Roblox Corporation
Analytical review · Report for the quarter ended June 30, 2026 (Q2 2026)
Bakshi Finance — Family Office | Research Depth: Comprehensive
What this review is based on. Roblox's quarterly report on Form 10-Q for the quarter ended June 30, 2026, filed on July 30, 2026; the shareholder letters for the last four quarters (October 2025 through July 2026); the annual report on Form 10-K for 2025; and Form 8-K filings on the share repurchase program, the annual meeting and management changes. Market data: closing price on October 2, 2026; Bank of Israel representative dollar rate of October 5, 2026.
Company Profile
Roblox Corporation runs a platform on which users play games built by other users. The company itself develops almost no games: it provides the app (Roblox Client), the free development environment (Roblox Studio) and the cloud infrastructure, and leaves the content to its creator community. The company is headquartered in San Mateo, California, and at the end of 2025 had 3,065 full-time employees, about 75% of them in product and engineering.
Almost all revenue comes from selling a virtual currency, Robux, which users spend on in-game items and passes. Part of the Robux that creators earn can be converted into dollars through the Developer Exchange (DevEx) program, in which more than 42,000 creators are registered. Advertising and licensing are currently an insignificant share of revenue.
In Q2 2026 the platform averaged 123 million daily active users and 27 million monthly unique payers. According to the shareholder letter, about 4% of global gaming revenue runs through Roblox, in a market the company estimates at about $200 billion a year. Founder David Baszucki serves as CEO and Chair and holds Class B shares carrying 20 votes each.
Financial Performance
Reading Roblox's reports requires separating two numbers. Bookings are the Robux sold in the quarter — the cash coming in. Revenue under GAAP is the same sales, but most of it is spread over the "estimated average lifetime of a paying user", which the company currently estimates at 27 months. So today's revenue mostly reflects sales from the last two years, while bookings reflect the quarter itself.
The gap between the two numbers is widening
In the April–June 2026 quarter, revenue rose 36% to $1,469 million, while bookings rose only 8% to $1,557 million, at the low end of the company's guidance range. For the July–September 2026 quarter, according to company guidance, revenue will rise 4% to 10% and bookings will decline 14% to 18%. The company attributes the weakness to engagement shifting from 2025's viral games to games that monetize less per hour, to a change in its content-discovery algorithm that favors long-term retention, and to disabling the sale of cross-experience game passes.
At the start of 2026 the company guided to 22%–26% growth in full-year bookings. In April the range was updated to 8%–12%. In July the company stopped providing annual guidance, one quarter earlier than planned, and moved to quarterly guidance only.
Profit, cash flow and stock compensation
The company has reported a net loss every year since inception: $1,072 million in 2025 and $185 million in the latest quarter. At the same time, free cash flow is positive: $1,353 million in 2025. The gap between the two is explained mainly by two items: revenue deferral (cash arrives before revenue is recorded) and stock-based compensation (SBC), which is an expense in the income statement but not a cash outflow. SBC totaled $1,142 million over the last 12 months, 20.1% of revenue. For Q3, according to company guidance, it will be $310 million, and free cash flow will be between minus $60 million and plus $5 million.
| $ millions | Q1-25 | Q2-25 | Q3-25 | Q4-25 | Q1-26 | Q2-26 |
|---|---|---|---|---|---|---|
| Revenue | 1,035 | 1,081 | 1,360 | 1,415 | 1,442 | 1,469 |
| Bookings | 1,207 | 1,438 | 1,922 | 2,222 | 1,731 | 1,557 |
| Net loss | −216 | −280 | −257 | −318 | −248 | −185 |
| Free cash flow | 427 | 177 | 443 | 307 | 596 | 294 |
| Stock-based compensation | 259 | 285 | 287 | 298 | 275 | 282 |
Balance Sheet & Capital
On June 30, 2026 the company held $6,084 million in cash and investments — all of it in debt securities: U.S. Treasuries, agency securities, corporate bonds and commercial paper. The only debt is $1,000 million of 3.875% senior notes due May 2030. Net cash: $5,084 million.
