Roblox Corp (NYSE:RBLX) shares fell nearly 30% to around $34 following the company’s second quarter results, as investors reacted to weaker monetization trends and a cautious outlook despite continued user growth.
Roblox reported an adjusted loss of $0.26 per share for the quarter ended June 30, compared with analyst estimates calling for a loss of $0.34.
Revenue came in at $1.47 billion, below expectations of roughly $1.6 billion.
The gaming platform reported continued growth in engagement, with daily active users rising 10% year-over-year to 123 million and hours engaged increasing 5% to 29 billion. Roblox said its reinstatement in Russia in June provided a modest sequential benefit to user trends, though the company estimated it remained an approximately three percentage point headwind to year-over-year growth in daily active users and hours due to the timing of the return.
International markets remained a key source of growth, with daily active users in Japan and India increasing 67% and 64%, respectively. Users in the U.S. and Canada grew 6% year-over-year.
Roblox also highlighted broader content diversification on its platform, noting that experiences outside its top 10 games saw 25% year-over-year growth in hours and more than 20% growth in Robux spending. The company said its top 10 games accounted for about 20% of total hours in the quarter, down from 30% three years ago.
However, monetization trends came under pressure during the quarter. Average monthly unique payers increased 15% year-over-year to 27 million, but Roblox said changes to its discovery algorithm contributed to a mix shift toward lower-monetizing content.
Wedbush analysts downgraded Roblox to ‘Neutra’l from a more positive stance, lowering their price target to $40 from $65, citing limited visibility following weaker monetization and the company’s decision not to reissue full-year guidance.
“Contrary to our expectations, Roblox reported decelerating monetization, driven by UCAN and the U13 cohort,” Wedbush analysts wrote. “Q3 guidance was disappointing, and the withdrawal of financial year 2026 guidance leaves visibility near zero.”
The analysts highlighted that bookings of $1.56 billion increased 8% year-over-year but came in at the low end of guidance, while daily active users and hours were broadly in line with expectations. They noted that the shortfall was concentrated in bookings per hour, particularly among US and Canada users and users under age 13.
Roblox attributed the monetization pressure to a shift away from highly monetized viral titles from 2025 toward longer-lasting games, along with changes to its recommendation algorithm designed to improve long-term retention.
“Monetization is soft while investment is rising,” Wedbush analysts wrote, adding that the company’s push toward more 18+ content places Roblox in a more competitive market alongside platforms built on engines such as Unreal Engine and Unity.
Roblox reported a net loss of $185 million for the quarter, compared with a loss of $280 million a year earlier. Adjusted EBITDA rose to $152 million from $18 million in the prior-year period, while free cash flow increased to $294 million.
The company guided Q3 bookings to between $1.58 billion and $1.65 billion, below Wedbush’s prior estimate of $1.87 billion and consensus expectations of $1.84 billion.
The analysts lowered their forecasts for bookings and adjusted EBITDA through 2028, citing uncertainty around the company’s path toward renewed growth.