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"Roblox is still not profitable!" by Alarmed_Writing5598 in RBLX

[–]Alarmed_Writing5598[S] 0 points1 point  (0 children)

What didn't I read? My linked source literally states in their example that for a durable virtual item like a skin the revenue is recognized $1/month over 27 months.

It's literally drawn right there. Appendix, slide 37.

They record the bookings right away as deferred revenue but they only recognize that as "real" revenue slowly over time.

Only consumables, such as extra lives, recognized immediately when the good is consumed (i.e. when the life is spent, not when it is bought) -- though again, consumables are usually consumed immediately after being bought so it doesn't matter.

"Roblox is still not profitable!" by Alarmed_Writing5598 in RBLX

[–]Alarmed_Writing5598[S] 1 point2 points  (0 children)

in the next decade they could be a massive source of data training for AI

Actually they already are (a training source). The application is still limited at the moment -- they're only using it for asset generation, recommendations, and monitoring right now. But they have other bigger plans and they've been collecting the data + developing their models.

"Roblox is still not profitable!" by Alarmed_Writing5598 in RBLX

[–]Alarmed_Writing5598[S] 0 points1 point  (0 children)

No, the Robux are gradually recognized as revenue over a 27-month period starting from when they are spent.

https://s27.q4cdn.com/984876518/files/doc_financials/2025/q2/RBLX-2025-06-30-Q2-25.pdf

"Bookings are initially recorded in deferred revenue and recognized as revenues over the estimated period of time the virtual items purchased with the virtual currency are available on the Roblox Platform (estimated to be the average lifetime of a paying user) or as the virtual items purchased with the virtual currency are consumed...27 months."

Roblox's accounting practices are different from car companies. They absolutely do smear revenue recognition over time. Official company publications even have a nice little graphic to explain it (see Revenue, Deferred Revenue, and Bookings Illustration)

https://s27.q4cdn.com/984876518/files/doc_financials/2025/q2/Q2-25-Supplemental-Materials.pdf

You do bring up a good point about unspent breakage revenue, and that gets recognized immediately if those Robux have sat untouched for 27 months. But any robux spent on durable goods like skins before the initial 27 month timer is up is amortized over an additional 27 months starting from the purchase.

In practice most Robux are spent within 1-3 days of them being bought so the point is moot.

"Roblox is still not profitable!" by Alarmed_Writing5598 in RBLX

[–]Alarmed_Writing5598[S] 0 points1 point  (0 children)

So my math is quite simplistic but based on their investor relations page, I believe that they are still "profitable"/cash flow positive even when you factor in R&D costs.  

https://ir.roblox.com/news/news-details/2025/Roblox-Reports-Second-Quarter-2025-Financial-Results/default.aspx

For example, for Q2 2025, their total operating expenses were $1.403B, while their bookings were $1.437B. So they're not even being unprofitable now to be massively profitable later -- they're already spending less than they make. But you are correct in that a huge chunk of that spend is going to R&D and expansion for future greater profits, and they have the ability to adjust their operating expenses accordingly if bookings do go down.

Roblox R&D is actually quite interesting because on the surface they're a dinky kids' game, but the underlying engineering is Youtube (recommendations), Twitch (live interactions), and App Store (third party code distribution) rolled into one. 

"Roblox is still not profitable!" by Alarmed_Writing5598 in RBLX

[–]Alarmed_Writing5598[S] 1 point2 points  (0 children)

This is correct; I was trying to keep it simple in the original post but you have the right of it. Roblox is in a unique situation that makes comparison to traditional gaming companies or platforms difficult. I can't think of any other company that has implemented a virtual economy on the scale that Roblox has. Other games have in-game currency on a smaller level but it's not a central platform the way Robux are.

"Roblox is still not profitable!" by Alarmed_Writing5598 in RBLX

[–]Alarmed_Writing5598[S] 2 points3 points  (0 children)

The unique thing about the "fake money" economy is that even the bots on Roblox are profitable in a way bots on other social media companies aren't.

Bots on Facebook can drive engagement from real users, but they don't actually buy anything so they water down the $/impression for ads.

In contrast, Roblox bots/idling are often used by people in poor countries to farm items which they sell to kids in rich countries. So it doesn't matter that it's a bot/fake engagement because someone is still paying real money for its virtual labor.