Roblox Stock Gains On Better-Than-Expected Results

Roblox Stock

Roblox Stock (NASDAQ:RBLX)

Roblox (NASDAQ:RBLX) recently disclosed its key data for December, demonstrating continued expansion within the company. There were 61.5 million daily active users, an increase of 18% year over year, and anticipated bookings were between $430 million and $439 million, an increase of 17-20% within the same time frame.

These better-than-expected results for December instilled excitement among investors, as evidenced by Roblox stock climbing 12% on January 17, which was the most in three months, and came after a disappointing November that saw slow growth and declining daily active users. In November, the company saw slow growth and a decline in daily active users.

On the other hand, it is anticipated that revenues for the month would fall somewhere between $189 million and $199 million, representing a decrease of 1% to 6% from the previous year. This is due to the strengthening of the United States Dollar compared to other currencies; this is a big market for Roblox. According to Backlinko, only 28% of Roblox users came from the United States and Canada in 2021, while most of the remaining users came from Europe and other parts of Asia and the Pacific.

Roblox stock fell by 51.3% year over year due to the headwind.

Roblox’s Growth Could Be Helped Along by Its Introduction to the Metaverse

According to PwC’s Global Entertainment and Media Outlook 2022-2026, the value of the gaming business around the world is projected to reach $321 billion by the year 2026. Because of this, the gaming business has a promising future, which presents an opportunity for Roblox to capitalize on it and establish itself as a significant participant in the market.

After this, it has been observed that Roblox is exerting significant effort and making significant investments to enter Meta Platform’s (NASDAQ:META) metaverse. It is the first company in the gaming industry to join the ecosystem of the metaverse, and this might bring its gaming platform to a higher level.

Roblox is forming relationships with well-known luxury brands such as Gucci, Ralph Lauren, Givenchy, Tommy Hilfiger, and Nike to provide its players with a diverse selection of clothing options for their avatars. These companies include and are not limited to: This makes it possible for users to make purchases from their preferred brands using Robux, which is Roblox’s internal money. Robux accounts for a significant component of Roblox’s revenue; hence, a rise in amount of Robux sold will assist the company in increasing its top line.

In addition, in November 2022, it partnered with the Parsons School of Design. This partnership will allow students to build new goods in collaboration with seasoned designers from Roblox and Parsons. The digital versions of the designs will be available in the Roblox avatar marketplace beginning in the spring of 2023. The physical designs will be available for purchase starting in the spring of 2023 at Parsons.

One of the most prestigious private universities in New York is the Parsons School of Design, which counts illustrious fashion designers such as Marc Jacobs among its former students. Therefore, it is anticipated that the institution will introduce a slate of work that is both unique and exciting to assist Roblox in attracting more users, particularly younger people, to its platform.

Roblox Will Have to Compete With Other Games in the Metaverse

Roblox is taking steps to make a dent in the metaverse, but other tech giants, such as Microsoft Corporation (NASDAQ:MSFT), are also working toward the same goal.

Microsoft and Apple (NASDAQ:AAPL) also work to establish themselves as leaders in this sector. Microsoft is putting a lot of emphasis on the enterprise metaverse, allowing them to duplicate real-world environments like office buildings and manufacturing floors in the digital sphere. If this goal is achieved, the metaverse will be incorporated into Xbox.

According to Decrypt, Apple will soon be entering the metaverse with an expensive headset that is anticipated to bridge the gap between virtual settings and digitally boost use in the real world.

Featured Image: Unsplash @ veryinformed

Please See Disclaimer

About the author: Stephanie Bedard-Chateauneuf has over six years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, health stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.