RBLX - Earnings call transcript Q1 2022

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Operator

Good morning, ladies and gentlemen. My name is Abby, and I will be your conference operator today. At this time, I would like to welcome everyone to the Roblox First Quarter 2022 Earnings Conference Call. Today's conference is being recorded. And all lines have been placed on mute to prevent any background noise. you. Thank Instructions] [Operator time, Stephanie like Communications. Martone, this conference turn over to Director I at to would the And of Financial Ms. you conference. your may Martone, begin

Stefanie Notaney

Thank CFO, results. With you today is and session morning, David discuss me you, Baszucki; CEO, our and to XXXX joining Guthrie. Q&A thank QX Roblox Roblox's Abby. Good Mike for everyone,

ir.roblox.com. and the we On remarks Relations we published close, start, after yesterday, market Investor will we I Before call, the and our shareholder this want for earnings letter make that website opening on to questions. your at rest remind everyone brief time results a some of reserve

our forward-looking the today's allotted the your results time questions many be our business, have to our we participants, can take your you future may our as of For at do and the in statements, question we screen, please but best where in bottom expectations today. of including note financial call, as type possible On strategy. webcast not to, We'll limited icon making questions.

statements our our our and XX-K such could are to filed in the actual results ended statements, included factors those uncertainties materially including our risks subject risks from Forward-looking cause differ and described year fiscal December described that SEC in to filings, in risk are forward-looking XXXX. for Form XX,

required statements, as predictions events. We future except of law. disclaim rely as to not statements should obligation update forward-looking You forward-looking our on any by

release as can on financial as metrics Reconciliations our be slides, Investor for be supplemental found our During can this will which certain issued Relations well our of GAAP between reported call, we yesterday non-GAAP website. and found our discuss press measures. in copies also results non-GAAP in

on the to turn webcast. With being archived right for as webcast top website your call is side in questions those over shortly Dave. participants, the call will that, reminder, your be of I'll you our The afterwards. can enter screen. this a Finally, And

David Baszucki

COVID COVID. all in explains our hours of share didn't middle our welcome emerged the of users XX through Roblox In XX%. week. We were same Bookings spending what from dive read and jumped free net And below March, in cohort of QX for I per We million I'm engagement. now It generally for cash this And during all and with X our everyone. per numbers. And of X% partially pre-COVID, million through of XX hours that X in going in but really, are in example, same was generated And is of QX, And spending DAUs which million of said, few is to the X I'll highly daily deeply letter. believe, part we at the week. those less maybe QX. bookings our at that were million on some X the that exciting our highest hours community. to of is $XXX spending kept. most user hours especially our Welcome, highly number. we the investors year-over-year again, and really cohorts which we've an through per a is Q&A, cohort million before DAUs, million growth, highlight, bookings $XXX extremely COVID. in XX were had expected, to which X as notes X we year-on-year for which million of up we correlated ever. our hours our and give COVID, was lapping was up XXXX. XX% hours want on over COVID, month our X gains shareholder USA of our decreased million engagement, have than from bookings an DAUs week. million XX dynamic hours cohort, once the as engagement difficult our $XXX active QX, accrued That million is Reiterating we've X emerged cash correlated with who we XX

increase retention, I as increased the highlight, of you'll revenue. notice accruing which near move an from for read be out But is results, of to that could moving those interpreted essentially time user very will XX we XX to user our sign that we're you GAAP our to to decrease or a want positive This it us. For months. lifetime average with going revenue

our in saw through still X% core year-on-year. in year-on-year. that Internationally, are COVID, have lapping do DAU markets cohorts we headroom our growth now, QX well We even lot of on highlight share a there's I the U.S. there. have numbers want to but enormous MAU in the XX room in solid we want seeing there. XX end our right a And We of cohort, not frequency lot also because to XX countries. highlight room we two quarter, through X I numbers

of XXXX, XXXX of lot first has The enormous And Japan, which then for relative relative QX under activity. there. grow enormous QX of saw to of In user headroom to India, We at XXX% activity. with X in we DAUs. XXXX potential QX India of DAUs million potential XXXX saw which is is QX economic Xx XXX,XXX growth with of a a

