Roblox (RBLX) stock swung sharply in pre-market trading, jumping more than 8% initially before falling 6%, despite beating third-quarter earnings estimates. Shares are trading down 10.5% in regular trading at the time of writing.
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Roblox posted a diluted loss of $0.37 per share, narrower than the consensus loss of $0.49 per share. Revenue climbed 48% year-over-year to $1.36 billion.
Details of Roblox’s Q3 Results
On a positive note, bookings rose 70% year-over-year to $1.92 billion, exceeding expectations of $1.69 billion. Because Roblox recognizes about 80% of its revenue over 27 months, analysts prefer to track bookings, the total value of sales, to better gauge the company’s performance.
Moreover, average daily active users (DAUs) reached 151.5 million, up 70% from a year ago, surpassing the 150 million mark for the first time. Users have been consistently increasing the hours engaged on the gaming platform supported by a new slate of hit releases, including Grow A Garden and Steal a Brainrot. For Q3, Hours Engaged grew 91% year-over-year to 39.6 billion.
Roblox Lifts Q4 and FY25 Outlook
Building on its current momentum, Roblox has raised its guidance for the fourth quarter and full fiscal year 2025.
For Q4, Roblox now expects revenue between $1.35 billion and $1.4 billion, while bookings are projected to range from $2 billion to $2.05 billion, exceeding the consensus estimate of $1.83 billion.
For fiscal 2025, revenue is forecast at $4.826 billion and $4.876 billion. Full year bookings are projected between $6.566 billion and $6.616 billion, above the consensus of $6.16 billion.
Is RBLX Stock a Buy, Hold, or Sell?
Ahead of the Q3 results, analysts remained divided on Roblox’s long-term outlook. On TipRanks, RBLX stock has a Moderate Buy consensus rating based on 16 Buys, six Holds, and one Sell rating. The average Roblox price target of $152.36 implies 13.9% upside potential from current levels. Year-to-date, RBLX stock has surged 131%.
