Roblox Q1 Earnings Preview: Analyst Estimates, Advertising Growth, Key Items To Watch

Gaming company Roblox Corp. RBLX will report first-quarter financial results before market open on May 9, 2024.

Here are the earnings estimates, what analysts are saying and key items to watch.

Earnings Estimates: Analysts expect Roblox to report first-quarter bookings of $922.98 million according to estimates from Benzinga Pro.

The company reported bookings of $773.8 million in last year's first quarter. Bookings of $1.13 billion in the fourth quarter were a company record. Roblox has beaten analysts' estimates for bookings in four of the last five quarters.

Analysts expect Roblox to report a loss of 53 cents per share in the first quarter, compared to a loss of 44 cents per share in last year's first quarter. The company has beaten analysts' earnings per share estimates in three of the past five quarters.

Guidance from the company calls for first-quarter bookings between $910 million and $940 million and revenue between $755 million and $788 million.

Roblox guided for full fiscal year 2024 bookings to be in a range of $4.14 billion to $4.28 billion. Full-year revenue was guided to be in a range of $3.30 billion and $3.40 billion.

What Analysts Are Saying: Roblox's efforts to increase new advertisers on its platform is a positive mentioned by JPMorgan analyst Cory Carpenter.

The analyst recently upgraded Roblox shares from Neutral to Overweight and raised the price target from $41 to $48.

Carpenter said Roblox posted 20% bookings growth in each of the past four quarters, showing consistent growth.

"Third-party data suggested RBLX was tracking below its bookings guide through February, but trends appeared to materially pick-up in March," Carpenter said.

The analyst expects Roblox to report first-quarter bookings of $927 million, which is above the consensus estimate. The analyst also expects Roblox's full-year bookings guidance to be reiterated during its first-quarter results.

Here are other recent analyst ratings on Roblox and their price targets.

Roth MKM: Buy rating, $55 price target

Benchmark: Buy rating, $50 price target

Stiefel: Buy rating, $53 price target

Related Link: Roblox Bookings Growth Stands Out; These 4 Analysts Deep Dive Into Q4 Print

Key Items to Watch: Roblox's partnerships with companies could be an item to watch in the first quarter as brands look for ways to engage with the company's large audience.

A report in April from Digiday said Roblox was teaming up with retail giant Walmart to make virtual e-commerce a reality. The partnership could see Walmart able to sell physical goods to users who are inside the Roblox digital platform.

Advertising efforts could be a key item analysts and investors look toward the first-quarter report. A Wall Street Journal report said Roblox reached out to programmatic advertising company PubMatic Inc PUBM in an effort to help boost video ad sales on its platform.

Increased focus on advertising could open up more monetization efforts for the company.

"We are very intentionally looking for ways to bring our audience thoughtfully to all brands," Roblox vice president of Global Partnerships Stephanie Latham said.

Roblox wants to keep users on the platform as they age and bring in new users in older demographics. The company worked on new initiatives in 2023 aimed at older audiences.

Perhaps the biggest item to watch will be if the record metrics for bookings, users and revenue in the fourth quarter can be sustained or topped in the first quarter.

"We ended the year with our strongest rate of quarterly bookings growth in two years and delivered our first quarter of $1 billion in bookings. We are scaling our operations efficiently, thereby improving our margins and cash flow, and we expect those trends to continue in 2024," Roblox Chief Financial Officer Michael Guthrie said after the company reported fourth-quarter results.

RBLX Price Action: Roblox shares trading down 3.16% at $39.26 on Wednesday at publication versus a 52-week trading range of $24.88 to $47.20. Roblox shares are up 12% over the last year.

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