Le Lézard
Classified in: Science and technology, Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Roblox Reports Second Quarter 2022 Financial Results


Roblox Corporation (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, released its second quarter 2022 financial results today as well as key metrics for the month of July 2022. Separately, Roblox posted a letter to shareholders and supplemental materials on the Roblox investor relations website at ir.roblox.com.

Second Quarter 2022 Financial Highlights

July 2022 Key Metric Estimates

"We are driving record levels of users and engagement globally as we execute on our innovation roadmap and broaden the appeal of Roblox across geographies and age groups," said David Baszucki, chief executive officer of Roblox. "We continue to make progress on key operational and product initiatives to enhance the long-term value of the Roblox platform."

"We remain focused on investing in strategic areas that we believe will drive platform growth and monetization," said Michael Guthrie, chief financial officer of Roblox. "We have a tremendous opportunity as we continue to define the future of this new immersive co-experience category."

Earnings Q&A Session

Roblox will host a live Q&A session to answer questions regarding their second quarter 2022 results on Wednesday, August 10, 2022 at 5:30 a.m. Pacific Time. The webcast will be open to the public at ir.roblox.com or by clicking here.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our business, product, strategy and user growth plans, our investment strategy, our continuation of improvements in growth rate, particularly bookings, the benefits of our product and operational initiatives, our expectation of successfully executing such strategies and plans, and our brand strength on our recruiting efforts, our employee recruitment plans, our anticipations of certain financial results, our commitment to contain share dilution, our expectations for July 2022 financial and operational results and future growth rates, our estimates of real estate and infrastructure expenses for the balance of 2022, and our expectations of future net losses. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "continue," "project," "plan," "goals," "opportunity," "appeal," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall," and "suggest," and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the "SEC"), including our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022 and other filings and reports we make with the SEC from time to time. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs; the impact of our senior notes and any future indebtedness on our business, financial condition and results of operations; the demand for our platform in general; our ability to increase our number of new users and revenue generated from users; our ability to retain and expand our user base; the impact of the COVID-19 pandemic and other macro economic trends on our business and the easing of restrictions related to the COVID-19 pandemic; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods, including as a result of changes in our accounting estimates; our ability to successfully develop and deploy new technologies to address the needs of our users; our ability to maintain and enhance our brand and reputation; our ability to hire and retain talent; news or social media coverage about Roblox, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; any breach or access to user or third-party data; and our ability to maintain the security and availability of our platform. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from our expectations is included in the reports we have filed or will file with the SEC, including our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2022.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

 ROBLOX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
(unaudited)
 
As of
June 30, December 31,

2022

2021

 
Assets
Current assets:
Cash and cash equivalents

$

3,075,475

 

$

3,004,300

 

Accounts receivable?net of allowances

 

186,825

 

 

307,349

 

Prepaid expenses and other current assets

 

57,595

 

 

32,091

 

Deferred cost of revenue, current portion

 

405,891

 

 

406,025

 

Total current assets

 

3,725,786

 

 

3,749,765

 

Property and equipment?net

 

425,950

 

 

271,352

 

Operating lease right-of-use assets

 

424,416

 

 

221,285

 

Deferred cost of revenue, long term

 

154,328

 

 

137,524

 

Intangible assets, net

 

56,317

 

 

59,666

 

Goodwill

 

130,453

 

 

118,071

 

Other assets

 

2,170

 

 

2,933

 

Total assets

$

4,919,420

 

$

4,560,596

 

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable

$

77,509

 

$

64,395

 

Accrued expenses and other current liabilities

 

231,199

 

 

180,769

 

Developer exchange liability

 

147,192

 

 

163,906

 

Deferred revenue?current portion

 

1,807,639

 

 

1,758,022

 

Total current liabilities

 

2,263,539

 

 

2,167,092

 

Deferred revenue?net of current portion

 

716,154

 

 

616,834

 

Operating lease liabilities

 

399,776

 

 

194,616

 

Long-term debt, net

 

988,345

 

 

987,723

 

Other long-term liabilities

 

13

 

 

1,408

 

Total liabilities

 

4,367,827

 

 

3,967,673

 