The other side of the balance sheet: the largest liability is deferred revenue of $6,904 million — Robux already sold, for which the company still has to provide service. Against it sits an asset of $1,304 million, app-store fees paid in advance. The net difference, $5,600 million, is larger than net cash. In other words, the cash pile was built to a large extent from money users paid in advance. Equity attributable to shareholders is only $152 million, because accumulated losses ($5,490 million) are offset by paid-in capital from offerings and stock compensation.
Repurchases and dilution: in May 2026 the board authorized up to $3 billion of repurchases, with the stated intent to repurchase up to $1 billion over 12 months. In Q2, 8.2 million shares were repurchased for $380 million (about $46 per share on average). According to the company, the program is designed "to partially offset dilution from employee equity grants". Fully diluted share count: 752 million, up 2% year over year.
New commitments: in June 2026 the company committed to $845 million of hosting services over three years, and in January it signed leases for two additional headquarters buildings (about $403 million over about 13 years). According to the annual guidance from February, 2026 capital expenditures will total $470–520 million, mostly in the second half.
Segments
Roblox reports a single operating segment. The available breakdowns are geographic (by billing country) and behavioral.
| Revenue by region, $ millions | Q2-25 | Q2-26 | Change | Share of Q2-26 revenue |
|---|---|---|---|---|
| US & Canada | 670 | 846 | +26% | 57% |
| Europe | 204 | 304 | +49% | 21% |
| Asia-Pacific | 116 | 175 | +51% | 12% |
| Rest of world | 91 | 144 | +58% | 10% |
Because of revenue deferral, the regional breakdown also reflects sales from earlier periods. On current activity, according to the shareholder letter: daily users in the US and Canada rose 6% and hours there rose 1%; in Japan and India users rose 67% and 64%. Monthly unique payers outside the US and Canada rose 23%.
User age
Since January 2026, an age check is required to use chat. By the end of June, 57% of daily users had completed it (more than 70% in the US and Australia). Of those: 35% under 13, 38% aged 13–17, and 27% aged 18 and over. According to the company's estimate, which extrapolates the age-checked data to all users, US users over 18 grew 32% and monetize more than 50% higher than younger users. The company notes that these estimates are not comparable with earlier age data, which relied on self-reporting.
Competitive Position
The differentiation the company presents is vertical integration: a game engine, cloud, content discovery, a virtual economy and safety systems — in one platform that runs on PCs, consoles and low-end phones. Creators do not need their own servers, distribution or payment systems, and users do not need to download each game separately. The more users, the more creators can earn; the more creators, the more content for users.
Content diversity: according to the company, the top ten games accounted for about 20% of hours in the quarter, compared with 30% three years earlier. Hours outside the top ten rose 25%, and Robux spend there rose more than 20%.
What the reports show on the other side: the 2025 user peak was built on a few viral games (Grow a Garden, Steal a Brainrot, 99 Nights in the Forest), and since the peak daily users have fallen 19% over three quarters. Most of the audience is under 18, the audience to which most regulatory restrictions apply. The company does not publish comparative data on competitors, and this review does not include such data from a primary source.
How to Think About This Company
At Roblox, the income statement tells the past and bookings tell the present. When revenue is spread over 27 months, 36% revenue growth can sit alongside 8% bookings growth and guidance for a decline next quarter. A reader who looks only at revenue will keep seeing the 2025 peak year for several more quarters. The number that moves fast is bookings, followed by cash flow.
A viral peak is both a data point and a comparison base. In Q3 2025, daily users and bookings each rose 70%, driven by a handful of games that each drew tens of millions of concurrent players. Against a quarter like that, almost any normal quarter looks like a decline. On the other hand, not all of the decline is the base: in April the company wrote that the age-check rollout created "greater-than-expected headwinds" and "slowed new user acquisition".
