![]() ![]() ![]() MyKayaPlus Verdictįor a growth stock like Roblox, just looking at the general figures like revenue growth will not yield beneficial or decision-making thoughts for a sound investing game plan.Īnd by using an actual company’s results as a real case study, you would agree with me that it’s easy to get fooled into potentially buying into a wrong stock. That means its daily active users are actually spending lesser on the platform on an average basis. Going back to the DAU chart, Roblox had a DAU of 49.5 million back in 4Q’21, compared to 58.8 million in 4Q’22.Įven with a larger DAU base, Roblox still came in with a lower average booking per DAU. Roblox’s average booking per DAU can be cyclical, often posting higher average bookings in the fourth quarter.ĤQ’22 had the strongest average bookings in the whole of FY 2022. When your daily active user base is not growing, and spending lesser time, the tendency of bookings might be impacted. Lower average bookings per DAU Source: Roblox Q4’22-Supplemental-Materials That means, even the daily active users are spending fewer hours on Roblox.Īnd that certainly is not promising. Drop in engagement hours Source: Roblox Q4’22-Supplemental-MaterialsĪpart from how many users are using a platform on a daily basis, how LONG these users are on a platform is also vital.Ī growing active user base and growing engagement hours give an indication that an application or platform has got its user base hooked.īut for Q4’22, not only userbase flattened out, even the engagement hours started to drop. That plateauing DAU, if persists, would be very worrisome. Even from a YoY comparison, it’s only a 19% growth. When it comes to application or platform user-base growth, even social media sites like Facebook by Meta Platforms Inc (NASDAQ: META) also track its users daily (DAU) or monthly (MAU).įor Roblox, its DAU has been flat from Q3’22 to Q4’22. Plateauing DAU Source: Roblox Q4’22-Supplemental-Materials And in times of high-interest rates and moderating growth, going for debt financing or equity injection will not be good either way.ĭebt would be serviced by a higher borrowing expense, while equity financing will dilute shareholder rights faster than the growth rate. This means that the company might need cash injections to operate and grow. This also hit the operating cash flow hard.Īfter accounting for capital expenditure, free cash flow for the last 3 quarters is in negative territory. Negative free cash flow for successive 3 quarters Source: Roblox Q4’22-Supplemental-Materialsĭue to higher costs and expenses, net profit continued to exacerbate. Are current users still full with Robux, which leads to lower revenue growth, and thus also a plateauing booking growth? 3. Although Q4’22 Roblox achieved a historical high in terms of its total bookings, one might want to drill down on the growth rate, which is lesser than 20%.Īnd if we tie and look at both revenue and bookings together, the figures start to tell more. Bookings hit a historical high amidst plateauing growth rate Source: Roblox Q4’22-Supplemental-Materials The YoY growth rate has been descending rapidly from triple digits to single-digit in just 2 years. It did not even report a better revenue than Q2’22. While many would say that the total addressable market for gaming is huge and Roblox is just scratching the surface, its latest revenue growth does not look convincing.įor Q4’22, Roblox reported a revenue of USD 579 million, which is just 2% YoY. Roblox’s YoY revenue growth is just 2% Source: Roblox Q4’22-Supplemental-Materials With that, let’s delve into some disturbing matrices of Roblox’s latest results. So, booking growth is the leading indicator of revenue growth potential. Whenever a user spends the in-game currency, only then revenue is recognized. Whenever this transaction happens, Roblox will report a booking recognition. In most games, users spend real currencies to obtain an in-game currency. Source: Roblox Q4’22-Supplemental-Materials Prior to that, to fully understand some of the key operating matrices of Roblox’s operations, Roblox splits its operations into revenue, deferred revenue, and bookings. Although most general matrices are positive, there are some worrying aspects to take note of. Roblox released its latest Q4’22 and FY’22 results, and share prices popped by more than 26%. ![]() It is a user-generated content gaming platform, that empowers creators to create and earn from their creations. Roblox Corporation (NYSE: RBLX) is a global platform bringing millions of people ![]()
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