Commitments and contingencies
Stockholders' Equity
Common stock, $0.0001 par value; 5,000,000 and 5,000,000 authorized as of June 30, 2022, and December 31, 2021, respectively, 596,622 and 585,878 shares issued and outstanding as of June 30, 2022, and December 31, 2021, respectively; Class A common stock?4,935,000 and 4,935,000 shares authorized as of June 30, 2022, and December 31, 2021, respectively, 545,285 and 534,541 shares issued and outstanding as of June 30, 2022, and December 31, 2021, respectively; Class B common stock?65,000 and 65,000 shares authorized as of June 30, 2022, and December 31, 2021, respectively, 51,337 and 51,337 shares issued and outstanding as of June 30, 2022, and December 31, 2021, respectively

 

59

 

 

58

 

Additional paid-in capital

 

1,867,204

 

 

1,568,638

 

Accumulated other comprehensive income/(loss)

 

408

 

 

62

 

Accumulated deficit

 

(1,320,583

)

 

(983,941

)

Total Roblox Corporation stockholders' equity

 

547,088

 

 

584,817

 

Noncontrolling interests

 

4,505

 

 

8,106

 

Total stockholders' equity

 

551,593

 

 

592,923

 

Total liabilities and stockholders' equity

$

4,919,420

 

$

4,560,596

 

 
ROBLOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
         
  Three Months Ended June 30,   Six Months Ended June 30,
 

2022

 

2021

 

2022

 

2021

Revenue(1)  

$

591,207

 

 

$

454,100

 

 

$

1,128,341

 

 

$

841,076

 

Cost and expenses:        
Cost of revenue(1)(2)  

 

143,157

 

 

 

116,930

 

 

 

278,789

 

 

 

214,867

 

Developer exchange fees  

 

143,148

 

 

 

129,714

 

 

 

290,270

 

 

 

248,652

 

Infrastructure and trust & safety  

 

158,235

 

 

 

108,986

 

 

 

299,590

 

 

 

203,122

 

Research and development  

 

211,757

 

 

 

124,748

 

 

 

389,519

 

 

 

221,392

 

General and administrative  

 

78,676

 

 

 

97,678

 

 

 

136,448

 

 

 

192,053

 

Sales and marketing  

 

26,501

 

 

 

18,990

 

 

 

55,603

 

 

 

38,992

 

Total cost and expenses  

 

761,474

 

 

 

597,046

 

 

 

1,450,219

 

 

 

1,119,078

 

Loss from operations  

 

(170,267

)

 

 

(142,946

)

 

 

(321,878

)

 

 

(278,002

)

Interest income  

 

4,197

 

 

 

26

 

 

 

4,442

 

 

 

31

 

Interest expense  

 

(9,891

)

 

 

-

 

 

 

(19,890

)

 

 

-

 

Other income/(expense), net  

 

(3,051

)

 

 

10

 

 

 

(3,430

)

 

 

(1,040

)

Loss before income taxes  

 

(179,012

)

 

 

(142,910

)

 

 

(340,756

)

 

 

(279,011

)

Provision for/(benefit from) income taxes  

 

(278

)

 

 

20

 

 

 

(2

)

 

 

22

 

Consolidated net loss  

 

(178,734

)

 

 

(142,930

)

 

 

(340,754

)

 

 

(279,033

)

Net loss attributable to the noncontrolling interest  

 

(2,294

)

 

 

(2,796

)

 

 

(4,112

)

 

 

(4,682

)

Net loss attributable to common stockholders  

$

(176,440

)

 

$

(140,134

)

 

$

(336,642

)

 

$

(274,351

)

Net loss per share attributable to common stockholders, basic and diluted  

$

(0.30

)

 

$

(0.25

)

 

$

(0.57

)

 

$

(0.63

)

Weighted-average shares used in computing net loss per share attributable to common stockholders ? basic and diluted  

 

593,928

 

 

 

571,300

 

 

 

591,252

 

 

 

432,159

 

 
(1) In Q1 of 2022, our estimated user life changed from 23 months to 25 months. Based on the carrying amount of deferred revenue and deferred cost of revenue as of December 31, 2021, the change resulted in a decrease in revenue during the three and six months ended June 30, 2022 by $40.9 million and $123.5 million, respectively, and a decrease in cost of revenue during the same periods by $9.4 million and $29.0 million, respectively.
(2) Depreciation of servers and infrastructure equipment included in infrastructure and trust & safety.
 
ROBLOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
         
  Three Months Ended June 30,   Six Months Ended June 30,
 

2022

 

2021

 

2022

 

2021

Cash flows from operating activities:        
Consolidated net loss  

$

(178,734

)

 

$

(142,930

)

 

$

(340,754

)

 

$

(279,033

)

Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operations:        
Depreciation and amortization  

 

28,996

 

 

 

17,790

 

 

 

53,493

 

 

 

34,410

 

Stock-based compensation expense  

 

146,388

 

 

 

81,659

 

 

 

258,683

 

 

 

132,403

 

Operating lease non-cash expense  

 

16,303

 

 

 

10,500

 

 

 

30,300

 

 

 

20,544

 

Other non-cash charges/(credits)  

 

2,048

 

 

 

68

 

 

 

1,481

 

 

 

16

 

Amortization of debt issuance costs  

 

311

 

 

 

-

 

 

 

622

 

 

 

-

 

Changes in operating assets and liabilities, net of effect of acquisitions:        
Accounts receivable  

 

(9,865

)

 

 

16,704

 

 

 

118,318

 

 

 

29,960

 

Accounts payable  

 

(6,867

)

 

 

3,095

 

 

 

(10,635

)

 

 

2,313

 

Prepaid expenses and other current assets  

 

(15,983

)

 

 

(16,297

)

 

 

(26,923

)

 

 

(27,264

)

Other assets  

 

1,199

 

 

 

(3,075

)

 

 

764

 

 

 

(6,476

)

Developer exchange liability  

 

(2,624

)

 

 

6,278

 

 

 

(16,714

)

 

 

9,703

 

Accrued expenses and other current liabilities  

 

6,406

 

 

 

57,856

 

 

 

4,340

 

 

 

74,129

 

Other long-term liability  

 

(579

)

 

 

280

 

 

 

(579

)

 

 

584

 

Operating lease liabilities  

 

(10,021

)

 

 

(10,573

)

 

 

(21,730

)

 

 

(12,642

)

Deferred revenue  

 

52,140

 

 

 

215,497

 

 

 

148,937

 

 

 

484,936

 

Deferred cost of revenue  

 

(2,621

)

 

 

(45,601

)

 

 

(16,670

)

 

 

(107,863

)

Net cash provided by operating activities  

 

26,497

 

 

 

191,251

 

 

 

182,933

 

 

 

355,720

 

Cash flows from investing activities:        
Acquisition of property and equipment  

 

(83,812

)

 

 

(23,235

)

 

 

(135,602

)

 

 

(45,368

)

Payments related to business combination, net of cash acquired  

 

(6,165

)

 

 

-

 

 

 

(6,165

)

 

 

-

 

Purchases of intangible assets  

 

-

 

 

 

-

 

 

 

-

 

 

 

(256

)

Net cash used in investing activities  

 

(89,977

)

 

 

(23,235

)

 

 

(141,767

)

 

 

(45,624

)

Cash flows from financing activities:        
Proceeds from issuance of common stock  

 

5,548

 

 

 

11,668

 

 

 

29,876

 

 

 

41,889

 

Payment of term license related obligations  

 

(420

)

 

 

-

 

 

 

(420

)

 

 

-

 

Payment of withholding taxes related to net share settlement of restricted stock units  

 

-

 

 

 

-

 

 

 

(150

)

 

 

-

 

Net proceeds from issuance of preferred stock  

 

-

 

 

 

-

 

 

 

-

 

 

 

534,286

 

Payment of debt issuance cost  

 

-

 

 

 

-

 

 

 

(154

)

 

 

-

 

Net cash provided by financing activities  

 

5,128

 

 

 

11,668

 

 

 

29,152

 

 

 

576,175

 

         
Effect of exchange rate changes on cash and cash equivalents  

 

863

 

 

 

48

 

 

 