Two measures of monetization tell two stories. Bookings per daily user in Q2 were almost unchanged from a year earlier ($12.66 vs $12.86). Bookings per monthly payer fell about 6% (about $19.2 vs about $20.4 a month), while the number of payers rose 15%. In other words: more people are paying, and each of them spends less. Management explains this with a shift toward games that monetize less per hour.
Safety is a product change, not only a cost. Mandatory age checks for chat, separate accounts for children (Roblox Kids and Roblox Select), restrictions on communication between minors and adults — all of these change the experience of the platform's largest audience. The company describes them as a long-term investment in trust; the reports show that in the short term they weigh on engagement and bookings. Both descriptions can be true at once.
The legal arena is open. Ten US states and Los Angeles County are suing the company over the protection of minors; five states have settled. In the first half, $91 million was accrued, and the company excludes it from its Adjusted EBITDA as "non-routine". The settlements also include platform changes that have not been accrued. In the UK, Roblox was designated in the strictest category of the Online Safety Act, and in the Netherlands an investigation was opened under the EU Digital Services Act. The company cannot estimate the range of loss in the open cases.
Free cash flow and stock compensation are two sides of the same account. Over the last 12 months: free cash flow of $1,640 million and stock-based compensation of $1,142 million. Compensation does not leave the treasury, but it increases the share count — which is why the company buys back shares to offset it. What remains for shareholders after these two items is a central question in analyzing the company.
The cash pile is large, and its source is advance sales. $6.08 billion in cash and investments is a cushion that allows the company to get through a weak period without raising capital. But against it stand $6.9 billion of deferred revenue. When bookings grow, cash arrives faster than revenue; when they fall, the process reverses and cash flow falls faster than revenue. The Q3 guidance shows this: revenue up, free cash flow around zero.
The strategic direction: an older audience. According to the company, about 80% of global gaming spend comes from adults, the audience in which Roblox's presence is low. To reach it, the company raised creators' exchange rate on US adult spend by 42%, signed with studios for games based on well-known franchises (launches from late 2026 through 2027), and is extending the engine to 2D games. The effect of all this will show up, if it does, in the bookings of coming quarters.
Visibility is short, and that is a stated choice. Within five months, full-year bookings guidance went from 22%–26% growth to the withdrawal of annual guidance. Management explains that the business depends on viral waves that are hard to forecast. For anyone following the company, each quarterly report carries more weight, because there is no annual framework to compare against.
This framework is intended to structure analysis, not to produce an investment conclusion. It takes no part in the decision — the decision belongs to the reader.
Risks & Monitoring
Risks arising from the reports
- Dependence on viral waves: the 2025 peak was built on a few games. The company itself lists "our ability to sustain virality of games" as a risk factor.
- Regulation of minors: the UK Online Safety Act (fines of up to 10% of revenue), the EU Digital Services Act (up to 6%), social-media bans for minors in Australia and France, and US state laws requiring parental consent.
- Litigation: ten states and Los Angeles County, private suits over safety, "addictive design" and gambling, and shareholder suits. In Texas and Iowa, consumer-deception claims survived motions to dismiss.
- Accounting estimate: a change in the estimated paying-user lifetime (currently 27 months) changes the pace of revenue recognition without changing cash. In 2024 a one-month reduction added $98 million to revenue.
- Dilution: stock-based compensation of more than $1.1 billion a year; the fully diluted share count rises about 2% a year despite repurchases.
- Control structure: the founder's Class B shares (20 votes each) give him about 57% of voting power.