just in is formation. So market that

in verification the of if stack. APIs, end developers We age I'll voice. really drive back we through is talked access spatial to Roblox that a our our includes whole the experience their working and you choose. our so own for voice, emerged up layered their have innovations hand-in-hand about with fashion and spatial share innovation they down of with QX to system We've introduced and And system, couple that that clothing ability Cloud that continue

first our migrated added has used long-term shown the that in from there, translate India. have growth very other center better India, steps Roblox Studio has our than providers decreased in and a We now. growth to of in data cloud. XX% facial by animation system our internal engagement of translate rapid Roblox own we're part which we've We've in latency data the is And

our part have believe the long-term continuous of more that addition to And We in company these, innovation. many growth for pipeline. continue in we the to is

experience larger in economy We on shareholder have the that marketplace discovery. efficient Roblox. letter few there the highlight and frontier for balance to And we down We're for at A with underway on activity. the on the into long-term projects Roblox well are I'll that economic retention game they on and to larger retention include engagement stack both the to nudge economy and validated discovery enormous the as from to our the Nike monetization We're various taking people more experiences. or items system towards teams, build the real our Vans. up in the optimizing us accounts opportunity for they're our and the our lean with engagement the ability and are buying long-term shared of and real flowing are revenue and to steps recognize adding trust ability through developers including

to as immersive economy really around we've in I will shortly to consistent economic want consistent and had and experiences. our which go releasing discovery a be we just anything for our are but regulations on through be I with have midst parallel platform, with excuse on my that boost homepage, long-term into the started brands to the for voice do their the will of developers laws ability we ages traffic the their We and with we system, there to here. work the through vision Q&A, highlighting brands, And is on advertising bringing advertising really highlight supports our with and experiences is will all then, before opportunity values, advertising, be consistent this. you'll enormous our jump

we with Alo all NFL American experiences music and Yoga, lot We We did great David and Chipotle, launched a a the Guetta more NFL. with we our McLaren experiences, hosted on have side, virtual And we hosted The Sony, concert. XXkGoldn including who Awards, Grammy and brand hosted Brit we platform. Eagle on launched Week, Tycoon

just size we based the As in bullishness have highlight this the the market. want closing your -- still CEO, of ultimate within to company on I'm

amount healthy midst we even cash in cash. the of as generating a have are We very of

We effects have rest And we community unique growth. developer that of on. really stability network our business we foundation our drive are and in that enormous the our

that, move Q&A. to joining with for we'll thank us, you and So

Operator

And Instructions] with from first Crum take our question Drew will [Operator we Stifel.

Your line is open.

Drew Crum

Okay. Thanks. Hey, guys. Good morning.

have are KPIs? So that Dave, your innovations and I currently a testing, in expect live? beta then follow-up. specifically when go to And dynamic you your custom materials in you impacted these discussed letter, shareholder have And been do heads,

David Baszucki

brick look so we're will on to subtle types in feature In and it a physically now. and and a actually right because be affects has more diversity of with live Roblox more and It's right brass that materials, done different that. of based feel custom there be paradigms, will of now types of -- we parts that experiences the rendering customize able Roblox different Yes.

one long Roblox own materials. think going rather quoting quote to statements and Roblox them I term the with is I’m custom that my gods making developer than for work doing developer

sharing longer-term really the developers our a that the Studio beta not on facial launch. launching is think and right in community I date We're we're So developer On thing. accepting now. Roblox have animation, to access

rather have As long-term Roblox these you both every KPI imagine, into as than to is so on effects. we so possible to can animated, every will soon want be avatar as that direct subtle that game get effects of more

Drew Crum

Got it.

like Mike, then, were the remind June through Setting up of digits numbers, as COVID in would you what you the high can And April month-to-month. bookings shape progress looks the create Fair bookings you're Okay. year? aside, historically distortion some enough. anticipating May single which this and XQ Thanks. what and us

Mike Guthrie

on rates month I'll It of COVID I'll to normally starting 'XX. reopen. us. April comment the strong looks a shape wane and curve Drew. growth as is last -- in very year incredibly Normally, It remind was like. Hey of one were strong last the high well, year-over-year Yes. super was the for what

it expected had like which looks bottom to is now, bottomed year-over-year Right in March, it in we growth good. So, April.

