Business Wire | May 10, 2021 04:06PM EDT

Roblox Reports First Quarter 2021 Financial Results

May 10, 2021

SAN MATEO, Calif.--(BUSINESS WIRE)--May 10, 2021--Roblox Corporation (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, released its first quarter 2021 financial results today and separately posted a letter to shareholders and supplemental materials on the Roblox investor relations website at ir.roblox.com.

First Quarter 2021 Financial Highlights

* Revenue increased 140% over Q1 2020 to $387.0 million * Net Loss for Q1 2020 was $134.2 million * Net cash provided by operating activities increased nearly 4x over Q1 2020 to $164.5 million (including one-time direct listing expenses of $51.9 million). Exclusive of one-time expenses related to our direct listing, net cash provided by operating activities would have been $216.4 million. * Bookings increased 161% over Q1 2020 to $652.3 million * Free Cash Flow increased 4.1x over Q1 2020 to $142.1 million * Average Daily Active Users (DAUs) were 42.1 million, an increase of 79% year over year driven by: 87% growth in DAUs outside of the US/Canada 111% growth in DAUs over the age of 13 * Hours Engaged were 9.7 billion, an increase of 98% year over year primarily driven by: 104% growth in engagement in markets outside of the US/Canada 128% growth from users over the age of 13 * Average Bookings per DAU (ABPDAU) was $15.48, an increase of 46% year over year

April 2021 Key Metric Estimates

* Daily active users were 43.3 million, up 37% from April of last year and up sequentially from 42.3 million in March 2021 * Hours engaged were 3.2 billion, up 18% year over year and flat sequentially from March 2021 * Bookings were between $242 million and $245 million, up 59% - 61% year over year and up sequentially 7% - 9% from March 2021 when bookings were $225.3 million * Average bookings per DAU were between $5.59 - $5.66, up 16% - 17% year over year and 5% - 6% sequentially from March 2021 * Revenue was $143 million - $145 million, up 136% - 140% year over year and 5% - 7% sequentially from March 2021

"A fundamental part of being human is connecting with others, and we're inspired by the way in which the Roblox community creates and shares experiences to play, work and even learn together," said David Baszucki, Roblox CEO. "The opportunity of what we're building at Roblox is massive, and we will continue to make long-term investments as we build a human co-experience platform that enables shared experiences among billions of users."

"Our first quarter 2021 results enabled us to continue investing aggressively in the key areas that we believe will drive long term growth and value, specifically hiring talented engineering and product professionals and growing the earnings for our developer community," said Michael Guthrie, Chief Financial Officer of Roblox. "We believe we must continue to innovate and so remain focused on building great technology to make progress on our key growth vectors, primarily international expansion and expanding the age demographic of our users."

Earnings Q&A Session

Roblox will host a live Q&A session to answer questions regarding their first quarter 2021 results on Tuesday, May 11, 2021 at 5:30 a.m. Pacific Time. The webcast will be open to the public at ir.roblox.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our product development, investment strategy, business strategy and plans. These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts, and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "plan," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," "shall," and variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond our control. Our actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to risks detailed in our filings with the Securities and Exchange Commission (the "SEC"), including in our registration statement on Form s-1 filed with, and declared effective by, the SEC. In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: our ability to successfully execute our business and growth strategy; the sufficiency of our cash and cash equivalents to meet our liquidity needs; the demand for our platforms in general; our ability to increase our number of new users and revenue generated from users; our ability to retain and expand our user base; the impact of the COVID 19 pandemic restrictions on our business; the fluctuation of our results of operations and our key business measures on a quarterly basis in future periods; our ability to successfully develop and deploy new technologies to address the needs of our users; our ability to maintain and enhance our brand and reputation; our ability to hire and retain talent; news or social media coverage of the Company, including but not limited to coverage that presents, or relies on, inaccurate, misleading, incomplete, or otherwise damaging information; and any breach or access to user or third-party data. Additional information regarding these and other risks and uncertainties that could cause actual results to differ materially from the Company's expectations is included in our registration statement on Form S-1.

The forward-looking statements included in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Past performance is not necessarily indicative of future results.

ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts)

(unaudited)



Three Months Ended March 31,

2021 2020

Revenue $ 386,976 $ 161,570

Cost and expenses:Cost of revenue^(1) 97,937 41,793

Developer exchange fees 118,938 44,499

Infrastructure & trust and safety 94,136 52,620

Research and development 96,644 49,409

General and administrative 94,375 30,558

Sales and marketing 20,002 15,657

Total cost and expenses 522,032 234,536

Loss from operations (135,056 ) (72,966 )

Interest income 5 1,247

Other expense (1,050 ) (3,157 )

Loss before provision for income taxes (136,101 ) (74,876 )

Provision (benefit) for income taxes 2 1

Consolidated net loss (136,103 ) (74,877 )

Net loss attributable to the noncontrolling (1,886 ) (498 )interestNet loss attributable to common stockholders ($ 134,217 ) ($ 74,379 )

Net loss per share attributable to common ($ 0.46 ) ($ 0.44 )stockholders, basic and dilutedWeighted-average shares used in computing net 291,074 169,542 loss per share attributable to commonstockholders - basic and diluted(1)

Depreciation of servers and infrastructure equipment included in infrastructure and trust & safety.

(1) Depreciation of servers and infrastructure equipment included in infrastructure and trust & safety.

ROBLOX CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands, except per share amounts)(unaudited)As of

March 31,

December 31,

2021

2020

AssetsCurrent assets:Cash and cash equivalents$

1,600,530

$

893,943

Accounts receivable-net of allowances233,781

246,986

Prepaid expenses and other current assets29,135

26,274

Deferred cost of revenue, current portion309,388

256,928

Total current assets2,172,834

1,424,131

Property and equipment-net209,794

206,415

Operating lease right-of-use assets205,117

-

Deferred cost of revenue, long term123,595

113,793

Intangible assets, net40,202

42,326

Goodwill59,568

59,568

Other assets4,969

1,567

Total assets$

2,816,079

$

1,847,800

Liabilities, Convertible Preferred Stock, and Stockholders' Equity (Deficit)Current liabilities:Accounts payable$

8,269

$

12,012

Accrued expenses and other current liabilities122,285

65,392

Developer exchange liability84,337

80,912

Deferred revenue-current portion1,295,464

1,070,230

Total current liabilities1,510,355

1,228,546

Deferred revenue-net of current portion528,904

484,699

Operating lease liabilities184,721

-

Other long term liabilities505

22,109

Total liabilities2,224,485

1,735,354

Commitments and contingenciesConvertible Preferred StockConvertible preferred stock, Series A, B, C, D, D-1, E, F, and G $0.0001 par value, zero and 349,522 shares authorized as of March 31, 2021, and December 31, 2020, respectively; zero and 337,235 shares issued and outstanding as of March 31, 2021, and December 31, 2020, respectively; aggregate liquidation preference of zero and $335,654 as of March 31, 2021, and December 31, 2020, respectively-

344,827

Stockholders' Equity (Deficit)Preferred stock; $0.0001 par value per share; 100,000 and zero shares authorized as of March 31, 2021 and December 31, 2020, respectively; zero shares issued and outstanding as of March 31, 2021 and December 31, 2020-

-

Common stock, $0.0001 par value; 5,000,000 and 740,000 authorized as of March 31, 2021, and December 31, 2020, respectively, 568,894 and 201,327 shares issued and outstanding as of March 31, 2021, and December 31, 2020, respectively; Class A common stock-4,935,000 and 675,000 shares authorized as of March 31, 2021, and December 31, 2020, respectively; 515,307 and 144,039 shares issued and outstanding as of March 31, 2021, and December 31, 2020, respectively; Class B common stock-65,000 shares authorized as of March 31, 2021, and December 31, 2020, respectively, 53,587 and 57,287 shares issued and outstanding as of March 31, 2021, and December 31, 2020, respectively57

20

Additional paid-in capital1,199,833

239,792

Accumulated other comprehensive income90

90

Accumulated deficit(626,507

)

(492,290

)

Total Roblox Corporation stockholders' equity (deficit)573,473

(252,388

)

Noncontrolling interests18,121

20,007

Total stockholders' equity (deficit)591,594

(232,381

)

