---
title: "RBLX (Trans): User churn, but retention stable; Q3 rebound expected"
type: "Topics"
locale: "en"
url: "https://longbridge.com/en/topics/40347657.md"
description: "Below is Dolphin Research's summary of the $Roblox(RBLX.US) 1Q26 earnings call; for our earnings take, see 'Roblox: Regulation Hit at the End of the Product Cycle, Disrupting Growth Cadence'. I. Key takeaways — 1) Guidance was cut materially, with full-year revenue growth lowered from ~26% to 20%–25% and full-year bookings to 8%–12%. Management expects DAU to decline QoQ in Q2, with QoQ growth resuming in Q3..."
datetime: "2026-05-01T07:06:55.000Z"
locales:
  - [en](https://longbridge.com/en/topics/40347657.md)
  - [zh-CN](https://longbridge.com/zh-CN/topics/40347657.md)
  - [zh-HK](https://longbridge.com/zh-HK/topics/40347657.md)
author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)"
---

# RBLX (Trans): User churn, but retention stable; Q3 rebound expected

**Dolphin Research recap of**$Roblox(RBLX.US) **1Q26 earnings call. For the earnings take, see '**[**Roblox: Product cycle nearing end meets regulation hit, growth cadence disrupted**](https://longbridge.cn/topics/40346860?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=e01fc38e-bf5b-4d7a-8c50-97dcb306e93d)**'.**

**I. Key takeaways**

1\. **Guide cut materially**: FY revenue growth trimmed from ~26% to 20%–25%; FY bookings growth now 8%–12%. Q2 DAU expected to decline QoQ, with QoQ growth resuming in Q3. 2. **DevEx rate raised**: effective Jun 8, 2026, for age-verified 18+ users in the U.S., creators' take-rate on in-experience spend rises from 26.6% to 37.8%, limited to Novel Games that use the R15 Avatar framework. 3. **Margins under pressure**: lower bookings drive fixed-cost deleveraging; roughly one-quarter of the OPM delta vs. prior guide stems from incremental AI investment and the 18+ DevEx uplift. Mgmt expects operating leverage to offset these over time. 4. **Strong Q1 cash flow**: operating cash flow $629 mn (+42% YoY), FCF $596 mn (+40% YoY). CapEx outlook unchanged, with Roblox Reality inference costs to be covered via user fees. 5. **Monthly Unique Payers surged**: MUP reached 31 mn (+52% YoY). Intl payer growth was strong, while U.S. & Canada payers rose 19% YoY off a larger base.

**II. Call details**

**2.1 Prepared remarks**

**1) Users and engagement**

1\. DAUs reached 132 mn (+35% YoY), below the prior ~70% pace; U.S. & Canada DAU +17% YoY, ex-NA +40% YoY. Japan DAU +96%, India +84%. 2. Hours Engaged was 31 bn (+43% YoY); ex-NA +50% YoY, Japan +101%, India +91%. U.S. & Canada +21%. 3. 18+ users account for 26% of age-verified DAU; in the U.S., DAU and hours for the 18–34 cohort grew over 50% YoY, outpacing all other age groups. U.S. 18+ monetization is ~1.5x under-18.

**2) Age verification, safety & compliance**

1\. In Jan, Roblox launched chat-gated age verification globally, becoming the first major online gaming platform to age-verify chat access worldwide, and has prohibited adults from communicating with users under 16 (even with best-in-class text filtering). 2. By end-Q1, 51% of global DAU had completed age verification; 65% in the U.S., 70% in Australia (an earlier rollout). The long-term goal is 90%+ verification coverage, which would significantly improve native communications. 3\. Verification introduces short-term friction: chat participation fell (unverified users cannot chat, and verified users have fewer chat counterparties). Discovery also skewed too hard toward monetization, depressing App Store ratings and thus organic sign-ups. 4. A global rollout of age-based accounts is planned for Jun, using verification to segment accounts; Kids Accounts has gone live in the core app. Mgmt views these as key elements of its safety moat.

**3) Comms roadmap**

1\. **Global Chat** (in experiments): lets players on different servers of the same experience talk in a shared room, boosting chat density even if some users are not yet verified. 2. **Preset Messages**: supports coordination-style comms for all ages, planned for near-term release. 3. **Native Party Chat**: integrates friend coordination directly into in-experience chat, removing the need to exit. Voice and Avatar video will later open to trusted friends (age-gated with parental consent), timing TBD, and is the third priority on the comms roadmap.

**4) Discovery optimization**

1\. Last year, Roblox improved long-tail discovery and content diversity (top-10 ex. experiences saw engagement +43% and spend +41%, contributing 65% of spend growth). 2. Discovery weights are shifting from near-term monetization toward 28-day and longer retention to drive 18+ growth, even if near-term monetization weights tick down. Mgmt believes creators welcome this as they want fair rewards for high-quality, durable content.