were that growth basis, and March. again So on an May better And rates to true expect be year-over-year were June. April our year-over-year sequentially, in they in than in in I

April opening normal didn't more we first in starts we summer we're overall of May. back year, In is shape reopen the to up to May, is is higher period year, much the because three open. year, 'XX, period seasonality lower through COVID terms and June kick than of where than than were Last see -- June, summer. then June normally season then seasonal months curve, and to heavy July really, April the a higher May the going This of than four And normal the sorry, from of is the in. higher the early curves May,

in are more expect summer we the hold, seasonality to the we to expect take so, spring. be do And normal vis-à-vis strong we meaning, where

in so that And August. we'll see June, July,

So June quarter. to expect the that to see sequential in we're continue improvement, the third but glad into May, and

Drew Crum

Thanks, guys.

Mike Guthrie

Thanks.

Operator

will we Bernie take Needham Company. our And with from next McTernan question &

open. is line Your

Bernie McTernan

just taking level, confidence the right you that leaning questions. are just Thanks high now? into is Maybe now on the Roblox gives be -- Great. for time to spend what to the the to you start, and gives more consumers willing right monetization why

David Baszucki

those which I'll highlight about, in a money. difference engagement you and of answer opportunity no than and experiences retention, values long-term earlier search this. and the the made same We real how give example, same have, historically consistent said highlight if XXx we efficient one and more And with opportunity want experiences spending does. more think even for of other now we have one I the of this to an is discovery the I feature frontier. consumers monetizes right in I'll

and catalog in catalog of faces experience, to than we're highlighting rather to Roblox and deeply that we're of doing clothing, user of be this our that part value in think of spend includes out catalog on, just a consumer which is consumers is really generated trying is there a One new – pull efficiency nature of I I liked historically bit catalog little have and would is enhancing But more catalog. doing XXX% the experiences dynamic what room true we're bodies, the a same optimization. kind in I'll trading money of of our thing, second ways a consumers. that more of of moving in for our our say the So heads I'll dive lot more a to our

very range well that a rare items. something items. years. and have And add opportunity this free economy. items as gotten that Roblox million X for kind economy done Roblox been in want of nature level to is We we we items or over And more actually has historically rare. Roblox-related our of XX So Roblox doing been catalog. to US$XX,XXX wants has they something is for This to the really trade become of where have community with point our fun has we've that to work dynamic and This trading

is So is our for do the realize but to it frontier. consistent, everything we with first, opportunity efficient economy we an engagement believe

Bernie McTernan

knowing Understood. And it's advertising the early that opportunity. then thinking moving in days onto through still

As look is in on have Roblox, possible call performance what metaverse like you're on to it addition on or based well? or as well, performance, is be marketing the could as about within to real to be going advertising world to marketing? Roblox thinking it a would there brand And – if then that action to advertising piece only goods the experiences translate is

David Baszucki

do to we I want values and appropriate games consistent for that want developers in any don't One to use. Yeah. within or advertising on can times. is speculate do the ages. highlight appear advertising on I imagine – units any guidelines choose Roblox as that everything teleport and various can billboards, to in-game dates that will I all

image well, So ad XD a than this creates these video units. or server in-game are pre, with rather XD dynamic

the the claim to You Nike would traffic We've that then and advertising built in physical use experience. really the bought, virtual using never their We would in item, of be can can wrapped traditional And either to brand experiences. of item the Vans brand they own related physical include include limited That bring these can other virtual go numbers brands imagine the within is world, this can a future, are And units have of like the that those like stars, through celebrities, in and form those highlighted gets you then would includes item. brands that range And include types acquiring athletes would our platform like physical wide with of possibly, interested is community virtually. items redeeming that the longer-term, activities our items off just imagine can shopping in in are virtual of those drops, hanging NFT. an think might NFT items that acquire experiences, of to items that or community in those brands a that our that equivalent items, it. the experiences tied as acquiring. I out that into to fans brand virtual can do past owning

part performance I the physically. into life fan or it that whole think brand of brand and So way a beyond the cycle goes with of wanting to virtually own

Bernie McTernan

taking fore question. Thanks Understood. the

Operator

And we our question Eric from Sachs. next Sheridan with Goldman will take

Your line is open.

