Roblox (RBLX -0.91%) reported fourth-quarter 2021 results after the market close on Tuesday, Feb. 15, that disappointed investors. Shares of the video-gaming platform operator dropped 15.3% in Tuesday's after-hours trading session.
The market's initial reaction is in part attributable to the quarter's bottom line significantly missing the Wall Street consensus estimate. Investors were probably also not pleased with the January 2022 key metric estimates the company provided. They reflect a slower start to the first quarter of this year than many investors were likely expecting.
Investors will know more after the analyst conference call, which was scheduled for today at 8:30 a.m. ET.
Here's an overview of Roblox's fourth quarter.
1. Revenue surged 83%
Fourth-quarter revenue surged 83% year over year to $568.8 million. That's a slowdown from last quarter, when revenue soared 102% year over year to $509.3 million.
While year-over-year revenue growth is slowing, it is still strong. The company had a challenging comparable, as many people were still staying home much more than usual in the year-ago period. COVID-19 vaccines only started rolling out at the very tail end of the fourth quarter of 2020.
2. Bookings rose 20%
The quarter's revenue bookings increased 20% year over year to $770.1 million. This result was roughly in line with expectations. (The consensus estimate for this metric varied by source. A couple of the estimates were a bit lower than the company's result, while one was a little higher.)
Last quarter, bookings grew 28% to $637.8 million.
3. Average daily active users jumped 33%
The quarter's average daily active users (DAUs) were 49.5 million, up 33% year over year. Total hours engaged were 10.8 billion, up 28% year over year.
Average bookings per DAU were $15.57. That's higher than last quarter's $13.49.
For additional context, in the third quarter, DAUs rose 31% to 47.3 million, and hours engaged grew 28% to 11.2 billion.
4. Loss per share narrowed 17%
Fourth-quarter net loss widened 144% year over year to $143.3 million, which translated to net loss per share narrowing 17% to $0.25. (These numbers reflect the big increase in the number of shares outstanding following Roblox going public in March 2021.) This result fell considerably short of the net loss per share of $0.13 that Wall Street had projected.
5. Operating cash flow fell 32%
In the quarter, operating cash flow declined 32% year over year to $122.2 million. Free cash flow was $77.3 million, down 35% from the year-ago period.
6. January 2022 bookings are expected to edge up 2% to 3%
For January 2022, the company provided the following key metric estimates:
- Revenue was in the range of $203 million to $206 million, up 64% to 66% year over year.
- DAUs were 54.7 million, up 32% from January 2021.
- Hours engaged were 4.2 billion, up 26% year over year.
- Bookings were $220 million to $223 million, up 2% to 3% year over year.
- Average bookings per DAU (ARPDAU) were $4.02 to $4.08, down 22% to 23% year over year.
Investors were probably disappointed with the bookings and ARPDAU estimates. The latter metric reflects a solid decline in the monetization of users compared to January 2021.
In short, Roblox's fourth-quarter bottom line was weaker than many investors probably expected. Several of its January 2022 key metric estimates were also likely lighter than investors had anticipated. On the positive side, the company is still pumping out robust cash flows.
Moreover, it's very early in Roblox's journey as a publicly-traded entity and as a player in the burgeoning metaverse.