Business Wire | Aug 16, 2021 04:04PM EDT

Roblox Reports Second Quarter 2021 Financial Results

Aug. 16, 2021

SAN MATEO, Calif.--(BUSINESS WIRE)--Aug. 16, 2021--Roblox Corporation (NYSE: RBLX), a global platform bringing millions of people together through shared experiences, released its second 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.

Second Quarter 2021 Financial Highlights

* Revenue increased 127% over Q2 2020 to $454.1 million * Net Loss for Q2 2021 was $140.1 million * Net cash provided by operating activities increased 64% over Q2 2020 to $191.2 million * Bookings increased 35% over Q2 2020 to $665.5 million * Free Cash Flow increased more than 70% over Q2 2020 to $168.0 million * Average Daily Active Users (DAUs) were 43.2 million, an increase of 29% year over year driven by: 42% growth in DAUs outside of the US/Canada compared to Q2 2020 46% growth in DAUs over the age of 13 compared to Q2 2020 * Hours Engaged were 9.7 billion, an increase of 13% year over year primarily driven by: 27% growth in engagement in markets outside of the US/Canada compared to Q2 2020 29% growth from users over the age of 13 compared to Q2 2020 * Average Bookings per DAU (ABPDAU) was $15.41, a slight increase year over year

July 2021 Key Metric Estimates

* Daily active users were 46.6 million, up 28% from July of last year, up 8% compared to 43.3 million in June 2021 * Hours engaged were 3.8 billion, up 22% year over year and up 16% compared to 3.3 billion in June 2021 * Bookings were between $221 million and $224 million, up 19% - 21% year over year and up sequentially 10% - 11% from June 2021 when bookings were $201.7 million * Average bookings per DAU were between $4.75 - $4.81, down 5% - 7% year over year and up 2% - 3% sequentially from June 2021 * Revenue was between $161 million - $163 million, up 111% - 113% year over year and 2% - 4% sequentially from June 2021

"Our continued growth demonstrates the importance of our mission and the power of our platform," said David Baszucki, Chief Executive Officer of Roblox. "These results are fueled both by our creator ecosystem and by the millions of people around the globe who want to connect and share new experiences every day on Roblox."

"In the quarter ending June 30, 2021, cash from operations and free cash flow continued at record levels. The third quarter is off to a strong start with our highest levels of users and engagement to date," said Michael Guthrie, Chief Financial Officer of Roblox. "We will continue to invest in our developer community, hire top engineering talent, and build out the infrastructure required to scale Roblox globally."

Earnings Q&A Session

Roblox will host a live Q&A session to answer questions regarding their second quarter 2021 results on Tuesday, August 17, 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 international growth and ability to reach an older audience, investment strategy, and business strategy and growth 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," "continued," "project," "plan," "goals," "opportunity," "appeal," "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 Quarterly Report on Form 10-Q filed for the fiscal quarter ended March 31, 2021 and other filings and reports we make with the SEC from time to time. 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 on our business of the COVID 19 pandemic restrictions and the easing of those restrictions as vaccinations become more prevalent; 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 the reports we have filed or will file with the SEC, including our Quarterly Report Form 10-Q for the fiscal quarter ended March 31, 2021.

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.

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.

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.

ROBLOX CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(in thousands, except par values)(unaudited) As of June 30, December 31,

2021 2020

AssetsCurrent assets:Cash and cash equivalents $ 1,780,262 $ 893,943

Accounts receivable-net of allowances 217,010 246,986

Prepaid expenses and other current assets 45,432 26,274

Deferred cost of revenue, current portion 351,573 256,928

Total current assets 2,394,277 1,424,131

Property and equipment-net 218,581 206,415

Operating lease right-of-use assets 228,232 -

Deferred cost of revenue, long term 127,011 113,793

Intangible assets, net 38,079 42,326

Goodwill 59,568 59,568

Other assets 8,043 1,567

Total assets $ 3,073,791 $ 1,847,800

Liabilities, Convertible Preferred Stock, andStockholders' Equity (Deficit)Current liabilities:Accounts payable $ 11,112 $ 12,012

Accrued expenses and other current liabilities 182,084 65,392

Developer exchange liability 90,615 80,912

Deferred revenue-current portion 1,488,200 1,070,230

Total current liabilities 1,772,011 1,228,546

Deferred revenue-net of current portion 551,665 484,699

Operating lease liabilities 206,376 -

Other long term liabilities 1,700 22,109

Total liabilities 2,531,752 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 June 30, 2021,and December 31, 2020, respectively; zero and - 344,827 337,235 shares issued and outstanding as of June30, 2021, and December 31, 2020, respectively;aggregate liquidation preference of zero and$335,654 as of June 30, 2021, and December 31,2020, respectivelyStockholders' Equity (Deficit)Preferred stock; $0.0001 par value per share;100,000 and zero shares authorized as of June 30, - - 2021 and December 31, 2020, respectively; zeroshares issued and outstanding as of June 30, 2021and December 31, 2020, respectivelyCommon stock, $0.0001 par value; 5,000,000 and740,000 authorized as of June 30, 2021, andDecember 31, 2020, respectively, 574,595 and201,327 shares issued and outstanding as of June30, 2021, and December 31, 2020, respectively;Class A common stock-4,935,000 and 675,000 sharesauthorized as of June 30, 2021, and December 31, 57 20 2020, respectively; 521,008 and 144,039 sharesissued and outstanding as of June 30, 2021, andDecember 31, 2020, respectively; Class B commonstock-65,000 shares authorized as of June 30,2021, and December 31, 2020, respectively, 53,587and 57,287 shares issued and outstanding as ofJune 30, 2021, and December 31, 2020,respectivelyAdditional paid-in capital 1,293,160 239,792

