RBLX 4Q25 First Take: Q4 was broadly constructive. With sentiment depressed for a while, growth fears finally eased.
1) Bookings beat: For Roblox, bookings are more forward-looking than revenue and thus more relevant; both Q4 results and Q1 guidance topped expectations. Given management's typically conservative guide, actuals may come in stronger, which is a notable boost to sentiment.
2) Healthy user ecosystem: DAU and engagement hours maintained high growth in Q4, slightly ahead of estimates. All four regions saw double-digit growth in daily time spent vs. last year.
Total hours declined QoQ by a bit more than seasonal, but summer 2025 set a high watermark with multiple blockbusters clustering, making the cooldown look sharper than third-party trackers suggest. Previously, as top titles normalized, third-party data showed a steep QoQ drop vs. Q3 in platform activity.3) Monetization deepening: Strong bookings were driven by Robux purchases and the ad business launched last year. Ads will dilute ARPDAU near term, so bookings per user fell YoY.
That said, it reduces reliance on pure user spend; monthly payers are increasing, further improving the platform's economic flywheel.4) Higher developer payout: The developer payout rate rose again in Q4; since Sep last year, Roblox lifted developer revenue share by 8.5%, raising post-transaction Robux earnings from 35% to 38%. Dolphin Research has long argued that sharing more with developers helps scale the ecosystem.
Covenant adj. EBITDA was $690 mn, beating consensus by $100 mn, at 31% of bookings, up QoQ and YoY. $Roblox(RBLX.US) $T-Rex 2X Long RBLX Daily Target ETF(RBLU.US)
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