**5) AI toolchain and creator ecosystem**

1\. About half of the top 1,000 creators already use Roblox Assistant or MCP (Model Context Protocol) to compress development cycles; creators also integrate third-party tools such as Claude Code, Cursor, and Codex. 2. In Apr 2026, Roblox Studio entered the Agentic phase: creators can converse with Assistant on design, implementation, and testing, with Assistant orchestrating multiple Building Agents to deliver features with minimal creator intervention. 3. Added 3D mesh and procedural model generation, and introduced an NPC testing agent that navigates complex 3D spaces and performs actions as a testing tool. These help small teams ship high-quality content faster. 4. The platform runs 400+ models executing 1.5 mn+ inferences per second across discovery, comms safety, marketplace recommendations, and 3D generation. Internally, Roblox is investing in four proprietary models: 4D generation, NPC behavior, a Video Super Upsampler, and code assist/generation.

**6) Roblox Reality**

1\. Roblox's most ambitious tech initiative: unifying massive-scale multiplayer simulation, Roblox Cloud engine, photorealistic rendering, and persistent world state into a hybrid architecture (patent pending), built on a global edge cloud and infra. 2. The goal is the first easy-to-use, photorealistic multiplayer platform, democratizing creation. Real-time 2K 60Hz photoreal video remains at the cutting edge, and mgmt says the project is 'approaching readiness.' 3. The technology will be monetized via subscription or usage-based fees, with inference costs covered by user fees; training will use both owned data centers and public cloud. CapEx guidance is unchanged this year.

**7) Novel Games and 18+ strategy**

1\. The 18+ segment represents ~80% of the global games market, where Roblox penetration remains low but is growing rapidly; monetization of age-verified 18+ users is ~1.5x under-18. 2. From Jun 8, for Novel Games (must use the R15 Avatar) and spend from verified 18+ U.S. users, the creator take-rate rises from 26.6% to 37.8%, enabled by age verification. 3. Roblox is partnering with well-known studios to bring remastered mobile titles onto the platform, with details to follow in coming months. 4. A Jumpstart & Incubator program is live to provide 1:1 support for Novel Games, with ~100 titles in onboarding. 5. Multiple Q1 tech milestones: new R15+ Avatar framework (with dynamic heads), instant streaming, mesh streaming, texture streaming, server authority, and Slim. These scale from 2GB Android phones to high-end gaming PCs, removing technical barriers for original experiences.

**2.2 Q&A**

**Q: Strategic logic behind 18+ creator incentives? Why set DevEx at 37.8%?**

A: Historically, the introduction of DevEx was pivotal, evolving Roblox from a platform without Robux/DevEx into a vibrant creator economy. With DevEx, creators convert Robux to real income, completing a virtuous cycle where users spend, creators cash out, and reinvest to build higher-quality content, powering Roblox's growth flywheel. The 18+ market became targetable once we had age verification, letting us accurately identify true 18+ players. This group is ~80% of the global games market, our penetration is still low but growing fast, and 18+ monetization is already ~1.5x under-18. We know platform mechanics shape creator behavior, and we want more Novel Games to emerge. We are raising rewards to motivate creators who trust our discovery will organically favor high-retention, high-quality experiences. This DevEx increase is part of Roblox's ongoing evolution as a 'systems company,' not a one-off decision.

**Q: Is the full-year guide cut entirely driven by age-verification behavior changes? Will Roblox Reality add cloud or CapEx?**

A (CFO Naveen Chopra): The cut is broadly safety-driven. Specifically, age verification, the resulting decline in chat participation (affecting both verified and unverified users), and an over-weight to monetization in discovery all contributed. Suboptimal recommendations also played a role, but the primary driver is safety-related changes. A (CEO David Baszucki, on Roblox Reality): Roblox Reality will not be free. It marries our hybrid engine with the cloud — our current cloud operating costs are under $0.01/hour, but photoreal experiences, especially multiplayer, are compute-intensive. We think our Video Super Upsampler is unique, keying on both video and 3D spatial info to deliver very high-quality upsampling under developer control and prompts. We are at the edge of real-time 2K 60Hz photoreal models, which is why we say it is 'on the way.' When we launch, it will be paid via subscription or usage, so inference will be covered by fees. Training may carry extra costs, which we may not fully disclose this year. A (CFO Naveen Chopra, addendum): On spend, we have not changed CapEx guidance. Our plan to add GPUs in owned data centers covers this year, with some cloud training included in the updated margin guide. As tech evolves, we will train across owned DCs and cloud, while inference costs, as Dave noted, will be covered by user fees.

