more we share with creators what the signals are, it creates an environment where creators who are satisfying all of these signals are basically building amazingly interesting and satisfying experiences.

[David Baszucki, Founder, CEO, President & Director at Roblox]

So I I do feel it's repeatable and native to the platform. And I'll hand it over to Naveen if you wanna talk about the second part of the question.

[Naveen Chopra, CFO at Paramount Global]

Yeah. Look. You know, we're confident that the more time people spend on the platform, the more they will discover new experiences. And I think that's exactly what has happened with Grow a Garden. It's obviously driven tremendous levels of engagement.

[Naveen Chopra, CFO at Paramount Global]

And we know that, basically, three quarters of the daily active users, on Grow A Garden are also engaging with at least one other experience. So, you know, that is sort of organic discovery, which leverages all the capabilities of the platform that you've heard Dave describe, I think really is working, and, GrowGarden's a great example of that.

[Stefanie Notaney, Senior Director - Corporate and Financial Communications at Roblox]

So I want to thank everyone for joining us today, and I'm going to turn it back to Rebecca to close out the call.

[Operator]

Thank you. And that does conclude today's conference call. Thank you all for your participation. You may now disconnect. Goodbye.

Participants

Executives

• Stefanie Notaney, Senior Director - Corporate and Financial Communications
• David Baszucki, Founder, CEO, President & Director

Analysts

• Naveen Chopra, CFO at Paramount Global
• Jason Bazinet, Director at Citigroup
• Clark Lampen, Managing Director at BTIG
• Benjamin Black, Co-Head Internet Equity Research at Deutsche Bank
• Cory Carpenter, Internet Equity Research at JP Morgan
• Eric Sheridan, Managing Director at Goldman Sachs
• Ken Gawrelski, MD & Senior Internet Analyst at Wells Fargo
• Matthew Cost, Executive Director - Equity Research at Morgan Stanley
• Brian Pitz, Managing Director at BMO Capital Markets
• Ross Sandler, MD & Senior Internet Research Analyst at Barclays Capital