Roblox Corporation Q4 FY2025 earnings call

• Q4 2025 revenue $1.4B (+43% Y/Y), bookings $2.2B (+63% Y/Y). - Saw viral hits like Steel of Brain Rot with 25.4M concurrents, 45M concurrents on Roblox overall. - Strong engagement across regions, DAUs up 69% Y/Y, engagement hours 35B (+88% Y/Y). - Safety initiatives: facial age estimation global rollout completed in Jan 2026, age verification for communication access in multiple markets with 60% DAUs age-checked in some markets. - AI advancements: 4D generation, internal world model, AI-driven discovery, safety models like Sentinel and Guard. - Technical innovations: cloud rollout of native streaming, Slim for dynamic asset compositing, native server and custom matchmaking for creators. - Avatar system expansion planned, and expansion of experiences beyond traditional gaming.

In 2025, Roblox significantly exceeded guidance with revenue growing 36% and bookings 55% year-on-year. Q4 2025 revenue was $1.4 billion, up 43% year-on-year, and bookings were $2.2 billion, up 63% year-on-year. Regions saw strong growth: US and Canada up 41%, APAC up 96% (Japan 160%, India 110%, Indonesia over 700%). DAUs in Q4 grew 69% year-on-year, engagement hours were 35 billion hours, up 88% year-on-year. Quarterly monthly unique payers were nearly 37 million. DevEx in Q4 was $477 million, up 70% year-on-year, and creators earned over $1.5 billion in 2025.

2026 bookings growth expected 22%-26%. Margins: at high end of bookings guidance, margins relatively flat Y/Y; at low end, slight Y/Y decline due to DevEx rate increase and investments in users, engagement, AI workloads. Free cash flow expected to grow 26% Y/Y at midpoint of guidance range, with increased CapEx for GPUs and memory. Moving to guide one quarter at a time starting in 2027.

Difficulty in predicting exact business performance twelve months out, as seen with unforeseen viral hits in 2025. Market competition and dependence on viral hits for growth.

Q: Could you talk about elements informing bookings outlook and visibility into content schedules?

A: Dave mentioned internal leading indicators like content diversity, distribution, velocity; Naveen added content dynamic health and user quality.

Q: Elaborate on 18+ opportunity and AI gaming?

A: Dave talked about AI use in upsampling, NPC training, world models; Naveen highlighted AI as accelerant for growth beyond gaming.

Q: Lessons from discovery evolution and strategic priorities?

A: David said discovery is hard, focused on long-term user and platform health, seeing more good content reach users.

Q: Gross margin improvement and direct payment initiative?

A: Naveen said COGS tailwind and better bookings performance helped; David talked about AI as opportunity for expansion.

Q: Dilution and stock-based comp?

A: David and Naveen said they model long-term, focus on operating results.

Q: Advertising ambitions and age verification rollout?

A: Naveen said advertising growth expected but modest; David said age verification rollout went well with optimizations.

Q: China presence and aging users?

A: David said great opportunity with Tencent, bullish on 8+ opportunity with age check benefits.

Q: Age check impact on behavior and engagement?

A: David said age matching improves matchmaking, seen as long-term growth aspect.

Q: Q1 bookings guide and specific challenges?

A: Naveen said no big viral hit, platform healthy, excited about early 2026 trends.