Items to monitor in the Q3 report (late October 2026)
| # | Item | Latest reading |
|---|---|---|
| 1 | Quarterly bookings vs guidance range | Guidance: $1,576–1,653 million |
| 2 | Daily users and monthly payers | 123M and 27M in Q2 |
| 3 | Bookings per payer | About $19.2 a month (−6% year over year) |
| 4 | Stock-based compensation and free cash flow | Guidance: $310 million; FCF between −$60 and +$5 million |
| 5 | Quarterly addition to deferred revenue | +$99 million in Q2 (+$365 million a year earlier) |
| 6 | Legal accruals and new suits | $91 million in the first half |
| 7 | Q4 guidance | Not yet published; Q4 2025: $2,222 million |
| 8 | Share of users 18+ among the age-checked | 27% |
Scenario Framework
The scenarios below are descriptive, not predictive. They contain no prices, no probabilities and no ranking of outcomes. Their only purpose is to organize the conditions that would need to hold for each state to materialize, so that they can be checked against the next filings.
- If bookings per payer stop declining year over year while the number of payers keeps growing
- If daily users rise in Q3 and hours in the US and Canada return to growth
- If the studio-partnership games launch and the share of adults rises
- If stock compensation stops growing while bookings stabilize
- If bookings move around the Q2 level plus seasonality, without a new viral wave
- If revenue keeps rising slightly thanks to deferred revenue while bookings are flat
- If free cash flow stays positive but below the 2025 level, and stock compensation stays above $1 billion a year
- If legal proceedings continue at the pace of individual settlements
- If Q3 bookings come in below the guidance range and Q4 guidance points to another double-digit decline
- If the addition to deferred revenue turns negative and cash flow falls below revenue over time
- If settlements or rulings require further product changes that reduce engagement among minors
- If the user decline spreads beyond the markets where age checks were introduced
Analytical Lens
The six questions below are identical in every company review we publish. They are deliberately open and do not lead to a single conclusion. Their role is to let the reader examine the company along the same six dimensions as every other company.
Key Observations
1. In the April–June 2026 quarter, Roblox reported revenue of $1,469 million (+36%) and bookings of $1,557 million (+8%). For the July–September quarter, according to company guidance, bookings will decline 14% to 18%. At the start of the year the company guided to 22%–26% bookings growth for 2026, and in July it stopped providing annual guidance.
2. Daily active users were 123 million (+10% year over year), compared with 151.5 million in Q3 2025. Monthly unique payers were 27 million (+15% year over year), compared with 36.7 million in Q4 2025.
3. Over the last 12 months, free cash flow totaled $1,640 million and stock-based compensation $1,142 million. For Q3, according to company guidance, free cash flow will be between minus $60 million and plus $5 million and stock compensation $310 million.
4. The company holds $6.08 billion in cash and investments against $1 billion of debt and $6.9 billion of deferred revenue. In the first half of 2026 it accrued $91 million for settlements with states over the protection of minors, and repurchased 8.2 million of its shares for $380 million.
Bakshi Finance operates as a Family Office for qualified clients only. Mr. Yaron Bakshi held a licensed investment adviser qualification in Israel during 2008–2023. As of the publication date of this document, the firm does not hold an investment advice, investment marketing or portfolio management licence.
This document is intended for research and professional study purposes only. Nothing herein constitutes a recommendation to buy, sell, hold or carry out any transaction in securities. Nothing herein substitutes for advice that takes into account the data and needs of each person. Every decision is the sole responsibility of the investor.
Past performance is not indicative of future results. Data were drawn from official sources: the quarterly report on Form 10-Q for the quarter ended June 30, 2026 (July 30, 2026), the shareholder letters for Q3 and Q4 2025 and Q1 and Q2 2026, the annual report on Form 10-K for 2025 (February 11, 2026), and the company's 2026 filings with the U.S. Securities and Exchange Commission. Filings published after this date are not included.
Review for qualified clients โ Family Office
The full analytical review of Roblox (RBLX) for the quarter ended June 2026 is available to Bakshi Finance premium clients.
The review includes a 10-section analysis, "How to Think About This Company" paragraphs, a structured scenario framework, and a six-dimension Analytical Lens.
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