**Q: Ninety days ago the guide was 20%–26% and Q1 landed near the high end. Why the large FY bookings cut now, and how much is already visible in Q2? Also, does discovery tuning conflict with Roblox's democratization?**

A (CFO Naveen Chopra, on guide): We launched verification in Jan and anticipated some headwinds to hours and DAU, but only after 3–4 months of data did we grasp the 'second-order effects' — lower chat participation propagating across the platform, weakening word-of-mouth and organic content growth. A few key points: engagement remains strong, monetization is stable, and retention is stable. The pressure is at the top of the funnel, i.e., new-user inflows. More recent registration headwinds do not show up immediately in bookings, which is why Q1 was fine, but they will weigh on subsequent quarters. We expect DAU to return to QoQ growth in Q3, and given solid engagement and monetization, we are confident in the guided bookings growth — effectively low single digits in H2 given comps, driven mainly by DAU re-acceleration without heroic assumptions.

A (CEO David Baszucki, on democratization): Two metrics track democratization: total DevEx paid to creators (growing rapidly YoY), and growth rates at creator ranks 1, 10, 100, and 1,000, with the 1,000 cohort consistently outgrowing the top 100/10/1. We expect this to continue. On Kids Accounts and Select Accounts, we believe we have struck a good balance between content rating and creative freedom. Age verification uniquely enables this — platforms without it cannot segment by age precisely. Kids Accounts will cover a very large slate of titles, representing the vast majority of what that cohort already plays. 16+ users can contribute UGC and innovate, while we tightly gate content that reaches under-16 users. I remain optimistic about continued democratization.

**Q: What underpins confidence in DAU growth resuming in Q3? How will you ease comms friction and on what timeline?**

A (CFO Naveen Chopra): We are confident for several reasons: first, Q3 is seasonally strong; second, multiple product improvements Dave will discuss will be in place by then. Third, the Q3 impact from Kids Accounts and Select Accounts should be less severe than the Jan chat verification rollout. Jan was a binary experience for users — many suddenly lost all chat access, which triggered spillovers in activity, sentiment, and App Store ratings. Kids Accounts will have an impact, but much smaller, since unverified children can still access 20,000 titles covering over 97% of their hours. A (CEO David Baszucki, on comms roadmap): Global Chat is already live to a subset of users in experiments. It boosts perceived chat density by linking players across servers of the same experience, even when some cannot access chat due to verification. Preset Messages targets coordination, common in Roblox gameplay, is age-safe, and should roll out soon. The biggest step is fully integrating Party Chat natively into in-experience flows, embedding text or voice coordination without a second device. This is our third priority in comms, with no specific date yet.

**Q: From raising 18+ DevEx to better end-user experiences, how long is the transmission cycle?**

A: Great question. This was once a BOD-level debate — many saw Roblox as a hobby, with no path to a living, let alone $10–50 mn studios. Once DevEx launched, experience quality and velocity rose sharply because creators could go full-time, which is why we now have thousands making a living on Roblox. We have also seen that as we incrementally lift DevEx over time (from low initial levels, with recent RDC changes), evidence is strong: when creators trust they can earn steady income, they invest more in quality. History has repeatedly shown this, yielding higher-quality content and sustained creator commitment.

**Q: With discovery shifting from near-term monetization to long-term retention, what will users notice? How does this help chat density?**

A: It is visible on the home page — the quality and types of experiences shown and possibly their ratings. Creators already notice. Our ML now predicts multiple factors for each user–experience pair, and with that capability we assessed our state and 18+ potential, deciding to prioritize 18+ growth even if we de-weight near-term monetization slightly. Creators welcome this because they want to invest in durable, high-quality titles, and it is discouraging to see short-term monetization but unsustainable content bubble up. Intuitively and systemically, this is the right direction.

**Q: U.S. + Europe DAU fell from ~60 mn in 3Q25 to ~51 mn in 1Q26. Can that high-water mark be revisited, or were retention expectations too optimistic?**

A: Important context: about 4 mn DAU of the U.S. + Europe decline stemmed from the Russia block, which matters. More broadly, we expect DAU to return to growth as safety friction eases. We previously said users acquired via viral titles last year have retention similar to platform averages, and that still holds. As noted, retention is stable; the shortfall vs. expectations is top-of-funnel — new registrations — which we link to comms friction and its reflection in App Store organic growth.

**Q: How will rev-share for remastered titles from well-known studios compare with platform norms?**

A: We are linear and systematic in everything we do. We have never done bespoke rev-share deals across our history, despite discussing accelerators or brakes; DevEx is uniform for all. The 18+ uplift benefits those studios equally. A unique draw for many studios — whether traditional mobile or PC — is that on Roblox you build once and ship the same build to PC, tablet, and console. With Slim, streaming textures, and streaming mesh, single-build, multi-platform coverage is a major attraction in our discussions.

**Risk Disclosure & Statement:**[**Dolphin Research Disclaimer and General Disclosure**](https://support.longbridge.global/topics/misc/dolphin-disclaimer)

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