Total liabilities, convertible preferred stock, and stockholders' equity (deficit)$

2,816,079

$

1,847,800

ROBLOX CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands, except per share amounts)(unaudited) As of

March 31, December 31,

2021 2020

AssetsCurrent assets:Cash and cash equivalents $ 1,600,530 $ 893,943

Accounts receivable-net of allowances 233,781 246,986

Prepaid expenses and other current assets 29,135 26,274

Deferred cost of revenue, current portion 309,388 256,928

Total current assets 2,172,834 1,424,131

Property and equipment-net 209,794 206,415

Operating lease right-of-use assets 205,117 -

Deferred cost of revenue, long term 123,595 113,793

Intangible assets, net 40,202 42,326

Goodwill 59,568 59,568

Other assets 4,969 1,567

Total assets $ 2,816,079 $ 1,847,800

Liabilities, Convertible Preferred Stock, andStockholders' Equity (Deficit)Current liabilities:Accounts payable $ 8,269 $ 12,012

Accrued expenses and other current liabilities 122,285 65,392

Developer exchange liability 84,337 80,912

Deferred revenue-current portion 1,295,464 1,070,230

Total current liabilities 1,510,355 1,228,546

Deferred revenue-net of current portion 528,904 484,699

Operating lease liabilities 184,721 -

Other long term liabilities 505 22,109

Total liabilities 2,224,485 1,735,354

Commitments and contingenciesConvertible Preferred StockConvertible preferred stock, Series A, B, C, D,D-1, E, F, and G $0.0001 par value, zero and349,522 shares authorized as of March 31, 2021,and December 31, 2020, respectively; zero and - 344,827 337,235 shares issued and outstanding as ofMarch 31, 2021, and December 31, 2020,respectively; aggregate liquidation preferenceof zero and $335,654 as of March 31, 2021, andDecember 31, 2020, respectivelyStockholders' Equity (Deficit)Preferred stock; $0.0001 par value per share;100,000 and zero shares authorized as of March - - 31, 2021 and December 31, 2020, respectively;zero shares issued and outstanding as of March31, 2021 and December 31, 2020Common stock, $0.0001 par value; 5,000,000 and740,000 authorized as of March 31, 2021, andDecember 31, 2020, respectively, 568,894 and201,327 shares issued and outstanding as ofMarch 31, 2021, and December 31, 2020,respectively; Class A common stock-4,935,000 and675,000 shares authorized as of March 31, 2021, 57 20 and December 31, 2020, respectively; 515,307 and144,039 shares issued and outstanding as ofMarch 31, 2021, and December 31, 2020,respectively; Class B common stock-65,000 sharesauthorized as of March 31, 2021, and December31, 2020, respectively, 53,587 and 57,287 sharesissued and outstanding as of March 31, 2021, andDecember 31, 2020, respectivelyAdditional paid-in capital 1,199,833 239,792

Accumulated other comprehensive income 90 90

Accumulated deficit (626,507 ) (492,290 )

Total Roblox Corporation stockholders' equity 573,473 (252,388 )(deficit)Noncontrolling interests 18,121 20,007

Total stockholders' equity (deficit) 591,594 (232,381 )

Total liabilities, convertible preferred stock, $ 2,816,079 $ 1,847,800 and stockholders' equity (deficit)ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(unaudited)

Three Months Ended March 31,

2021

2020

Cash flows from operating activities:Consolidated net loss$

(136,103

)

$

(74,877

)

Adjustments to reconcile net loss including noncontrolling interests to net cash provided by (used in) operations:Depreciation and amortization16,620

9,085

Stock-based compensation expense50,744

42,257

Change in fair value of warrants-

1,890

Other non-cash charges/(credits)(52

)

302

Changes in operating assets and liabilities, net of effect of acquisitions:Accounts receivable13,256

1,183

Accounts payable(782

)

669

Prepaid expenses and other current assets(10,967

)

(7,301

)

Operating lease right of use assets(9,173

)

-

Other assets(3,401

)

902

Developer exchange liability3,425

(1,454

)

