Roblox (RBLX, Financial) shares plunged 11% on Thursday as investor concerns overshadowed strong Q4 numbers. Despite posting a Q4 revenue of $988 million, up 32% year-over-year and beating guidanceinvestors focused on dismal user growth trends. Daily active users climbed 19% to over 85 million, yet bookings per user barely increased by 1% compared to the prior year, signaling stagnation in monetization.
Management's guidance for 2025 didn't exactly assuage nerves. It forecasted lower revenue growth and wider net losses, with forecast net losses coming close to $1 billion vs. free cash flow profit of about $800 million. High stock-based compensation remains a key headwind, contributing to the widening gap that is meant to be diluted shareholder returns.
Industry leaders such as Microsoft (MSFT, Financial) and Meta Platforms (META, Financial) also decelerated cloud growth, but Roblox raised new anxiety about how long it will continue to attract and maintain users in addition to wringing out revenue expansion. Now, analysts are questioning how Roblox can overcome these monetization challenges after it posted stellar top-line numbers. The company stands at a measured crossroads; with a current stock price near $67 and a market cap of $44 billion, it is a must-watch for investors
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