Roblox Posts $1.57 Billion in Revenue Despite 12% Drop in Bookings
Key Facts
Roblox reported revenue of $1.57 billion in the third quarter of 2026, up 16% year over year and above the consensus estimate of $1.46 billion, while daily active users fell short of analysts’ expectations. Average users reached 138 million, below the market estimate of 145.77 million, while engagement hours totaled 34 billion, topping the estimate of 32.99 billion. The company reported results on October 29 and said quarterly financial results exceeded its guidance for revenue, bookings and cash flow. But the beat did not ease concerns about user numbers and the outlook, with the stock falling more than 17% in premarket trading Friday, October 30, according to Investing.com coverage citing Reuters.
Bookings totaled $1.70 billion in the third quarter, down 12% from the same period a year earlier, but above analysts’ estimate of $1.63 billion. The year-over-year comparison puts the decline against a high base, as the company recorded bookings of $1,922 million in the third quarter of 2025. Revenue, meanwhile, rose 16% year over year, reflecting the difference in timing between revenue recognition and bookings. Roblox said the vast majority of bookings are recognized as revenue over 27 months, under its revenue-recognition policy. As a result, revenue recorded in a given period includes prior bookings, while the full value of new bookings does not become revenue in that same period.
On profitability, the company reported a loss of $0.32 per share in the third quarter, narrower than analysts’ forecast of a loss of $0.43 per share. The business generated free cash flow of $364 million, compared with $443 million in the same period of 2025, according to the shareholder letter. Cash and equivalents totaled $1.09 billion at quarter-end, versus an estimate of $875.2 million. Chief Executive David Baszucki said quarterly financial results were "above our guidance for revenue, bookings and cash flow." The results show a divergence between financial metrics that exceeded guidance or estimates and user numbers that remained below market expectations.
Roblox expects fourth-quarter 2026 bookings of between $1.89 billion and $2.00 billion, compared with a consensus estimate of $2.01 billion. It also forecast revenue of between $1.47 billion and $1.58 billion, versus analysts’ estimate of $1.56 billion. The company said bookings could decline between 10% and 15% year over year in the fourth quarter, and that its outlook assumes a seasonal decline in average daily active users from the third quarter to the fourth, which it said was similar to the pattern seen in recent years. Revenue, by contrast, is expected to grow between 4% and 12% year over year in the same quarter, despite the projected drop in bookings. The company attributed the difference to most bookings being recognized as revenue over 27 months, making the timing of revenue recognition different from that of bookings.
Baszucki linked changes in the gaming industry to accelerating AI-powered content creation, saying that "AI-assisted game creation, automated code generation and AI-assisted asset creation are leading to an explosion in content." The company says the shift requires tools for distribution and discovery, as well as infrastructure to keep pace. In that context, Roblox said it expects to launch the first phase of its "Roblox Everywhere" initiative in the first half of 2027, by distributing a selected group of major games. The timing places the next distribution step in the context of the company’s effort to keep pace with the expansion of content on its platform. The company had announced a session to discuss its financial and operational results on October 29 at 1:30 p.m. Pacific time and 4:30 p.m. Eastern time.