What is Roblox?
Roblox is a well-known virtual platform as well as a storefront that users can go to play games. According to verge.com more than half of the children under the age of 16 in the United States have played Roblox. However,, Roblox contrary to popular belief does not fall under the category of a game. Rather, it acts as a platform that allows users to create games in addition to playing games created by other users. According to the official website, Roblox has published more than 20 million user-created games on its platform.
Earnings growth over the recent past
An important facet unbeknownst to many comes from the fact that despite Roblox’s massive popularity, the company has been facing a series of losses from its inception. However, in 2021 the cooperation did see a 28% year over year increase in bookings (users purchasing Robux virtual currency for in-game purchases). They also saw a whopping 102% increase in quarterly revenue to $509.3 million with stocks rising by 42% in a single day.
The corporation also possesses a market cap of $33.03 billion. However, unfortunately for Roblox, the year-to-date return for 2021 amounted to -31.43%. This may be due to the fact Roblox still suffers a $0.13 loss per share.
Roblox, however, saw a whopping increase in users with a staggering 31% increase in daily active users. This totals to approximately 190 million average monthly users in 2021.
| METRIC | FY 2019 | FY 2020 | Q1 2021 |
| Revenue | $508.4 million | $923.9 million | $387.0 million |
| Growth (YOY) | 56% | 82% | 140% |
Profitability – when can we expect Roblox to make money?
However, the future of Roblox seems to be looking ambiguous at best. Analysts predict that Roblox may see a rise in revenue of up to 186% reaching $2.65 billion for the year. In the financial year of 2022, Roblox however, is expected to see a rise of only 19% in revenue to $3.14 billion.
Additionally, Roblox faces increasing net losses with rising cloud infrastructure costs. However, WallStreet predicts that the company may finally see profits this year as the losses eventually narrow. This may allow the corporation to grow its earnings by 3% during the financial year of 2022.
So to sum up, no. It won’t be profitable any time soon. But as soon as we see those infrastructure costs dip, they will be touching profitability. If you are a trader, that’s what you should watch!