Eric Sheridan

you're behind lot would From position spending on XXXX? then around company, a how broader of think of we terms quick XXXX driving how user about build the examples safety the outside business our measure and user momentum should beyond Thanks to how a get as the to you of safety. back of the should letter the be, topic to think user shareholder looking innovation narratives better spend user the follow-up safety momentum trying sort of question. performance? in longer-term into platform. I the And the thinking around the we maybe you drives, call be Thanks and in for come continued taking much. from how about sense we and so safety for you want in a about Can of user platform raise wider safety one in lens on

David Baszucki

Yes.

stability a should assume education, various consumers continues, that whether continues, is there. Roblox, safety concerts, working user in believe we on and it's advantage people school, growth ways expanding user to imagine as is engagement this something we think competitive we and will learning, as I would just safety, the that nuance as use

in we in it's will metrics, the that So a we set ML. work of of in of targets and doing ways a of detecting a doing internal that as enforce work expect our content in consumers growth and high way, safety because all behavior it's a recognizing of the We're function on doing it as for stability lot work almost conversations. both platform. expanded hidden believe automatically, bad we we very, lot lot of believe think a in very then our bad We're reverse

just the of I a supporters we as are and that company our fact environment. think that of foundation things safe and is view these reputation a the really robot and civil

how our or than intention I what think what per as we the long-term that's is view of of accelerators them more traditional user. is rather hours metrics our growth maybe

Mike Guthrie

Eric, And Mike. Yes. it's

not a It's we Having for operating and like In high-quality safe terms great think argue they is where Dave actually We're decent for looking of and short-term, are breakthroughs area if for bookings of environment. safety and a probably percentage and said leverage. platform modeling, you mentioned, civil of they're modeling I that, amounts assumption. the an make and they in the it user monetization in a make looking easier as better can base. better, feel the in people consistent

I a run, in little grew just would what one dollars, short on few faster. the as seen If high overall, list. of is because an in last you've would as the relatively aggregate this leverage say bit quarters. for there area line is is it similar So of a focus, there, be top it's But the bookings percentage

David Baszucki

tasks our anything on reviewers of stability what contradictory Yeah. any stability And big to do, that as actually more our system moderators making human without human then I'm is a not can is becomes imagine doing going automate prediction and said. and what that, one safety safety But team and to say Mike part we forward-looking efficient.

in internally human great moderators efficiency, increases not to automate but we gains are claiming do. our ability so that long-term on simultaneously any task And both seeing

Eric Sheridan

the color. Thanks Great. for

Operator

JPMorgan. David we question take with Karnovsky And from next will our

Your open. is line

David Karnovsky

US you just of product Maybe the letter, more you. impact these David, Hi. through X- higher that from old frequency are? aging QX XX-year Canada drive shareholder updates of some changes the And DAU walk in noted of US, functionality Thank up? some of what kind to increase retention to or is seeing and to cohort figure, you for the then that in already are your there users.

David Baszucki

share we one is because MAU not this do tricky Yeah, numbers.

anything quickly a then your context out of some maintaining we to get optimistic improving your And if time, and a communication there. can cannot how have through Longer gains in friends there with than so to not as lot We've influences goes you at time might shorter all our you three Frequency lose experience -- last people It into an it our historically is experience. monthly up gain. believe I the phone or conversations, on middle the are the from and Roblox headroom term, medium DAU app down time switch for made of guess, daily. so goes frequency in same are what way that counterintuitive, usage personally other what launch come just discern launch the years don't gains That MAU of getting four more you into patch what context. COVID, snack. in, I'm spontaneous is over numbers. someone but is raw frequency. platform the made And raw back Roblox the the mobile around we're but frequency. app, there's And many We've these our of a seem the that technically on mobile the will drive and -- we