Accrued expenses and other current liabilities16,273

3,269

Other long term liability304

1,713

Operating lease liabilities17,148

-

Deferred revenue269,439

88,769

Deferred cost of revenue(62,262

)

(22,878

)

Net cash provided by operating activities164,469

43,529

Cash flows from investing activities:Acquisition of property and equipment(22,133

)

(8,921

)

Purchases of short-term investments-

(5,991

)

Maturities of short-term investments-

21,000

Purchases of intangible assets(256

)

-

Net cash provided by (used in) investing activities(22,389

)

6,088

Cash flows from financing activities:Proceeds from issuance of preferred stock for warrant exercises-

147

Proceeds from issuance of common stock30,221

1,282

Net proceeds from issuance of preferred stock534,286

149,669

Net cash provided by financing activities564,507

151,098

Effect of exchange rate changes on cash and cash equivalents-

(1

)

Net increase in cash and cash equivalents706,587

200,714

Cash and cash equivalentsBeginning of year893,943

301,493

End of year$

1,600,530

$

502,207

Supplemental disclosure of cash flow information:Cash paid for interest-

-

Cash paid for income taxes-

-

Supplemental disclosure of noncash investing and financing activities:Property and equipment additions in accounts payable and accrued expenses$

9,476

$

20,988

Conversion of convertible preferred stock to common stock upon direct listing$

879,113

$

-

Use of Non-GAAP Financial measures

This press release and the accompanying tables contain the non-GAAP financial measures bookings and free cash flow.

We use this non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information may be helpful to investors because it provides consistency and comparability with past financial performance. Bookings is defined as revenue plus the change in deferred revenue during the period and other non-cash adjustments. Bookings is equal to the amount of virtual currency purchased by users in a given period of time. We believe bookings provide a timelier indication of trends in our operating results that are not necessarily reflected in our revenue as a result of the fact that we recognize the majority of revenue over the estimated average lifetime of a paying user. The change in deferred revenue constitutes the vast majority of the reconciling difference from revenue to bookings. By removing these non-cash adjustments, we are able to measure and monitor our business performance based on the timing of actual transactions with our users and the cash that is generated from these transactions. Free cash flow represents the net cash provided by operating activities less purchases of property, equipment, and intangible assets. We believe that free cash flow is a useful indicator of our unit economics and liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after the purchases of property, equipment, and intangible assets, can be used for strategic initiatives, including investing in our business, making strategic acquisitions, and strengthening our balance sheet.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial information as a tool for comparison. As a result, our non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation from, or as a substitute for financial information presented in accordance with GAAP.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(unaudited)



Three Months Ended March 31,

2021 2020

Cash flows from operating activities:Consolidated net loss $ (136,103 ) $ (74,877 )

Adjustments to reconcile net loss includingnoncontrolling interests to net cash provided by(used in) operations:Depreciation and amortization 16,620 9,085

Stock-based compensation expense 50,744 42,257

Change in fair value of warrants - 1,890

Other non-cash charges/(credits) (52 ) 302

Changes in operating assets and liabilities, netof effect of acquisitions:Accounts receivable 13,256 1,183

Accounts payable (782 ) 669

Prepaid expenses and other current assets (10,967 ) (7,301 )

Operating lease right of use assets (9,173 ) -

Other assets (3,401 ) 902

Developer exchange liability 3,425 (1,454 )

Accrued expenses and other current liabilities 16,273 3,269

Other long term liability 304 1,713

Operating lease liabilities 17,148 -

Deferred revenue 269,439 88,769

Deferred cost of revenue (62,262 ) (22,878 )

Net cash provided by operating activities 164,469 43,529

Cash flows from investing activities:Acquisition of property and equipment (22,133 ) (8,921 )

Purchases of short-term investments - (5,991 )

Maturities of short-term investments - 21,000

Purchases of intangible assets (256 ) -

Net cash provided by (used in) investing (22,389 ) 6,088 activitiesCash flows from financing activities:Proceeds from issuance of preferred stock for - 147 warrant exercisesProceeds from issuance of common stock 30,221 1,282

Net proceeds from issuance of preferred stock 534,286 149,669

Net cash provided by financing activities 564,507 151,098

Effect of exchange rate changes on cash and cash - (1 )equivalents Net increase in cash and cash equivalents 706,587 200,714

