Roblox Joined Electronic Arts in Showing Gaming Demand Is Holding Strong Against the Gloomy Macroeconomic Backdrop

Roblox Corporation RBLX delivered its third quarter results on Wednesday, topping both revenue and profit estimates. Upon the release of the report, shares closed more than 11% up as Roblox showed strong user growth. During the quarter, Roblox also made an acquisition of an AI startup that specializes in voice moderation technology and dismissed about 30 employees from its talent acquisition team as it focuses on improving its bottom line. Its results are another sign that spending is holding up well after gaming peer, Electronic Arts EA, raised its annual profit guidance.

Third Quarter Highlights

For the quarter ended on September 30th, Roblox showed its bookings continued to grow, 20% YoY more precisely, as they reached $839 million, topping LSEG’s estimate of $830 million. For Roblox, bookings include sales recognized during the quarter as well as deferred revenue. Revenue rose 38% YoY to $713 million.

Roblox noted that revenue growth was particularly strong in eastern Asia and western Europe.

Average daily active users also grew 20% to 70.2 million with users spending more than 16 billion hours on the platform, also marking a 20% increase. Average bookings per daily active user remained flat at $11.96. Roblox narrowed its net loss to $277.2 million, down from $297.8 million it lost during last year’s comparable quarter as it slowed down the growth of major expenses.

Electronic Arts Lifted Its Annual Profit Guidance

On November 1st, Electronic Arts topped analyst estimates with its fiscal second quarter bookings and profit while also raising its full year earnings guidance on the back of its revamped soccer franchise, FC24. This is Electronic Arts’ first soccer game without the FIFA branding in almost three decades. Electronic Arts stated that FC24 gathered 14.5 million active accounts within only the first four weeks since its launch with the mobile version getting installed by more than 11 million people during the first 10 days. For the September quarter, Electronic Arts reported net bookings rose 4% to $1.82 billion, topping LSEG’s estimate of $1.78 billion while earning an adjusted profit of $1.46 per share and also topping LSEG’s estimate of $1.25.

With their latest results, Roblox and Electronic Arts both eased concerns of high-interest rates and a gloomy economic outlook harming the demand for video games. 

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