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The pandemic hangover may be ending, at least for some. Roblox’s fourth-quarter report today showed that at least one of the Covid-19 boomers whose business flatlined once people resumed normal life is growing solidly again. Roblox’s bookings rose 17% in the fourth quarter from a year earlier, after declining in the first half of 2022. Moreover, January numbers released by Roblox looked even healthier. It’s no wonder Roblox stock surged 26% today. (It’s a mixed picture for others whose businesses initially benefitted from Covid, such as Shopify and Roku, as we discuss below.)
Roblox’s bookings—the money people spend buying virtual currency on the platform—are a future indicator of revenue, as the company recognizes the spending over time. Bookings growth fell off a cliff in mid-2021, a couple of quarters before revenue, so the pickup in bookings growth in the past two quarters suggests revenue growth should rebound from the 2% levels of the second half of 2022. Hopefully so will Roblox’s cash production—the company burned cash in 2022 after minting it in 2021.
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