Accumulated other comprehensive income 114 90

Accumulated deficit (766,641 ) (492,290 )

Total Roblox Corporation stockholders' equity 526,690 (252,388 )(deficit)Noncontrolling interests 15,349 20,007

Total stockholders' equity (deficit) 542,039 (232,381 )

Total liabilities, convertible preferred stock, $ 3,073,791 $ 1,847,800 and stockholders' equity (deficit)ROBLOX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)(unaudited)Three Months Ended June 30,Six Months Ended June 30,2021

2020

2021

2020

Revenue$

454,100

$

200,392

$

841,076

$

361,962

Cost and expenses:Cost of revenue(1)116,930

53,669

214,867

95,462

Developer exchange fees129,714

85,052

248,652

129,551

Infrastructure and trust & safety108,986

61,853

203,122

114,473

Research and development124,748

40,249

221,392

89,658

General and administrative97,678

18,707

192,053

49,265

Sales and marketing18,990

13,908

38,992

29,565

Total cost and expenses597,046

273,438

1,119,078

507,974

Loss from operations(142,946

)

(73,046

)

(278,002

)

(146,012

)

Interest income26

294

31

1,541

Other income/(expense), net10

494

(1,040

)

(2,663

)

Loss before provision for income taxes(142,910

)

(72,258

)

(279,011

)

(147,134

)

Provision for income taxes20

5

22

6

Consolidated net loss(142,930

)

(72,263

)

(279,033

)

(147,140

)

Net loss attributable to the noncontrolling interest(2,796

)

(742

)

(4,682

)

(1,240

)

Net loss attributable to common stockholders$

(140,134

)

$

(71,521

)

$

(274,351

)

$

(145,900

)

Net loss per share attributable to common stockholders, basic and diluted$

(0.25

)

$

(0.40

)

$

(0.63

)

$

(0.83

)

Weighted-average shares used in computing net loss per share attributable to commonstockholders - basic and diluted571,300

180,336

432,159

174,939

(1) Depreciation of servers and infrastructure equipment included in infrastructure and trust & safety. ROBLOX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(in thousands, except per share amounts)(unaudited) Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020

Revenue $ 454,100 $ 200,392 $ 841,076 $ 361,962

Cost and expenses:Cost of revenue^(1) 116,930 53,669 214,867 95,462

Developer exchange fees 129,714 85,052 248,652 129,551

Infrastructure and 108,986 61,853 203,122 114,473 trust & safetyResearch and 124,748 40,249 221,392 89,658 developmentGeneral and 97,678 18,707 192,053 49,265 administrativeSales and marketing 18,990 13,908 38,992 29,565

Total cost and expenses 597,046 273,438 1,119,078 507,974

Loss from operations (142,946 ) (73,046 ) (278,002 ) (146,012 )

Interest income 26 294 31 1,541

Other income/(expense), 10 494 (1,040 ) (2,663 )netLoss before provision (142,910 ) (72,258 ) (279,011 ) (147,134 )for income taxesProvision for income 20 5 22 6 taxesConsolidated net loss (142,930 ) (72,263 ) (279,033 ) (147,140 )

Net loss attributable (2,796 ) (742 ) (4,682 ) (1,240 )to the noncontrollinginterestNet loss attributable $ (140,134 ) $ (71,521 ) $ (274,351 ) $ (145,900 )to common stockholdersNet loss per shareattributable to common $ (0.25 ) $ (0.40 ) $ (0.63 ) $ (0.83 )stockholders, basic anddilutedWeighted-average sharesused in computing netloss per share 571,300 180,336 432,159 174,939 attributable to commonstockholders - basicand diluted (1) Depreciation of servers and infrastructure equipment included in infrastructure and trust &safety.ROBLOX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited)Six Months Ended June 30,2021

2020

Cash flows from operating activities:Consolidated net loss$

(279,033

)

$

(147,140

)

Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operations:Depreciation and amortization34,410

18,852

Stock-based compensation expense132,403

49,666

Change in fair value of warrants-

1,890

Operating lease non-cash expense20,544

-

Other non-cash charges/(credits)

16

1,721

Changes in operating assets and liabilities:Accounts receivable29,960

(84,119

)

Accounts payable2,313

(988

)

Prepaid expenses and other current assets(27,264

)

(6,835

)

Other assets(6,476

)

1,392

Developer exchange liability9,703

25,155

Accrued expenses and other current liabilities74,129

9,834

Other long term liability584

1,836

Operating lease liabilities(12,642

)