857

 

 

 

48

 

         
Net increase in cash and cash equivalents  

 

(57,489

)

 

 

179,732

 

 

 

71,175

 

 

 

886,319

 

Cash and cash equivalents        
Beginning of period  

 

3,132,964

 

 

 

1,600,530

 

 

 

3,004,300

 

 

 

893,943

 

End of period  

$

3,075,475

 

 

$

1,780,262

 

 

$

3,075,475

 

 

$

1,780,262

 

         
Supplemental disclosure of cash flow information:        
Cash paid for interest  

$

19,590

 

 

 

-

 

 

$

19,590

 

 

 

-

 

Cash paid for income taxes  

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

         
Supplemental disclosure of noncash investing and financing activities:        
Property and equipment additions in accounts payable and accrued expenses  

$

114,610

 

 

$

10,820

 

 

$

114,610

 

 

$

10,820

 

Fair value of common stock and unregistered restricted stock units issued as consideration for business combination  

$

10,138

 

 

 

-

 

 

$

10,138

 

 

 

-

 

Conversion of convertible preferred stock to common stock upon direct listing  

 

-

 

 

$

879,113

 

 

 

-

 

 

$

879,113

 

 

Use of Non-GAAP Financial Measures

This press release and the accompanying tables contain the non-GAAP financial measures bookings, free cash flow, and Adjusted EBITDA.

We use this non-GAAP financial information to evaluate our ongoing operations, for internal planning and forecasting purposes, and ongoing operating trends for purposes of analyzing the covenants specified in the indenture governing our senior notes due 2030. We believe that this non-GAAP financial information may be helpful to investors because it provides consistency and comparability with past financial performance.

Bookings is defined as revenue plus the change in deferred revenue during the period and other non-cash adjustments. Bookings is equal to the amount of virtual currency purchased by users in a given period of measurement. We believe bookings provide a timelier indication of trends in our operating results that are not necessarily reflected in our revenue as a result of the fact that we recognize the majority of revenue over the estimated average lifetime of a paying user. The change in deferred revenue constitutes the vast majority of the reconciling difference from revenue to bookings. By removing these non-cash adjustments, we are able to measure and monitor our business performance based on the timing of actual transactions with our users and the cash that is generated from these transactions. Free cash flow represents the net cash provided by operating activities less purchases of property, equipment, and intangible assets. We believe that free cash flow is a useful indicator of our unit economics and liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after the purchases of property, equipment, and intangible assets, can be used for strategic initiatives, including investing in our business, making strategic acquisitions, and strengthening our balance sheet. Adjusted EBITDA is a measure of operating performance used in certain covenant calculations specified in the indenture governing our senior notes due 2030 that is not calculated in accordance with GAAP and may not conform to the calculation of EBITDA in other circumstances. Adjusted EBITDA should not be considered as a substitute for net loss as determined in accordance with GAAP. We believe that, when considered together with reported amounts, Adjusted EBITDA is useful to investors and management in understanding our ongoing operations and ongoing operating trends for purposes of analyzing the covenants specified in the indenture governing our senior notes due 2030.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial information as a tool for comparison. As a result, our non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation from, or as a substitute for financial information presented in accordance with GAAP.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

  Three Months Ended June 30,   Six Months Ended June 30,
 

2022

 

2021

 

2022

 

2021

  (dollars in thousands)   (dollars in thousands)
Bookings  

$

639,902

 

$

665,480

 

$

1,271,108

 

$

1,317,757

The following table presents a reconciliation of revenue, the most directly comparable financial measure calculated in accordance with GAAP, to bookings, for each of the periods presented:

  Three Months Ended June 30,   Six Months Ended June 30,
 

2022

 

2021

 

2022

 

2021

  (dollars in thousands)   (dollars in thousands)
Reconciliation of revenue to bookings:        
Revenue  

$

591,207

 

 

$

454,100

 

 

$

1,128,341

 

 

$

841,076

 

Add (deduct):        
Change in deferred revenue  

 

52,140

 

 

 

215,497

 

 

 

148,937

 

 

 

484,936

 

Other  

 

(3,445

)

 

 

(4,117

)

 

