Here are a few analogies to describe Roblox:

• YouTube for games.
• An App Store for user-created virtual worlds and games.

• Roblox Platform: A global immersive platform enabling users to play millions of 3D experiences created by a community of developers.
• Roblox Studio: An integrated development environment (IDE) that empowers creators to build, design, and publish 3D experiences and virtual items for the Roblox platform.
• Robux: The virtual currency used on the Roblox platform for purchasing experiences, in-game items, and accessories for avatars.

Roblox (symbol: RBLX) primarily sells to individuals.

The company serves the following categories of customers:

1. Engaged Players/Users: These are individuals across various age groups, predominantly children and teenagers, who participate in experiences (games), socialize, and customize their avatars on the Roblox platform. They are the primary purchasers of Robux, the platform's virtual currency, which they use to acquire virtual items, avatar accessories, and access premium content within experiences.
2. Parents and Guardians: For a significant portion of Roblox's younger user base, parents and guardians are the direct financial customers who purchase Robux on behalf of their children. Roblox serves this group by providing parental controls, safety features, and resources to manage their children's engagement and spending on the platform.
3. Content Creators and Developers: While they build the content that others consume, creators and developers are crucial customers in the sense that Roblox provides them with the tools (e.g., Roblox Studio), infrastructure, monetization opportunities (through a share of Robux sales), and a global audience to distribute their experiences. Roblox actively serves this community by continuously enhancing its development platform and resources to foster content creation.

• Amazon (AMZN)
• Alphabet (GOOGL)
• PayPal Holdings, Inc. (PYPL)
• Adyen N.V. (ADYEN.AS)

David Baszucki, Founder & Chief Executive Officer

Co-founded Roblox in 2004. Prior to Roblox, he co-founded Knowledge Revolution with his brother Greg Baszucki in the late 1980s, developing educational physics software such as "Interactive Physics". Knowledge Revolution was acquired by MSC Software in December 1998 for $20 million. He then served as Vice President and General Manager of MSC Software from 2000 to 2002. Baszucki later established Baszucki & Associates, an angel investment firm, from 2003 to 2004, providing seed funding to companies like Friendster. He studied engineering and computer science at Stanford University.

Michael Guthrie, Chief Financial Officer

Joined Roblox in February 2018. Before Roblox, he served as the Chief Financial Officer at TrueCar, Inc., where he led multiple rounds of private financing and the company's initial public offering in 2014. He also served as SVP of Business Development at SharesPost in 2011. Guthrie has experience as a private equity investor at TPG Ventures, LLC (General Partner, 2000-2004) and Garnett & Helfrich Capital (Principal, 2004-2006), focusing on growth equity investing and middle market buyouts. He holds an MBA from Stanford University Graduate School of Business and a BA in Economics from the University of Virginia.

Manuel Bronstein, Chief Product Officer

Responsible for overseeing the development and execution of Roblox's product strategy. His career includes Vice President positions at Google, YouTube, and Zynga.

Craig Donato, Chief Business Officer

Leads the growth of the platform globally and oversees Marketing, Corporate Communications, Brand Partnerships, Care & Safety, and Developer Relations teams. Prior to Roblox, he led business development and monetization at Nextdoor. He was also the CEO and co-founder of Oodle, a local community marketplace, which was acquired by QVC in 2012. Donato holds an MBA from Stanford University Graduate School of Business and a BS in Electrical Engineering from Virginia Tech.

Mark Reinstra, General Counsel

Oversees all legal matters and ensures regulatory compliance at Roblox. Before joining Roblox in December 2019, Reinstra was a Partner at Wilson Sonsini Goodrich & Rosati for over 25 years. He holds a JD from Stanford Law School and a BS in Industrial Engineering from the University of Wisconsin-Madison.

1. Regulatory and Reputational Risks Related to Child Safety and Content Moderation

   Roblox faces significant legal and reputational risks due to concerns about child safety, content moderation, and potential exploitation on its platform. Given that approximately 40% of its players are under 13 years old, the company is under scrutiny for issues such as exposure to inappropriate content, online predators, and the financial exploitation of its young user base through microtransactions and gambling-like mechanics. This has led to lawsuits in the United States, international bans in several countries, and increased regulatory pressure, which could result in substantial legal costs, fines, and mandated changes to its business practices.

