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From “Disruption In The Other Direction” (February 2026):
“Despite outperforming any reasonable expectations from five years ago on DAU growth, bookings growth, etc., Roblox generated >$4 billion of FY22 – FY25 cumulative net losses. I think Roblox would benefit from a clearer long-term financial road map, i.e. an update to the framework outlined at the 2023 Investor Day. Not only would it help investors to bridge the divide between today’s impressive platform KPIs and long-term profitability, which would likely dampen its stock price volatility, but it would also set some guardrails for management to ensure priorities remain appropriately balanced. (Note that Netflix started providing a margin framework for streaming in 2013.)”
In Q4 FY19, Roblox had ~19 million global DAUs, with total TTM engagement on the platform of ~13.7 billion hours. What happened at Roblox over the ensuing six years (through YE FY25) was nothing short of phenomenal.
First, the company was a major beneficiary of the pandemic, with DAUs and platform hours more than tripling over the next three years (FY20 – FY22), to ~59 million and ~49.3 billion, respectively. What happened in the subsequent three years (FY23 – FY25) was even more impressive: another leg of huge growth after digesting that much enlarged base of users and hours. By YE FY25, Roblox had ~144 million DAUs with ~123.9 billion hours of TTM engagement. The following graphic, from Matt Ball’s “The State of Video Gaming in 2026”, contextualizes this expansion within the broader gaming industry. To put this data into words, Roblox took substantial engagement share (hours played) in gaming over the past 5-10 years, such that its engagement is greater than Fortnite, PlayStation, and Steam combined.
The latest move higher for global DAUs has made the pandemic-fueled growth of 2020 look rather pedestrian. As you can see below, Roblox added ~59 million net DAU’s in 2025 (TTM Q4 FY25), which is nearly 4x greater than the ~18 million net DAU’s that the platform added throughout 2020.
While the company is embarking on a period of tougher results, which I’ll discuss in more detail below, I think the above data lends support to the following comment from CEO Dave Baszucki: “We believe that we are navigating a period of normalization following a year of massive growth.”
In the near term, the financial KPI that best captures this normalization is YoY bookings. The company’s Q2 FY26 results disappointed, and now they expect a mid-teens YoY decline in bookings in Q3 FY26; as depicted below, this is pressure on bookings growth that they haven’t experienced before.
The stock, which traded above $140 per share in September 2025, closed on Wednesday at ~$39 per share - their second ~75%+ stock price decline in five years as a public company. As I’ve noted at various times since the April 2022 Roblox initiation, I think management’s inability and / or unwillingness to adopt a clearer set of long-term financial objectives for investors has invited outsized stock price volatility… which is something management should not be indifferent to given heavy reliance of SBC to compensate employees.