Roblox Corp (NYSE:RBLX) shares plunged more than 23% after the online game platform and game creation system downwardly revised its bookings forecast for the full year, joining other video game companies struggling amid softening post-pandemic demand.
Roblox now expects 2024 bookings between $4 billion and $4.1 billion, below its earlier forecast of $4.14 billion to $4.28 billion.
The company’s second quarter guidance also disappointed investors. It expects Q2 bookings of $885 million at the midpoint, below Wall Street estimates of $938.6 million.
Roblox told investors during its post-earnings call that it was being conservative with its guidance due to the timing of the Easter holiday, a period of high engagement on its platform, being in Q1 instead of Q2 like last year.
For the first three months of 2024, revenue was up 22% year-over-year to $801.3 million but missed estimates of $806.2 million.
The company also slightly narrowed its net loss per share from $0.44 in Q1 2023 to $0.43, ahead of estimates of a loss per share of $0.53.
Hours of engagement were 16.7 billion, up 15% year-over-year but below estimates of 17.1 billion, with average daily active users (DAUs) up 17% to 77.7 million.
“Our teams have been hard at work identifying opportunities to drive DAUs, hours, and bookings growth rates back to 20% year-over-year,” Roblox CEO David Baszucki commented.
The figures already indicate each player spends around 16.54 hours per week on Roblox, or almost two and a half hours a day.
Baszucki highlighted changes to the platform’s AI-driven discovery algorithm, positioning of content on its homepage, the reintroduction of platform-wide events, and updates to its app.
“Based on results since the middle of April, we believe that these steps are yielding positive results,” the CEO said.
Michael Guthrie, Roblox CFO, added that the company is operating more efficiently.
“Over the past three quarters we have reduced certain infrastructure and trust and safety expenditures, and we have reduced the growth rate of personnel costs (excluding stock-based compensation expense) by holding headcount flat,” Guthrie said.
“Capital expenditures are down nearly 50% in Q1 2024 compared to last year. As a result, this past quarter we produced record amounts of operating and free cash flow.”
Roblox shares traded down 23.1% at $30 on Thursday morning post-earnings.