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Roblox Corporation RBLX is set to release first-quarter 2021 results on May 10.
Roblox raised $520 million at a $29.5 billion valuation in a financing round led by Altimeter Capital and Dragoneer Investment Group. The company went public through a direct listing and made its market debut on the New York Stock Exchange on Mar 10, 2021.
Hence, the first-quarter results will be its first quarterly earnings report since becoming a publicly traded company.
For the quarter, the company expects revenues between $320 million and $335 million, indicating year-over-year growth of 98% to 107%. The consensus mark for revenues is pegged at $568.6 million.
The company expects $51 million of one-time expenses related to the company’s direct listing in first-quarter 2021.
For the quarter, the consensus mark for loss has remained steady at 21 cents per share over the past 30 days.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Roblox’s first-quarter performance is expected to have benefited from growth in the company’s community of users and developers, which is expected to have boosted sales of Robux, the currency used in Roblox, thereby driving the top line in the to-be-reported quarter.
On the Roblox gaming platform, users can express themselves through their personalized avatars, discover immersive worlds, and engage with others across the community. For the first quarter 2021, the company expects daily active users (DAUs) in the range of 37.6 million to 39.6 million, indicating year-over-year growth of 59% to 68%.
Additionally, the coronavirus-led social-distancing practices, are expected to have been a major growth driver in increasing the number of active users and hours spent in the to-be-reported quarter.
For first quarter 2021, Roblox expects user hours engaged to be in the range of 8.6 million to 9 million hours, indicating year-over-year growth of 76% to 85%.
As of Dec 31, 2020, there were 32.6 million DAUs, who spent 30.6 billion hours on the platform, exploring an average of 20 experiences per month. At the end of 2020, the Roblox community had more than 8 million active developers and creators.
Moreover, the company is expected to have benefited from strong cash flow generated from Robux sales. Users spend Robux on experiences and items for their avatar, while developers and creators earn Robux by building experiences and items for users. During 2020, there were 490K daily paying users (DPUs). The average price for Robux last year was 1 cent.
For first-quarter 2021, the company expects non-GAAP bookings between $550 million and $575 million, indicating year-over-year growth of 120% to 130%.
In 2020, more than 1,250 developers and creators earned $10,000 or more, while over 300 earned $100,000 or more in Robux.
What Our Model Says
According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Roblox has an Earnings ESP of -2.38% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks That Warrant a Look
Here are a few companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release.
Ralph Lauren Corporation RL has an Earnings ESP of +6.25% and is Zacks #1 Ranked. You can see the complete list of today’s Zacks #1 Rank stocks here.
Agilent Technologies, Inc. A has an Earnings ESP of +1.57% and a Zacks Rank #2.
NVIDIA Corporation NVDA has an Earnings ESP of +2.51% and a Zacks Rank #2.
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