What happened
Shares of Roblox (RBLX 0.29%) soared on Monday after the popular video game development company reported encouraging growth metrics for September. As of 1:35 p.m. ET, Roblox's stock price was up more than 22%.
So what
Roblox's daily active users (DAUs) jumped 23% year over year to 57.8 million. Importantly, users also increased their level of interaction with the immersive digital entertainment platform. Hours engaged rose 16% to 4 billion.
"We are driving record levels of users and engagement globally as we execute on our innovation roadmap and broaden the appeal of Roblox across geographies and age groups," CEO David Baszucki said in the company's second-quarter earnings release in August. "We continue to make progress on key operational and product initiatives to enhance the long-term value of the Roblox platform."
Those growth initiatives appear to be bearing fruit. Roblox estimates that its bookings -- a key metric that essentially represents the amount of virtual currency users purchased during the period -- increased 11% to 15% year over year to between $212 million and $219 million. Excluding foreign currency fluctuations, management estimates that booking growth would have been as high as 21%.
Now what
Roblox's user base and bookings soared during the early stages of the pandemic, when parents sought out safer, indoor activities for their children. But as coronavirus-related restrictions were eased and kids resumed their traditional outdoor activities, Roblox's growth slowed. Its stock, in turn, has shed much of its pandemic-fueled gains.
Yet recent trends suggest Roblox could be returning to a steeper growth trajectory, much to the relief of its shareholders. And that could portend further stock price gains ahead.