Mike Guthrie

US, -- penetration And COVID In on the about the XX then X demos. to age higher when anything XX-plus. in started, age the highest between question than Yeah. to of the David, was rate the XX demo, breakout XX, X in just,

getting their 'XX highest and really dynamics, COVID the hours immediately than so in associated more number but numbers penetration on where we go quickly. still where base X% then on we in reopen, you'll back subsequently growing, And bookings people changes lower demos, percentage similar though, a new started, at just higher back of increase again, started. frequency And growth up which of on to and to so we we but had users we the we 'XX, lockdowns, had And In overnight, and had go up. much markets, as of lots we older depending to users of 'XX 'XX, lots in consistent those of age were In see bookings. we're when a school. jumped frequency XX%, as frequency based the rate the users market to those are in

growth demos changes add whereas today get XX% to users peak below. periods will and product are up levels to US. in again, age and still things as frequency just high improves We X% over other to COVID the on So is and assume higher we, these X% incredibly with XX% of time, throughout and continue back those caught frequency as that penetration in lapping return based of to basically,

David Karnovsky

wanted year. if then, positive was of there heavier assume Mike, you the be some into the see And on we your normal to for one maybe willing Okay. balance I Thanks. quarter? as of seasonality, kind operating just margins. framework provide And to bookings just should leverage you'd get given any

Mike Guthrie

not good it who leverage obviously, all we it just as company generated we cost a is -- across really saw cash that Roblox, a margins function billion. that maintain felt to XX%. in margins. maybe a operating not XXs. EBITDA EBITDA company, the routinely COVID, -- time, in a was in from flow to as margins top and during a And low we double-digit, we line at self-financing, saw simple lot rates areas Yes, low at the Pre-COVID, keen a lot the free to as goal and We business. of mid-teens double a $X company investing and step private keep was we And digit over a cash opportunity high were low free you went And would of very private question. in

and and our infrastructure. in developer hiring We continue great to invest trust we invest safety to So community, in people. continue certainly

of Today, the run to $X we for to platform. with So cash. the build long billion into the we come continue investments market make

liquid. incredibly manage the long very a for we're So business. the invest we liquid test levels to run, margins? on going not business is, should We’ve We the in to to in very it margins. short see investments high that's run, don't now, that in long P&L the returns high we're maintain If But happens, liquid. that trying very continue I question anyone’s we and But should And on on fine. comfort think very our making, focused try right we liquidity. to are the the or run, we're we're

always to doing So if grow focused we add we're much this safety be really the posture back want in think that I because let debt business to unit we that's margins. we economics that certainly constrained don't great if especially we'll we're investment, right that. of needed out. and do And infrastructure going hiring community, play been more see very and keep that to could be on the we value, a the and have We faster, I think But bookings some to don't bit as that things trust think taking the let strong. this margins investing. will a to dial Again, now. beneficial investment, little opportunity

David Karnovsky

Thank you.

Operator

Nowak take question next from our Stanley. with Morgan will we Brian And

Your open. line is

Brian Nowak

two. for Thanks my have taking I Great. questions.

of next The just of year one, first year. into the the around sort shape

become of about just how second puts normal, deleverage perhaps that and sort developer still to is is going Can the and more or from quarter sort developer increase did is some quarter? maybe, to you and and should year? fourth of changing? a for where of talk growth get year the percentage think one. the takes perform the more mix question And shape about about, over I about rates The the go year the the first thinking that of for to fees face as rate quarter? had should over the in us bookings XXXX and talk us the developer comps in you're the fees exit sort and the as way a the of But And about this you one, you throughout the get commentary one. XX. how think the users just answered how closer of about you in you Mike, of year, bookings bookings philosophically, user Thanks. last we course in And could the last fee challenges bit commentary the just around letter,

Mike Guthrie

Brian. Overall, into started in it in terms very – outside high what bookings. reopen big year-over-year bookings thought year, when year, and last rate the the before economy would we Thanks, quarter last Again, XXXX April again. we was – again, to were came the we of of sort last the Yeah. growth go in started bottom and to of people

