Roblox shares fall 9% after hours; revenue misses estimates

Roblox Corp. (RBLX), whose platform lets users play and create games, reported third-quarter revenue of $1.57 billion, missing the $1.66 billion consensus estimate compiled by Finnhub. The company said in a shareholder letter filed with the SEC on Oct. 29 that revenue rose 16% from a year earlier.

Shares fell 9.2% in after-hours trading as of 4:19 p.m. ET, from a regular-session close of $52.42.

Bookings, the company's measure of sales activity, were $1.70 billion, down 12% from a year earlier. The company said the decline reflected a tough comparison with its 2025 growth, and that bookings were up over 50% on a two-year basis.

Here's how the company did:

• Revenue: $1,572 million vs. $1,360 million a year earlier
• Bookings: $1,697 million vs. $1,922 million a year earlier
• Net loss per share: a loss of 32 cents vs. a loss of 37 cents a year earlier
• Adjusted EBITDA: $138 million vs. $46 million a year earlier
• Free cash flow: $364 million vs. $443 million a year earlier

Daily active users reached 138 million, down 9% from a year earlier, and hours engaged were nearly 34 billion, down 15%. The company said it was lapping difficult comparisons, and that on a two-year basis DAUs and hours were up 55% and 63%.

Average monthly unique payers totaled 30 million, down 16% year-over-year. Average bookings per payer rose 5%.

Fourth-quarter guidance

For the fourth quarter, the company expects revenue of $1.47 billion to $1.58 billion, up 4% to 12% from a year earlier. It expects bookings of $1.89 billion to $2.00 billion, down 10% to 15%.

Revenue is expected to grow despite the bookings decline because most bookings are recognized over 27 months. The company said fourth-quarter revenue includes flow-through from prior-period bookings, particularly elevated bookings throughout 2025.

It expects an adjusted EBITDA loss of $10 million to $70 million, and free cash flow of negative $190 million to negative $105 million. The company attributed the free cash flow outlook partly to capital expenditures shifting from the third quarter into the fourth.

Costs and charges

Certain infrastructure and trust and safety expenses rose 24% to $258 million, driven by AI-related investments, including AI training and inference costs. Personnel costs excluding stock-based compensation grew 12% to $281 million, reflecting higher headcount.

The company recorded $49 million of legal settlement expenses in the quarter, tied to settlements with certain states and territories over youth-related consumer protection and digital safety matters.

Cash and capital returns

Operating cash flow was $395 million, compared with $546 million a year earlier. The company repurchased 4.4 million shares for about $200 million and had about $2.4 billion of repurchase authorization remaining as of Sept. 30.

Revenue has risen in each of the last three quarters, from $1.36 billion in the third quarter of 2025 to $1.47 billion in the second quarter of 2026, according to its SEC filings.

The company said its 18-and-over users made up 37% of U.S. age-checked daily active users, up from 33% in the second quarter.