 

(6,170

)

 

 

(8,255

)

Bookings  

$

639,902

 

 

$

665,480

 

 

$

1,271,108

 

 

$

1,317,757

 

         
  Three Months Ended June 30,   Six Months Ended June 30,
 

2022

 

2021

 

2022

 

2021

  (dollars in thousands)   (dollars in thousands)
Free cash flow  

$

(57,315

)

 

$

168,016

 

$

47,331

 

$

310,096

The following table presents a reconciliation of net cash from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, for each of the periods presented:

  Three Months Ended June 30,   Six Months Ended June 30,
 

2022

 

2021

 

2022

 

2021

  (dollars in thousands)   (dollars in thousands)
Reconciliation of net cash from operating activities to free cash flow:        
Net cash provided by operating activities  

$

26,497

 

 

$

191,251

 

 

$

182,933

 

 

$

355,720

 

Add (deduct):        
Acquisition of property and equipment  

 

(83,812

)

 

 

(23,235

)

 

 

(135,602

)

 

 

(45,368

)

Purchases of intangible assets  

 

-

 

 

 

-

 

 

 

-

 

 

 

(256

)

Free cash flow  

$

(57,315

)

 

$

168,016

 

 

$

47,331

 

 

$

310,096

 

Acquisition of property and equipment primarily includes servers, infrastructure equipment and tenant improvements.

  Three Months Ended June 30,   Six Months Ended June 30,
 

2022

 

2021

 

2022

 

2021

  (dollars in thousands)   (dollars in thousands)
Adjusted EBITDA  

$

54,636

 

$

180,071

 

$

122,565

 

$

370,245

The following table presents a reconciliation of consolidated net loss, the most directly comparable financial measure calculated in accordance with GAAP, to adjusted EBITDA, for each of the periods presented:

  Three Months Ended June 30,   Six Months Ended June 30,
 

2022

 

2021

 

2022

 

2021

Reconciliation of consolidated net loss to adjusted EBITDA:   (dollars in thousands)   (dollars in thousands)
Consolidated net loss  

$

(178,734

)

 

$

(142,930

)

 

$

(340,754

)

 

$

(279,033

)

Add (deduct):        
Interest income  

 

(4,197

)

 

 

(26

)

 

 

(4,442

)

 

 

(31

)

Interest expense  

 

9,891

 

 

 

-

 

 

 

19,890

 

 

 

-

 

Other income/(expense), net  

 

3,051

 

 

 

(10

)

 

 

3,430

 

 

 

1,040

 

Provision for/(benefit from) income taxes  

 

(278

)

 

 

20

 

 

 

(2

)

 

 

22

 

Depreciation and amortization  

 

28,996

 

 

 

17,790

 

 

 

53,493

 

 

 

34,410

 

Stock-based compensation expense  

 

146,388

 

 

 

81,659

 

 

 

258,683

 

 

 

132,403

 

Change in deferred revenue  

 

52,140

 

 

 

215,497

 

 

 

148,937

 

 

 

484,936

 

Change in deferred cost of revenue  

 

(2,621

)

 

 

(45,601

)

 

 

(16,670

)

 

 

(107,863

)

Fees related to equity offering  

 

-

 

 

 

(103

)

 

 

-

 

 

 

50,586

 

Fees related to certain legal settlements  

 

-

 

 

 

53,775

 

 

 

-

 

 

 

53,775

 

Adjusted EBITDA  

$

54,636

 

 

$

180,071

 

 

$

122,565

 

 

$

370,245

 

About Roblox

Roblox is reimagining the way people come together to connect, create and express themselves through immersive, interactive shared experiences. Every day, millions of people around the world play, learn, communicate, and expand their friendships as they explore millions of user-generated digital experiences, all built by creators on the platform. Our mission is to connect billions of users with civility and optimism and support a safe and diverse community ? one that inspires and fosters creativity and positive relationships among people around the world. For more information, please visit corp.roblox.com.

ROBLOX and the Roblox logo are among the registered and unregistered trademarks of Roblox Corporation in the United States and other countries. © 2022 Roblox Corporation. All rights reserved.

Source: Roblox Corporation


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