Roblox Revenue Jumps 43% — But a Viral Hit-Free Outlook Raises Questions

Date of Call: Feb 5, 2026

Financials Results

• Revenue: $1.4B, up 43% YOY

Guidance:

• Bookings growth expected to be 22% to 26% for 2026.
• At high end of bookings range, margins expected relatively flat YOY; at low end, slight YOY decline expected.
• Free cash flow growth estimated at 26% YOY at the midpoint of guidance.
• Guidance does not assume another viral hit of the magnitude of prior hits.

Business Commentary:

Strong Financial Performance in 2025:

• Roblox Corporation reported revenue of $1.4 billion for Q4 2025, up 43% year-on-year, and bookings of $2.2 billion, up 63% year-on-year.
• The significant increase in both revenue and bookings was driven by strong engagement and growth across all regions, including a notable rise in DAUs and engagement hours.

Growth in User Engagement and Demographics:

• DAUs in Q4 2025 grew by 69% year-on-year, with engagement hours reaching 35 billion, an increase of over 88% year-on-year.
• The growth was attributed to the emergence of viral hits and advancements in search and discovery features, alongside a significant increase in the 18-plus demographic, which grows at over 50% and has a higher monetization rate.

DevEx and Creator Earnings:

• DevEx in Q4 2025 was $477 million, up 70% year-on-year, with creators earning over $1.5 billion for the first time in 2025.
• The increase in DevEx and creator earnings was due to technical advancements and optimizations that facilitated higher engagement and monetization opportunities.

AI and Platform Expansion:

• Roblox is leveraging AI to enhance platform capabilities, including personalized discovery, safety features, and content creation, with AI driving a double-digit increase in unique experiences surfaced through recommendations.
• These innovations are aimed at expanding the definition of gaming and supporting the creation of more diverse and engaging experiences on the platform.

International Growth and Market Strategy:

• Roblox saw significant growth in APAC, with Japan at 60%, India at 10%, and Indonesia at over 700% year-on-year growth.
• The strong international growth is supported by the platform's ability to adapt to various markets, offering a unique environment for all ages, which is a long-term strategic opportunity.

Sentiment Analysis:

Overall Tone: Positive

• Management expressed strong conviction in growth, citing 'incredible progress,' 'outperformance,' and exceeding guidance. They are 'bullish about our future' and see 'enormous room for advancement' and 'enormous opportunity' with AI and new user cohorts. The platform is described as 'healthier than ever' with 'strong growth rates.'

Q&A:

• Question from Kenneth Gawrelski (Wells Fargo): Could you give more color on the elements that inform the bookings outlook and your visibility beyond Q1? Also, elaborate on the opportunity to target 18+ and recent AI developments.
  Response: Confidence is based on internal leading indicators showing platform health, diversity of content, and quality of users from 2025. AI is expanding the definition of gaming and is used throughout the tech stack, with a focus on multiplayer cloud synchronization as the core.

• Question from Eric Sheridan (Goldman Sachs): What have been the key lessons from the discovery evolution over the last 12 months and how does it align with strategic priorities?
  Response: Focus is on optimizing discovery for long-term user engagement and platform health, not short-term gains, leading to more robust content diversity and user connections.

• Question from Matthew Cost (Morgan Stanley): What drove the strong gross margins in Q4? Also, how does Roblox differentiate from AI disruption risks?
  Response: Gross margin improvement was due to a tailwind from COGS (shift to lower-cost platforms) and strong bookings growth providing leverage. AI presents an opportunity for expansion beyond gaming, with Roblox's core strength in multiplayer cloud tech being a differentiator.

• Question from Omar Dessouky (BofA Securities): How do you think about dilution from stock-based comp in 2026 given the stock price? What is the ROI on strategic investments?
  Response: Dilution is modeled long-term; focus is on operating results to create shareholder value, which will ultimately reduce dilution.

• Question from Brian Pitz (BMO Capital Markets): Update on advertising ambitions for 2026 and any challenges with the age verification rollout?
  Response: Advertising is expected to show healthy but modest growth. Age verification rollout is progressing well, leading to opportunities for optimization and highlighting Roblox's unique approach to platform safety.

• Question from Cory Carpenter (JPMorgan Chase & Co): Comment on building presence in China and confidence in aging up younger users.
  Response: Opportunity in China is significant, with a plan for an air-gapped deployment. Confidence in the 18+ cohort is high due to strong growth rates and the same platform advantages applying across all ages.

