Roblox Corp. plunged by the most in nine months after reporting that people were spending less time playing its games in the second quarter and missing Wall Street’s estimates.
Roblox customers spent 14 billion hours playing games in the three months ended June 30, below the 14.4 billion that analysts had expected. The number of daily active users on the platform fell 1% from last quarter, also missing analysts’ expectations and throwing into question whether Roblox is capable of achieving its ultimate goal of reaching a billion users.
Shares slid as much as 20% in New York. They were up 33% this year through Tuesday’s close.
The company reported sales that beat analysts expectations as the online gaming giant continued to bring in new players. Bookings, which the company defines as sales plus the change in deferred revenue from online purchases, rose 1% from last quarter to $780.7 million. That was ahead of analysts’ projections of $770.6 million.
Roblox is among the most popular gaming platforms. The 17-year-old company leads in the metaverse industry, where competitors have struggled to gain traction and companies including Microsoft Corp., Tencent Holdings Ltd. and Meta Platforms Inc. are paring back efforts as hype fades from the space.
(Updates with drop in premarket shares in third paragraph.)