US and saw we're we declines declines in growth So ago growing year from actual internationally. May, less users US actually as in July year-over-year the June and even much a our in the and coming bookings

open, we return. will opposite we already think impact. We're I normal the So and think this have seasonality year,

bottom. see is March. will great. the will hoped continue thought a that that's which bit the better. the we our that It of as that, little the And the April so bit was I growth. growth would shrink through bookings to think go We as gap May numbers especially had we sequential we user than suspect And what be little summer, expectation, summer. rate between March go improvements we And a that ought and bookings. in We of through year-over-year bottom, growth is to rate maybe the have was out, better would April turns be and that

growth that that's user then but fine. number. the continues really, gap not strong, if But we're really we'll going up with Now close to catch necessarily

And for would normal and seasonality. comparisons year, what we're really looking the year, sequentially negative improving in we're more actually fact, easier, as we are, long This expect. had much last that's this from expect As again, that seasonality time we almost getting is sign.

numbers growth setup community. we're distortions will good COVID et a on improved before – for the it's of have sort go fees, from the a improved this – May, then, year-over-year April, long, growth continued the as in we making hopefully, out that's dev we So for basis. dev On investments COVID too us of year-over-year June, cetera. And

community our leverage. We normal don't rates the businesses there leaned transactions engagement of well take we dev base. as see an is We And in think investing continue and to an In We last I short-term developer feeling payouts. in on we is have think opportunity platform. keep their both invest the can again, have where that. into year-plus, from real incredible a Roblox we've our engagement-based operating of from developers What like benefits build some place really they as to community. see want been

And in We're have going so of into we after still several we area we're it's not the moving bookings quarters an XX% range. see which about talked ago – leverage.

at I think XX% quarter. we past were this

range in very we're right a now. So comfortable

so don't to a I way out, you that's I if it good model – will. And think

David Baszucki

to just go and more developer coming push place experience, that I the highly really on current want experience The highly more an platform. Sonic for highlight and experience see big and where to organic are Roblox once again, The that not to brands our happen. we the we with fees out was at, Spotify organic organic.

the from companies. having to an migrate individual hobbyists vision economy goes So that our of we to small this

platform, working believe fee studio our our XXX-person validation platform on is of I to creating kind So on our is which structure. we already platform, will – – studios we brands developer on working VC-funded a now pass organically, of our have to experiences

Brian Nowak

Very both. you, Thank helpful. it. Got

Operator

question America. Omar next Dessouky from we'll take Bank with our And of

open. line Your is

Omar Dessouky

development thanks on question. have and two I and one Hi, strategy taking them, clothing philosophy. layered of for my one much on your so

before my pull you feel UGC clothing when out dynamic of late question versus derivative confident you layered technologies have And release been as I'll about bodies in to thinking on milestones with those released So, of your year? And production, as after or layered Avatar you that might time answer. caused steppingstone or expectations? since fully technology. in your layered terms in March clothing described and blog, need reach your April, much spend adoption follow-up to-date it last your second in it a behind you in two How On clothing, learnings push and you ahead does need to has does more or releasing your ads? what to

David Baszucki

Yes. -- and we user-created of little body would that's your believe I'll the company, as We and is that good you at hear bit are what to your of be internally heads, that ultimately, share right personally maybe impact head, the of adoption could underway bodies layered you I bigger long-term move layered and we than now. really who is had because, and that clothing clothing. a

quote that believe, now. think whether I not of our metrics, bodies personal want don't to heads, as that to going move it's bigger. I but get it as more it's big, just our my own And actives -- quickly is roughly XX% wearing well right want it The about We've We as and out be a are we daily much to personally, before. I thing if will but underway. talked is possible. --

Omar Dessouky

Okay, right.

of generations towards then with entry compatible strategic So, how tell a you more why matter like is previous digital to Could geared it to of clothing core competition new -- competitors create be it's me just strategy their your up. of similar platforms layer might demographic? question, difficult developing technologies replicate finish launch barriers your begin and competitors to begins for to Metaverse-like as to to

David Baszucki

to we're question. long-term, Yes, it highlight the makes is view a great community, platform our that a things. the It on big last It bodies over years. of foundation the XX and development we clothing, also of next want safety years, but UGC innovations just Roblox includes have stability. size holistic ability five over and including continuously innovate right what includes includes as the to creator when it's I quality now, the release our it tool to set. very one making the large innovations and competitive, collection and our we and have of this includes we includes momentum layered UGC It

