Roblox (RBLX.US) Q3 Daily Active Users Fall Short of Expectations: Child Safety Overhaul Pain Persists, Shares Plunge Over 17% After Hours

Roblox (RBLX.US) third-quarter user numbers fell short of analyst expectations, while questions also linger over whether a new hit game can reverse a recent decline in user engagement caused by stricter child safety measures. The earnings report showed revenue of US$1.572 billion, up 16% year over year; net loss narrowed to US$230 million, with a loss of US$0.32 per share, better than the market expectation of US$0.42; adjusted EBITDA was US$138 million, far above US$46 million in the same period last year. User data became the main drag. Daily active users (DAU) were 138 million, down 9% year over year and below analysts' expectation of 145.8 million; user engagement hours were about 34 billion, down 15% year over year. Bookings were US$1.697 billion, down 12% year over year, but above Wall Street's expectation of US$1.63 billion and the upper end of the company's own guidance. Roblox shares plunged more than 17% after hours, down 17.50% as of press time at US$43.28. The company attributed the decline to a high base in 2025when hits such as "Steal A Brainrot" and "Grow A Garden" set industry recordsas well as the impact of child safety measures. For years, Roblox has faced lawsuits from multiple state attorneys general over predators on the platform, and the company subsequently rolled out dozens of safety reforms, including age verification, which pressured growth in the first two quarters of this year, while the company is betting that the reforms will bring a broader user base over the long term. The new game "Steal An Egg," launched during the summer, briefly ignited market hopes. According to Freedom Capital Markets analyst Nick McKay, the game contributed half of the platform's concurrent users on some days; however, he warned that its boost may be "overestimated"the popularity may partly come from cannibalizing older hits such as "Steal A Brainrot." CEO David Baszucki emphasized in a shareholder letter that Q3 revenue, bookings and cash flow all exceeded company guidance, AI is reshaping game content creation, and Roblox's distribution, economic system and safety infrastructure constitute its core competitiveness. On guidance, the company expects Q4 bookings of US$1.89 billion to US$2 billion, down 10% to 15% year over year; Q4 adjusted EBITDA is expected to be negative US$70 million to negative US$10 million, and free cash flow is expected to be negative US$190 million to negative US$105 million (partly due to capital expenditures shifting from Q3 to Q4). The company said in July that AI investment would push up infrastructure costs and suspended full-year guidance. In Q3, the company repurchased 4.4 million shares (about US$200 million), with about US$2.4 billion remaining under its repurchase authorization.