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what it is
Roblox runs a free gaming platform where users make and play 3D worlds, and the company gets paid when people spend inside them.
how it gets paid
Last year Rblx made $4.9B in revenue. virtual items and in-experience spending was the main engine at $3.68B, or 75% of sales.
why it's growing
Revenue grew 35.8% last year. The top line continues to grow, driven in part by rising engagement.
what just happened
Roblox's last reported quarter was basically a shrug: EPS came in at -$0.45, exactly in line with estimates.
At a glance
B balance sheet — gets the job done, barely
xvary composite: 30/100 — weak
-$1.60 fy2026 eps est
$10B fy2028 rev est
25.2% operating margin
What they do
Roblox runs a free gaming platform where users make and play 3D worlds, and the company gets paid when people spend inside them.
Roblox wins because the product is also the factory. Players create the worlds, and those worlds pull in more players, which pulls in more creators. That network effect (more users make the service better → so what: growth can feed itself) matters when revenue hit $4.9 billion in 2025, up 35.8% vs. prior year.
How they make money
$4.9B
annual revenue · their business grew +35.8% last year
virtual items and in-experience spending
$3.68B
subscriptions and premium
$0.59B
developer exchange and creator services
$0.34B
advertising and brand experiences
$0.20B
other platform revenue
$0.09B
The products that matter
virtual worlds and in-game spending
Roblox Platform
$4.9B revenue
it's the entire business shown here, generating $4.9B in annual revenue from virtual currency, item sales, and platform activity.
core engine
creator payouts and platform supply
Creator marketplace
no segment breakout
the snapshot does not split out creator payouts, but management already flagged higher DevEx and infrastructure costs as pressure points. that matters because even with $4.9B in revenue, the company still posted a full-year loss of -$1.55 per share.
margin pressure
Key numbers
25.2%
operating margin
Operating margin → profit after running the business → so what: Roblox loses about 25 cents on every dollar of revenue.
40%
r&d ratio
R&D as a share of sales means Roblox spent roughly $2.0B of its $4.9B revenue on building the platform, not harvesting profit.
$107
18-month target
That target sits about 90% above the $56.42 share price, so the bull case needs growth to beat fear by a mile.
42%
stock drop
The shares fell 42% since the prior review after weak guidance detail, which tells you this market punishes uncertainty faster than losses.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 4 — safer than 20% of stocks
- price stability 10 / 100
- long-term debt $993M (2% of capital)
B — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for RBLX right now.
source: institutional data · return history unavailable
What just happened
beat estimates
Roblox's last reported quarter was basically a shrug: EPS came in at -$0.45, exactly in line with estimates.
The bigger issue was not the quarter itself. Investors focused on missing specificity around 2026 bookings guidance, and the stock sold off.
$3.5B
revenue
$1.09
eps
n/a
n/a
the number that mattered
The most important number was 42%: that is how much the stock fell since the prior review, because guidance clarity mattered more than reported growth.
-
shares of roblox have fallen 42% in value since our previous review.
-
the slide began in late october, after the company reported third-quarter results.the video game platform company delivered a solid performance for the september period (more on that below) but investors were spooked by management’s cautious near-term outlook. leadership indicated that the bottom line could be unfavorably impacted this year, due to rising costs from infrastructure expansions, elevated devex creator payouts, and intensified trust and safety investments.
-
what’s more, executives offered no specific 2026 bookings guidance, which led investors to fear a slowdown and focus less on the company’s impressive revenue growth.
-
the top line continues to grow, driven in part by rising engagement.
-
the california-based company reported third-quarter revenue of $1.36 billion, which represents a 48% increase compared to the same period last year.
source: company earnings report, 2026
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What could go wrong
the #1 risk is creator payouts and safety costs rising faster than monetization on Roblox's core platform.
med
cost inflation inside the platform
management already flagged infrastructure expansion, higher DevEx payouts, and trust and safety spending. those are not optional costs on a platform with younger users.
With operating margin at 5.0% and fy2026 EPS estimated at -$1.60, there is very little cushion if expenses keep rising faster than revenue.
med
engagement slowdown
the whole story depends on users showing up, creators building content, and spending staying active. if engagement slips, the flywheel weakens fast.
This snapshot shows one $4.9B revenue engine. if that engine slows, there is no second segment here to hide the damage.
med
child safety and platform regulation
a business built around younger users gets more scrutiny than a normal game publisher. moderation, privacy, and content controls can turn into margin items fast.
The impact is not just fines. forced product changes would raise costs across the full business, not one small line item.
med
guidance credibility
management gave no specific 2026 bookings guidance. for a growth stock, missing visibility matters almost as much as missing revenue.
When investors cannot model the next year cleanly, the multiple often compresses before the income statement changes.
all four risks sit against the full $4.9B revenue base, and the company is still expected to lose $1.60 per share in fy2026. that is a growth story with little room for execution misses.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next earnings report
the next quarterly report is expected around may 7, 2026. you want revenue growth and a cleaner read on costs in the same release.
margin
whether 5.0% operating margin moves up
that is the simplest scorecard on the page. if scale is real, margin should stop behaving like an afterthought.
costs
creator payouts and trust and safety spend
management already told you where pressure is coming from. watch whether those costs grow slower than revenue next.
guidance
bookings visibility
the absence of specific 2026 bookings guidance became its own event. the next time management gets more precise, the market will care.
Analyst rankings
short-term outlook
bottom 5%
momentum score 5 — the lowest rating. in human-speak, analysts think near-term price performance still looks rough.
risk profile
below average
stability score 4 means more volatility than most stocks. this is not where you go for a quiet chart.
chart momentum
top 5%
technical score 1 is the highest rating. yes, that conflicts with the weak short-term outlook. welcome to what messy data and sharp reversals look like.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 589 buyers vs. 353 sellers in 3q2025. total institutional holdings: 0.5B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$65
$148
$56
current price
$107
target midpoint · +90% from current · 3-5yr high: $150 (+85% · 16% ann'l return)
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