Shares in Roblox Corporation (NYSE: RBLX) plunged 22% on Wednesday after the online gaming platform reported Q2 earnings that fell short of analysts’ expectations.
Roblox posted a loss of 46 cents per share, a significant increase from the 30 cents reported in the previous year (2022). This loss exceeded the dire estimates of market experts, who had foreseen a drop of only 45 cents.
Furthermore, Bookings, which the company defines as revenue, deferred revenue changes, and other non-cash adjustments, managed to climb by 22%, reaching $780.7 million. However, this figure still missed estimates. The average bookings per daily active user also declined 3% to $11.92.
The Roblox management attributed this grim performance to the considerable rise in operational costs required to fuel its ongoing expansion. Specifically, the company pointed fingers at mounting expenses related to developer exchange fees, personnel, infrastructure, trust and safety, and corporate overhead.
Roblox Corporation revealed its bleak outlook, stating that it expects to continue incurring losses for the foreseeable future. This grim news led to an immediate and severe market reaction, causing Roblox (RBLX) shares to plummet to their lowest point since January.