Cash and cash equivalentsBeginning of year 893,943 301,493

End of year $ 1,600,530 $ 502,207

Supplemental disclosure of cash flow information:Cash paid for interest - -

Cash paid for income taxes - -

Supplemental disclosure of noncash investing andfinancing activities:Property and equipment additions in accounts $ 9,476 $ 20,988 payable and accrued expensesConversion of convertible preferred stock to $ 879,113 $ - common stock upon direct listing Use of Non-GAAP Financial measures

This press release and the accompanying tables contain the non-GAAP financial measures bookings and free cash flow.

We use this non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information may be helpful to investors because it provides consistency and comparability with past financial performance. Bookings is defined as revenue plus the change in deferred revenue during the period and other non-cash adjustments. Bookings is equal to the amount of virtual currency purchased by users in a given period of time. We believe bookings provide a timelier indication of trends in our operating results that are not necessarily reflected in our revenue as a result of the fact that we recognize the majority of revenue over the estimated average lifetime of a paying user. The change in deferred revenue constitutes the vast majority of the reconciling difference from revenue to bookings. By removing these non-cash adjustments, we are able to measure and monitor our business performance based on the timing of actual transactions with our users and the cash that is generated from these transactions. Free cash flow represents the net cash provided by operating activities less purchases of property, equipment, and intangible assets. We believe that free cash flow is a useful indicator of our unit economics and liquidity that provides information to management and investors about the amount of cash generated from our core operations that, after the purchases of property, equipment, and intangible assets, can be used for strategic initiatives, including investing in our business, making strategic acquisitions, and strengthening our balance sheet.

Non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial information as a tool for comparison. As a result, our non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation from, or as a substitute for financial information presented in accordance with GAAP.

A reconciliation table of the most comparable GAAP financial measure to each non-GAAP financial measure used in this press release is included at the end of this release. We encourage investors and others to review our business, results of operations, and financial information in their entirety, not to rely on any single financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measure.

Three Months Ended March 31,

2021 2020

(dollars in thousands)

Bookings $ 652,277 $ 249,576

The following table presents a reconciliation of revenue, the most directly comparable financial measure calculated in accordance with GAAP, to bookings, for each of the periods presented:

Three Months Ended March 31,

2021 2020

(dollars in thousands)

Reconciliation of revenue to bookings:Revenue $ 386,976 $ 161,570

Add (deduct):Change in deferred revenue 269,439 88,769

Other (4,138 ) (763 )

Bookings $ 652,277 $ 249,576

Three Months Ended March 31,

2021

2020

(dollars in thousands)

Free cash flow$

142,080

$

34,608

The following table presents a reconciliation of net cash from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, for each of the periods presented:

Three Months Ended March 31,

2021 2020

(dollars in thousands)

Free cash flow $ 142,080 $ 34,608

The following table presents a reconciliation of net cash from operating activities, the most directly comparable financial measure calculated in accordance with GAAP, to free cash flow, for each of the periods presented:

Three Months Ended March 31,

2021 2020

(dollars in thousands)

Reconciliation of net cash from operating activitiesto free cash flow:Net cash provided by operating activities $ 164,469 $ 43,529

Add (deduct):Acquisition of property and equipment (22,133 ) (8,921 )

Purchases of intangible assets (256 ) -

Free cash flow $ 142,080 $ 34,608

About Roblox

Roblox's mission is to build a human co-experience platform that enables shared experiences among billions of users. Every day, tens of millions of people around the world have fun with friends as they explore millions of immersive digital experiences. All of these experiences are built by the Roblox community, made up of millions of creators. We believe in building a safe, civil, and diverse community-one that inspires and fosters creativity and positive relationships between people around the world. For more information, please visit corp.roblox.com.

ROBLOX and the Roblox logo are among the registered and unregistered trademarks of Roblox Corporation in the United States and other countries. (c) 2021 Roblox Corporation. All rights reserved.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210510005847/en/

CONTACT: Anna Yen Roblox Investor Relations ir@roblox.com Teresa Brewer Roblox Corporate Communications press@roblox.com