-

Deferred revenue484,936

384,303

Deferred cost of revenue(107,863

)

(95,442

)

Net cash provided by operating activities355,720

160,125

Cash flows from investing activities:Acquisition of property and equipment(45,368

)

(26,249

)

Purchases of short-term investments-

(5,991

)

Maturities of short-term investments-

36,000

Purchases of intangible assets(256

)

(579

)

Net cash provided by (used in) investing activities(45,624

)

3,181

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

147

Proceeds from issuance of common stock41,889

5,996

Net proceeds from issuance of preferred stock534,286

149,669

Net cash provided by financing activities576,175

155,812

Effect of exchange rate changes on cash and cash equivalents48

(3

)

Net increase in cash and cash equivalents886,319

319,115

Cash and cash equivalentsBeginning of year893,943

301,493

End of year$

1,780,262

$

620,608

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$

10,820

$

16,343

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

879,113

$

-

ROBLOX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands)(unaudited) Six Months Ended June 30, 2021 2020

Cash flows from operating activities:Consolidated net loss $ (279,033 ) $ (147,140 )

Adjustments to reconcile net loss includingnoncontrolling interests to net cash provided byoperations:Depreciation and amortization 34,410 18,852

Stock-based compensation expense 132,403 49,666

Change in fair value of warrants - 1,890

Operating lease non-cash expense 20,544 -

Other non-cash charges/(credits) 16 1,721

Changes in operating assets and liabilities:Accounts receivable 29,960 (84,119 )

Accounts payable 2,313 (988 )

Prepaid expenses and other current assets (27,264 ) (6,835 )

Other assets (6,476 ) 1,392

Developer exchange liability 9,703 25,155

Accrued expenses and other current liabilities 74,129 9,834

Other long term liability 584 1,836

Operating lease liabilities (12,642 ) -

Deferred revenue 484,936 384,303

Deferred cost of revenue (107,863 ) (95,442 )

Net cash provided by operating activities 355,720 160,125

Cash flows from investing activities:Acquisition of property and equipment (45,368 ) (26,249 )

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

Maturities of short-term investments - 36,000

Purchases of intangible assets (256 ) (579 )

Net cash provided by (used in) investing (45,624 ) 3,181 activitiesCash flows from financing activities:Proceeds from issuance of preferred stock for - 147 warrant exercisesProceeds from issuance of common stock 41,889 5,996

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

Net cash provided by financing activities 576,175 155,812

Effect of exchange rate changes on cash and cash 48 (3 )equivalents Net increase in cash and cash equivalents 886,319 319,115

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

End of year $ 1,780,262 $ 620,608

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 $ 10,820 $ 16,343 payable and accrued expensesConversion of convertible preferred stock to $ 879,113 $ - common stock upon direct listingThree Months Ended June 30,Six Months Ended June 30,2021

2020

2021

2020

(dollars in thousands)(dollars in thousands)Bookings$

665,480

$

494,171

$

1,317,757

$

743,747

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 June 30,Six Months Ended June 30,2021

2020

2021

2020

(dollars in thousands)(dollars in thousands)Reconciliation of revenue to bookings:Revenue$

454,100

$

200,392

$

841,076

$

361,962

Add (deduct):Change in deferred revenue215,497

295,534

484,936

384,303

Other(4,117

)

(1,755

)

(8,255

)

(2,518

)

Bookings$

665,480

$

494,171

$

1,317,757

$

743,747

Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020

(dollars in thousands) (dollars in thousands)Bookings $ 665,480 $ 494,171 $ 1,317,757 $ 743,747

The following table presents a reconciliation of revenue, the mostdirectly comparable financial measure calculated in accordance with GAAP, to bookings, for each of the periods presented: Three Months Ended June Six Months Ended June 30, 30, 2021 2020 2021 2020

(dollars in thousands) (dollars in thousands)Reconciliationof revenue tobookings:Revenue $ 454,100 $ 200,392 $ 841,076 $ 361,962

Add (deduct):Change in 215,497 295,534 484,936 384,303 deferred revenueOther (4,117 ) (1,755 ) (8,255 ) (2,518 )

Bookings $ 665,480 $ 494,171 $ 1,317,757 $ 743,747

Six Months Ended June 30,2021

2020

(dollars in thousands)Free cash flow$

310,096

$

133,297

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:Six Months Ended June 30,2021

2020

(dollars in thousands)Reconciliation of net cash from operating activities to free cash flow:Net cash provided by operating activities$

355,720

$

160,125

Add (deduct):Acquisition of property and equipment(45,368

)

(26,249

)

Purchases of intangible assets(256

)

(579

)

Free cash flow$

310,096

$

133,297

Acquisition of property and equipment primarily includes servers, infrastructure equipment and tenant improvements. View source version on businesswire.com: https://www.businesswire.com/news/home/20210816005113/en/

CONTACT: Anna Yen Roblox Investor Relations ir@roblox.com

CONTACT: Stefanie Notaney Roblox Corporate Communications press@roblox.com