So, these innovate. Roblox believe I what our extremely ability part but it's of ultimately, are to all competitive, makes

developer We tools unique to really operates our control as from stack cloud, we that vertically game have that a our whole. to our the way a our consistent engine, all clients, to

forward. way to simply all of and innovation, think still going we or I might vision of billion as could mix our We might for best very to that's in relying early, what have X So, a be. a moving which defend moat. of terms Roblox It's the one of we is is And competitive think think of what as really metaverse, not continue to get moat. long-term monthly more depending to we to holistic these. actives advantage And creating feel the as handle on think we unique long-term to Basically, our more of opposed is think of anything a those innovation typically much moat. on

Omar Dessouky

Thank Okay. Dave. you,

David Baszucki

Yes.

You’re welcome.

Operator

Brandon Lightshed take from with we'll next our Ross And question Partners.

open. is line Your

Brandon Ross

in monetization? think then, spoken of Is Hi. we clothing the I the the there couple. more that past features in these David's any the goes to as ROI platform call voice have you quarters. Thanks engagements features for the of you out quantify impact rolled impact for answering, Earlier I And to several have the question, way questions. from this high guess, your investment explain you've some to and And was letter, it on? have any throughout the spend. I I spoke on And will see on or and/or taking layered likes a of follow-up. tangible year a and

David Baszucki

possible. do. what as the the that's to we tried world, difficult In if analyze and to to internally in much of we contributors And many we've tried year want we that around to places and want. as And I releases Yes. share, the to product have do you in the jump many rapid found something try through in last growth I'll is you cohorts Mike, analyze also mentioning just now and that, statistical create to -- correlation. right of growth past, as periods highlight rapid can you're

of signal some have text with that that that we time like forward right I audio, to the And now, think we going communication, be the think, than communication. audio be rather will measure that. are I able spatial coming a in for will innovations those good engaged users

it's that more growth platform. going more the retained big possibly what we makes overall system, those does audio, or about to contribute avatar as innovations, when will whether can these spatial users developer and engaged retained. of that forward cloud to users find much the of we as we try our more with share some So our Generally, our translate more possibly engaged system, are

you. can, will we metrics to with share we So try those where

Mike Guthrie

developers more very that significant. road time generally, that category, what bookings been the make having will for -- of the have users. look users And that, and the investment-grade areas any and Brandon, a that more age demographic, four, older in Yes. of think three, engagement a better -- said ushering engineers, we investment business the make we at growth consistent: the this engagement enormous business been our the the growth, more users and content, line and business. world, growth amount we I around very point for five-year of and And the window of our we're think a has rates building product and have of been calls an top huge platform, our as map have growth developers on we great high the very output in The in and

of that decision meant rates specific very over is time. we any things good proof to continue of So high generating have return to advance

launch of we over generally return it economics, fantastic course, of the dynamics time, period high very business model trying so, always improve excellent. But and to have that to be long and has the every And business return. something, here a we we're so been unit the we want have time And those.

of based lack generate lot continue make going will in And good those in we to kinds decision-making. the high we're of we're returns don’t have the which those saturation, future. anywhere, believe decisions on that a So historical we of comfortable quite to

David Baszucki

our I of a to, been just averaging this players our and minutes million daily conservative system. very rolled have using and as start those items values believe, over we're XX on people for activity the already acquired XXX on I'll for out users Yeah. validated the tidbit And per consistent in layered On this out we've share audio. way a to clothing and by spatial users few voice, metrics validation end using platform. new they're rolling March, roughly that of

Brandon Ross

sense that you've my you? Great. aligned just widen funnel. Lego of in I taken approach as themselves seems key Epic with key Disney align closely way closely is approach -- more that outside while with and And it your better? does And has the the mind you've IP as IPs for a approach with hands-off Why really Epic. music, And make to kind like then of outside a such some with IP it taken then of maybe to really of holders holders kind was comparing of

