Roblox Earnings: Exceptional User Growth Continues, but Monetization and Margin Expansion a Concern

Key Morningstar Metrics for Roblox

• Fair Value Estimate: $65.00
• Morningstar Rating: ★
• Morningstar Economic Moat Rating: Narrow
• Morningstar Uncertainty Rating: Very High

What We Thought of Roblox’s Earnings

Roblox’s RBLX daily active users continued to grow at an exceptional rate in the third quarter, and revenue of $1.4 billion and $45 million in adjusted EBITDA were well above management guidance. However, a weak 2026 margin and capital expenditure forecast sent shares down 15%.

Why it matters: Roblox again attracted an impressive number of new users. While the third quarter is often the seasonal peak for DAUs, this quarter set a record in all regions, driven by popular experiences “Grow a Garden,” “Steal a Brainrot,” and “99 Nights in the Forest.”

• Total DAUs jumped from 111.8 million to 151.8 million. However, we believe viral hits heightened these numbers, so we expect DAU losses in the fourth quarter to be higher than usual.
• Monetization remains a mixed bag. Bookings per DAU were slightly down sequentially but up materially year over year across all geographies except Asia-Pacific. Advertising still hasn’t become a meaningful contributor to sales, and management doesn’t expect that to change in 2026.

The bottom line: We don’t expect to materially change our $65 per share fair value estimate for no-moat Roblox. We anticipate improved DAU projections will be offset by more modest margin expansion in our model. Roblox has built an impressive business that should lead to substantial growth, but shares still look far too rich.

• While viral hits are becoming more frequent, they remain unpredictable. We remain cautious about the durability of large jumps in user numbers and also think Roblox needs to demonstrate a stronger ability to monetize users to justify its stock price.
• Higher developer take rates, safety and infrastructure investments, and stock-based compensation led to the poor margin guidance. Management believes safety policy changes are likely to result in “short-term friction” to users and bookings, necessary given concerns over content moderation.