• Question from Andrew Northcutt (Wolfe Research): Have you seen any change in behavior or engagement from users who completed age check? Could it be viewed as a quality of life update?
  Response: Age check enables more accurate matchmaking across age bands, which is seen as a long-term growth driver and a gold standard for platform safety.

• Question from James Heaney (Jefferies): Why does the Q1 bookings guide show a >20% sequential decline? Is there anything specific called out?
  Response: The decline is due to the absence of a big new viral hit, but the platform's health is strong, with growth slowing as expected after the peak of large hits.

Contradiction Point 1

Advertising Growth Contribution

Describing advertising's role shifts from a cautious, future focus to acknowledging a healthier, though still modest, near-term contributor.

What is the current status of advertising ambitions and their projected 2026 growth contribution, and what challenges have been encountered and adjustments made during the age verification rollout? - Brian Pitz (BMO Capital Markets)

2025Q4: Advertising is expected to show healthy growth in 2026 but will remain modest as a top-line contributor. - Naveen Chopra(CFO)

What are your early learnings in rewarded video, and how high a priority will it be in 2026? - Cory Carpenter (JPMorgan)

2025Q3: Roblox remains bullish on the long-term opportunities in advertising but is cautious in the near term to ensure it gets the integration right... It is not something called out as a major near-term contributor but is seen as a key part of the business for the future. - David Baszucki(CEO)

Contradiction Point 2

2026 Guidance Specificity

The stance on providing specific 2026 guidance shifts from a clear refusal to a more indirect acknowledgment of future factors.

Q1 bookings guidance indicates a >20% sequential decline. Is this due to specific factors or conservatism? - James Heaney (Jefferies LLC)

2025Q4: The sequential slowdown is expected as the company moves past the period of massive viral hits... The guidance range accounts for some uncertainty. - Naveen Chopra(CFO)

Is the unchanged long-term objective for next year implying 2026 growth will be below 20%? - Jason Bazinet (Citigroup)

2025Q3: The company is not providing specific 2026 guidance at this time. It is too early to dial in expectations for 2026. - Naveen Chopra(CFO)

Contradiction Point 3

Booking Outlook and Growth Expectations

Guidance for bookings growth appears inconsistent, shifting from strong sequential growth to a projected decline.

Does the Q1 bookings guide's >20% sequential decline indicate specific issues or conservatism? - James Heaney (Jefferies LLC)

2025Q4: The Q1 bookings guide implies a >20% sequential decline. Is there anything specific to call out, or is it just conservatism? - Naveen Chopra(CFO)

How will current growth and a developer-friendly environment drive accelerated growth for Roblox by 2026 and beyond? - William Lampen (BTIG, LLC)

2025Q2: How does the current growth and reduced friction for developers translate to a faster run rate of growth for Roblox in 2026 and beyond? - David Baszucki(CEO)

Contradiction Point 4

Role and Readiness of Advertising

The expected growth contribution from advertising shifts from being a new, expanding component to remaining a modest contributor.

What updates can you provide on advertising ambitions' 2026 growth contribution and challenges/adjustments in the age verification rollout? - Brian Pitz (BMO Capital Markets)

2025Q4: Advertising is expected to show healthy growth in 2026 but will remain modest as a top-line contributor. - Naveen Chopra(CFO)

Can you provide an update on the Google advertising partnership, including the implementation timeline and ad monetization opportunities, as well as whether you're bringing in other third-party demand sources? - Kenneth James Gawrelski (Wells Fargo Securities, LLC)

2025Q2: The goal is for ads to become a natural monetization component for experiences that fit. - David Baszucki(CEO)

Contradiction Point 5

Role and Focus of AI Technology

AI's purpose shifts from a general enhancement tool to a core, differentiating technology.

What drove the strong gross margins in Q4, and how is Roblox addressing AI disruption concerns while differentiating itself? - Matthew Cost (Morgan Stanley)

2025Q4: The core differentiator is its multiplayer, 3D cloud synchronization technology and communication infrastructure. World models offer tools for creation... but the fundamental challenge remains building interactive, multiplayer cloud experiences. - David Baszucki(CEO)

What is the expected margin improvement rate for the year and the impact of AI tools on margins? - Shweta Khajuria (Wolfe Research)

2025Q1: AI is viewed as a \"human acceleration tool\" that enhances output and quality for Roblox engineers, platform creators, and users. - David Baszucki(CEO)