David Baszucki

seen And It's individual a to we content, we platform. where all is ago good referred this to, custom how process to compiler, or biz when Sonic XX small happen platform a Over platform a internally the a to a Roblox referred as division the the our those shows hard I to, to just dev custom interworking. UGC, is difficult. what without build, way things without really years sometimes self-service. Hedgehog build and when hard forward we've But and goes and hobbyist is this move a really to more Roblox. play close category, and as ultimately our and a user-generated music custom think refer build our on in will up as on started brands, It's I self-service we IP everything without games lot question, work a more from platform. of on in in build believe a of we this in what core

all ultimately enormous build experience. as a in single where of more Roblox, building of more top So platform don't I doing. like this they're unique on vision a unified -- able for We present would platform a and a Lego Epic their these be that Lego on experience brand dimensions, to or there's believe personally and to what scalability self-service is want or in us. a I comment Lego

more a looking people is time, same going. different We this. at And ways direction very the this at scalable. the think So that lot have very, I there's of we're at believe it's

Brandon Ross

Great. Thank you.

Operator

And question. Lampen we have for question be time And Clark from will BTIG. that more one with

Your line is open.

Clark Lampen

two. have I lot. a Thanks

an cohort a a sort is, spending of do is XX platform user average nine over bookings got and think kind generation Dave, or of to the platform? users to of sort you see had time I performance. hours rate we come about I on said to time, US sort at up hour the X.X, the now, spent from I -- above think stabilize And that you growth sort follow-up hours on do does about you we layer then if And it pre-COVID as upside incremental that are maybe of user The overall engagement. first going that OpEx. what go to and base, forward? come of is think of the on right to wanted expect back about on

David Baszucki

Yes.

of lot I headroom core to think not our our cohorts, USA the XX. is monthly active. a there's like of share nine shared earlier, huge internally, They're -- one as I in there's room room. I would such through What on

which we There's to a as that We have our be as believe lot the of we've DAU believe is a would the big the spending DAU, that heads platform, XX-year I that's there's ratio. a bit with especially slightly nine- portion And already is going as hours from more We be to COVID that of COVID. they of ratios. that's focus on on in such We will less DAU were room emerged correlated there. And we're to believe will cohort. bigger time MAU in frequency, down cohort ratio. focus say US where per ultimately even on MAU than I our retention. within more to olds the but earlier, shared drive room MAU

David Baszucki

a per Just level, DAU. DAU, per Then very pre-COVID on, went Clark, high see did COVID, during certain we very very, high. Obviously, hours hours on trend. at we

coated it. down But COVID, per peak back as below higher DAU, reopening down -- so than we During are were has started. little we're per a bit DAU but going we hours into come hours we've

spend is the been world. come have users blocks, engagement. as really even as lot time, of that's of a into user And true there road around so And level even base, overall an growing the we've higher

we our see So the regions, in behavior. of same all

reopened where were feel we So accelerated we're starting -- like vis-a-vis at an we level coming pandemic. as we've it, do at the into

Clark Lampen

more you That then you've wanting has to increase a just backdrop of talent, in pretty hiring Mike, XXXX talked about really versus what of seeing market mainly this significantly the on in And of Are late trouble any right head finding most helpful. your or headcount are inflation? hiring, having employees now competitive. either sort past, engineering I levels. we're per gotten of higher That's is talent. the lot know sort byproduct cost

Mike Guthrie

costs it of is you're quarter plans, has our first of internal now Right in competitive great. ahead which seeing, market recruiting. go is seen a talented of and terms What Yes. everyone up sure. It folks we're was for a good

We to talented grow continue engineers even those G&A expect like and continue to careers. staff. to talented we in And and we're feel place fantastic for to their product our a professionals the functions build

we're our doing against And targets. year, this so far great

Clark Lampen

lot. a Thanks

Mike Guthrie

Thanks.

Stefanie Notaney

wrap for Thank a joining Abby, that's today. for And us. us you

Operator

Thank for this disconnect. and you thank may now And your conference ladies today's you. and gentlemen, participation, call. you concludes We

Roblox (RBLX) 11 May 222022 Q1 Earnings call transcript