Roblox rebounds after Q1 report, analysts highlight potential for second half improvement.
"Monetization should follow user growth and engagement, so we'll be looking for any commentary to instill confidence in the potential return to growth in the coming months," Parker wrote in a note to clients.
Roblox (RBLX) shares were up nearly 1% to $23.40 in premarket trading on Wednesday after having dipped on Tuesday.
In addition, Parker noted that some of the commentary in the Roblox (RBLX) shareholder letter was "interesting," particularly around monetization opportunities including discovery and its vast user-generated catalog. It's possible that advertising may also improve monetization, but that's viewed as a "medium-term opportunity" rather than something that will help this year.
In its quarterly report, Roblox (RBLX) said bookings fell by 3% to $631.2 million, while revenue rose 39% year-over-year to $537.1 million.
Amid higher expenses, operating loss swelled to $151.6 million from a prior-year $135.1 million, and attributable net loss widened to $160.2 million from $134.2 million.
Average daily active users rose 28% to a record 54.1 million, while hours engaged climbed 22% to a record 11.8 billion.
April metrics released by the company show bookings were down 8-10% to $221 million-$224 million, while daily active users rose 23% to 53.1 million. The company said hours engaged rose 18%, to 3.8 billion and average bookings per DAU fell 25-26% to $4.16-$4.22.
Deutsche Bank analyst Benjamin Black said the quarter was not "all fun and games," noting that Roblox's (RBLX) adjusted EBITDA of roughly $68 million missed Wall Street estimates by more than 30%, due in large part to "greater-than-expected developer expenses, headcount, and infrastructure costs including trust & safety spend."
However, Parker noted that with the "near-term focus of the market," Roblox (RBLX) needs to return to growth to get "sentiment in the right direction," though April's metrics "don't yet inspire confidence."