What happened
On Tuesday, video game platform Roblox (RBLX -3.66%) published its key performance metrics for the month of December, and the numbers looked surprisingly good. That's why Roblox stock was up 12% as of 11 a.m. ET.
So what
Roblox is unusual in that it releases key metrics every month, in contrast to the more common corporate practice of releasing data once per quarter. For December, management said that daily active users (DAU) were up 18% year over year, hours engaged on the platform were up 21%, and estimated bookings were up by 17% to 20%.
To emphasize these results, Roblox had 61.5 million DAUs in December, up 8% just since November. This was also a record number for Roblox.
Most importantly -- and probably what the market was most excited about -- Roblox returned to strong bookings growth. For clarity, video games within the Roblox platform use in-game currency. When users buy that in-game currency, it results in bookings. Spending the in-game currency results in revenue.
According to Tuesday's release, revenue could be down by 1% to 6% year over year for Roblox in December. However, its strong bookings growth suggests that better revenue growth is coming.
Now what
Bookings growth is encouraging. For perspective, Roblox's bookings were only up 10% year over year in 2022's third quarter. However, I'd recommend that investors avoid getting overexcited here. Roblox historically has experienced strong seasonality in bookings around the holiday season as kids receive gift cards of in-game currency to be used on the platform. Therefore, a strong December is what one would expect from this company.
That said, Roblox's December numbers do indicate that its platform is still gaining and retaining users, which is important and worth celebrating.
