In its recent earnings report, Roblox reveals that it accounted for over $900 million in losses in 2022 despite its average daily active user numbers going up during the same period, year-on-year. Roblox has been growing in popularity over the past few years, particularly after the social gaming platform went live on Android and iOS, followed by its IPO. Its latest financial report paints an interesting picture of how the company has fared last year.
One of the contributing factors to Roblox's growth is its many collaborations with other franchises ranging from Chipotle to Sonic The Hedgehog that enable the Roblox Corporation to bring a slew of gaming experiences to the platform. Alongside this growing popularity, the company is also actively investing in technologies and infrastructural capabilities. For instance, the platform has already filed a patent for an age-appropriate Roblox content recommendation system and another that allows creators to implement advanced facial animations via its texture manipulation technology. Now, it appears these seemingly long-term investments have made their mark in the company's latest earnings as well.
According to Roblox's financial report, the platform has recorded $291.5 million in net losses during the fourth quarter of the year ending in 2022, which incidentally follows a similar third quarter where Roblox reported $300 million in losses. Overall, its net losses amounted to $934.14 for the year ending 2022. The company changed its estimated user life from 23 months to 25 months in Q1 2022 and to 28 months in Q3. As a result, the carrying amount of deferred revenue and deferred cost of revenue has translated to a $344.9 million decrease in revenue during 2022. Additionally, in a previous report, the company attributed these negative figures to its non-GAAP target long-term investments.
Although Roblox has recorded net losses for 2022, the platform has been notably growing over the same period. The company's earnings claim that average daily active users amounted to 56 million in 2022, a 23% increase year-on-year. Its "hours engaged" marked a similar trajectory at 49.3 billion hours which is a 19% rise year-on-year. As per founder and CEO of Roblox, David Baszucki, "2022 was a year of innovation and invention for Roblox" and the company's Chief Financial Officer echoed similar sentiments remarking that "growth was strong across all geographies and age groups."
Interestingly, Roblox also mentions that it will discontinue publishing monthly key metrics following the release of March 2023 numbers in April. The company claims that its month-to-month variability in results is more volatile than quarterly figures which causes more "short-term market reactions." While the ceasing of reporting monthly stats may not help in terms of transparency, both fans and shareholders may find it encouraging that Roblox is looking to expand its footprint even further in the coming months. For instance, Roblox is reportedly coming to Meta Quest this year, along with other possible platforms such as PlayStation and Switch. How all of this pans out for Roblox, only time will tell.
Roblox is available now on Android, iOS, PC, and Xbox One.
Source: Roblox
