Roblox Corp (NYSE:RBLX) shares fell about 10% following the company’s third quarter earnings report, as investors met higher costs with caution, despite strong revenue growth and better-than-expected earnings.
The video-game platform reported a net loss of $257.4 million for Q3, widening from a $240.4 million loss a year earlier.
Roblox posted a loss per share of $0.37, beating analysts’ estimate of a loss per share $0.49, while revenue came in at $1.92 billion, surpassing the consensus of $1.68 billion.
However, rising costs weighed on profitability. Cost of revenue climbed 45% to $296.5 million, and combined with higher infrastructure and trust-and-safety expenses, these costs contributed to continued operating losses. Personnel expenses, excluding stock-based compensation, rose 24% to $250.4 million.
Roblox highlighted that some cost increases were linked to scaling for higher user engagement, including third-party cloud infrastructure to support more concurrent players.
For the full fiscal year, the company projected revenue between $6.57 billion and $6.62 billion, above the $6.16 billion forecasted by Wall Street.
“Our third-quarter results demonstrate the tremendous progress weʼve made toward our goal of capturing 10% of the global gaming market,” Roblox CEO David Baszucki said in a statement.
He also noted that the company is on track to expand age estimation to all users who access its communication features by early 2025. “We believe this initiative will establish a best-in-class standard for communication safety on social media and communications platforms,ˮ Baszucki said.