2. Uncertain Path to Sustained Profitability and Premium Valuation

   Roblox has a history of net losses and anticipates continued losses due to increasing operating expenses and investments in business growth. Despite strong revenue and bookings growth, the company prioritizes growth over near-term GAAP profitability, leading to significant capital expenditures and widening net losses. The company's stock also trades at a premium valuation compared to other technology companies. Its ability to justify this high valuation and achieve profitability relies heavily on successfully executing its long-term growth plan, including the mainstream adoption of the metaverse, which is not a guaranteed outcome and faces intense competition.

3. Intense Competition and User Engagement Challenges

   Roblox operates in a highly competitive and rapidly evolving market, where user preferences and technological advancements constantly change. The company faces challenges in maintaining and growing user engagement, which is crucial for its bookings and revenue. Analysts have expressed concerns about potential engagement declines and slowed bookings growth, indicating that sustained upside may depend on the successful introduction of new viral content or effective advertising efforts. Competition from other platforms and the inherent volatility of the gaming market pose ongoing risks to user retention and growth.

The emergence of the Unreal Editor for Fortnite (UEFN) poses a clear emerging threat to Roblox. Launched by Epic Games, UEFN allows creators to develop and publish their own games and experiences within the Fortnite ecosystem, directly competing with Roblox's core value proposition as a user-generated content (UGC) platform and metaverse. UEFN leverages the advanced capabilities of Unreal Engine 5, potentially offering creators more sophisticated tools and higher fidelity graphics than Roblox Studio. Coupled with Fortnite's existing massive global user base, UEFN has the potential to attract both experienced and aspiring creators, as well as players seeking richer, more diverse experiences, thereby directly vying for Roblox's developer talent pool and user attention.

Gaming Platform

Advertising

Education (EdTech)

Here are 3-5 expected drivers of future revenue growth for Roblox (RBLX) over the next 2-3 years:

1. Expanding User Base and Geographic Reach: Roblox aims to significantly grow its Daily Active Users (DAUs) by targeting older age demographics (13+) and continuing its strong international expansion, particularly in high-growth markets within the Asia-Pacific region, such as Japan, India, and Indonesia. This strategy includes efforts to reach 1 billion global DAUs over the long term.
2. Increased Monetization through Advertising: The company is actively building the infrastructure for a digital advertising platform within its virtual economy, with expectations for advertising to become a meaningful incremental revenue stream starting in 2025.
3. Innovation in User-Generated Content (UGC) and AI-Driven Tools: Roblox continues to invest in new tools and technologies for developers, including advanced AI-driven generative features, to enhance content creation and user engagement on the platform. This focus also includes improving the performance and quality of the platform across a wider range of devices globally.
4. Platform Expansion and Diversification into New Markets: Roblox is broadening its reach by launching on new platforms, such as Sony's PlayStation, and exploring new applications beyond traditional gaming, including academics, e-commerce, and entertainment. The company has a stated goal of capturing 10% of the global gaming content market.
5. Enhanced Monetization of Existing Users and Virtual Economy: Strategies are in place to accelerate monetization through diverse vehicles for creators, including freemium models, virtual currency, paid access, and ad-supported experiences, thereby increasing bookings per user. The company is focused on the leverage gained from performance, quality, and cost efficiency to drive monetization.

Capital Allocation Decisions (Last 3-5 Years)

Share Issuance

• Roblox went public via a direct listing in March 2021.
• Shares outstanding have steadily increased, rising from 0.53 billion in 2020 to approximately 0.68 billion as of November 2025, reflecting continued issuance and dilution.

Inbound Investments

• In January 2021, prior to its direct listing, Roblox raised capital through a "series H" funding round led by Altimeter Capital and Dragoneer Investment Group, which valued the company at $29.5 billion.

Outbound Investments

• Roblox acquired Loom.ai, a company specializing in 3D avatars, in December 2020.
• In August 2021, Roblox acquired the online communication platforms Bash Video and Guilded, with Guilded costing $90 million in cash and stock.

Capital Expenditures

• Capital expenditures fluctuated significantly, peaking at $426.2 million in December 2022 and reaching a 5-year low of $93.273 million in December 2021. For fiscal year 2024, capital expenditures were -$179.65 million.
• Projected capital expenditures for the full year 2025 are estimated at $(310) million.
• The primary focus of capital expenditures includes expanding infrastructure, upgrading safety features, investing in the virtual economy, app performance, AI-powered discovery and safety, and supporting substantial server and cloud resources for a growing user base.