Roblox growth slumps, but the company is betting big on AI to compensate
Roblox reported mixed third-quarter financial results, with slowing user engagement but strong revenue growth and profitability. Daily active users fell 9% year-over-year to 138 million, missing guidance of 145 million, while hours engaged dropped 15% to 34 billion. The decline in user-focused metrics pushed the company’s stock down 19% in after-hours trading.
However, Roblox beat expectations on financial growth, with revenue rising 16% year-over-year to $1.6 billion. The company achieved impressive profitability, with adjusted EBITDA more than tripling from $45.7 million to $138 million. Bookings fell 12% to $1.7 billion and average bookings per DAU declined 3% to $12.29, with monthly unique payers dropping 16% to 30.3 million.
The company attributed the user decline to difficult comparisons against 2025’s exceptionally strong growth period, powered by viral titles like “You Can Steal an Egg.” Leadership acknowledged that recent investments in player safety, moderation tools, and algorithm changes that prioritize long-term retention over short-term revenue have impacted near-term engagement.
To offset slowing growth, Roblox is betting heavily on generative AI creation tools as a key growth driver, positioning AI as a platform accelerant to compensate for declining user metrics and maintain its position in the competitive UGC gaming space.