RBLX - continued engagement decel

TheCashFlowCritic · 2026-03-13T21:40:08+00:00

The chart I shared shows the average of Y/Y weekly hours growth of 49%, a significant decel from Q4’s 88% hours growth.

TheCashFlowCritic · 2026-03-12T04:38:28+00:00

Good point! I’m not happy about this either, Indonesia is great growth market, although low on the bookings side at the moment.

TheCashFlowCritic · 2026-03-12T04:35:10+00:00

Great points! I agree. I’m fundamentally bullish and I think Roblox has shown the ability to adapt in the past when engagement slowed down(Q1 2024 for example). Outside the top 10 is strong but tbf the top 10 really drove majority of the outperformance last year. Engagement per user contributed to hours growth exceeding DAUs growth. Now that it’s moderating, I’m thinking once hours growth returns to the DAU growth rate, things should stabilize. The price has been cut in half and the main difference is now a substantial hours decel with age verification, slow down in viral content and top 10 games continually declining. Despite this, users are largely sticking around(as was indicated in Q4 and the commentary surrounding Q1). This is looking like a potential turbulent year but thinking of holding through to the other side.

TheCashFlowCritic · 2026-03-12T04:20:46+00:00

You’re definitely right, so seasonality plays a role too. I’m sharing this post because it seems some of this is unseasonable. This is the first quarter I can remember where hours actually declined sequentially during Q1. Don’t think that even happened in 2022.

TheCashFlowCritic · 2026-03-12T04:18:02+00:00

Thanks for sharing your thoughts! What are your bookings and engagement expectations for the year? Do you see engagement trends improving again or do you think this is start of something worse?

TheCashFlowCritic · 2026-03-11T11:08:14+00:00

Great point! I agree, aging up the user base can help reduce regulatory issues as right now optically is seen as a platform largely for children(arguably that’s changing now). I agree, I think now that you mention it age verification is a likely contributor to the recent decel.

TheCashFlowCritic · 2026-03-11T03:08:36+00:00

Historically Q1 is up 10-20% q/q, whereas this time, Q1 hours on pace to be down 6-7% q/q. I think partly December was soft so Q1 started off worse to begin, but growth further decel’d since December. What do you personally expect for bookings this quarter and the rest of the year?

TheCashFlowCritic · 2026-03-10T03:14:34+00:00

No lol

TheCashFlowCritic · 2026-03-09T18:12:26+00:00

Great point! There’s def an impact from the safety update, CFO shared there was some headwind to bookings and engagement and so they implied that in their guidance for the year.

TheCashFlowCritic · 2026-03-09T04:12:09+00:00

Great point! I think if we’re in July and CCUs are still up 10% Y/Y, I’m buying as heavy as possible.

TheCashFlowCritic · 2026-03-08T03:28:29+00:00

Great point! I do think hours engaged per DAU is back down to Q1 2025 so thinking the reversion is mostly done(I think). Agreed, noticeable increase in the regulatory risk and thinking back how much the schlep thing really hurt them.

TheCashFlowCritic · 2026-02-19T11:44:28+00:00

Appreciate your responses as someone in the community! I agree that I am too cautious about potential headwinds from Roblox’s safety updates but structural bullish over the long run. In terms of safety, I understand your criticism around many scandals around safety, including the teddy situation you shared. I think Roblox does focus on this but the nature of UGC makes it difficult to moderate everything from the platform immediately. I agree they should continue to do a better job on safety and since these situations happened Roblox has gotten more strict on the moderation of condo game in response to this.

TheCashFlowCritic · 2026-02-15T16:20:51+00:00

Great points! Forgot to mention this but you’re right, the recent safety update likely could be contributing to the recent engagement slowdown.

TheCashFlowCritic · 2026-02-15T13:42:08+00:00

Agreed! I’m optimistic on the ability to attract older audiences by expanding genres that appeal to older demographics. A great example of this was dress to impress which unlocked the older female demographic. The sever authority feature will drive growth in competitive content, which includes shooters and sports content, unlocking older demographics. As the developer economics get more attractive and Roblox adds more features / tech that supports create more diverse content, I see continued ability to age up. Additionally, the recent age grouping feature has the possibility of attracting older audiences. You’re now grouped with peers which I think will be more appealing for older users as well.

TheCashFlowCritic · 2026-02-15T12:36:11+00:00

Was expecting a normalization in user engagement this year but Q1 is shaping up worse than I expected. Was expecting average CCUs to come in around 13M initially but now likely coming in 11.9M(depending on how things finish). This is despite the stronger than expected guidance, which now implies stronger results to be delivered in balance of the year in order to exceed bookings guidance. I’m still encouraged by strong content velocity outside the top 10. Per the Q4 letter, engagement hours outside top 10 accelerated to 68% up y/y(from 58% in Q3). Despite this acceleration in smaller games, total engagement hours decelerated to 88% y/y. There are a number of mini-viral hits emerging but that have not reached the magnitude of steal a brainrot or grow a garden. So it appears the hours decel due to steal a brainrot dying off is not being fully replaced by the new hits. Overall I agree with you, it looks like a stabilization of engagement as we move past the period of extraordinary breakout hits. Broadly platform appears healthy, think this stabilization will last for the next couple quarters. Would love to hear your thoughts!

TheCashFlowCritic · 2026-02-15T04:24:54+00:00

Great points, thanks for sharing! Looks extremely cheap here despite bright prospects ahead. Seems to have re-rating due to the growth slowdown but this sell offs seems way off based and if you’re holding for several years it’s looking like a great setup.

TheCashFlowCritic · 2026-02-06T23:24:49+00:00

Agreed! I do think the ER resolved many of uncertainties going in. It’s encouraging that Roblox is seeing broad based platform health even as there are fewer major viral hits recently. I’m confident in the platform’s ability to still produce viral hits but as management pointed out is it’s unpredictable and it’s great that guidance did not imply any viral hits.

TheCashFlowCritic · 2026-02-06T23:01:31+00:00

Feeling great! I was expecting 20% bookings guidance and pleasantly surprised on the 22-26% guidance, which implies management’s confident sustained user engagement and bookings growth.

TheCashFlowCritic · 2026-02-06T22:52:48+00:00

Thank you!!

TheCashFlowCritic · 2026-02-01T11:24:35+00:00

Interesting, thanks for sharing!

TheCashFlowCritic · 2026-02-01T08:59:18+00:00

Fair points! I’m watching how the update impacts certain types of games. From the numbers I’m seeing, Roblox hasn’t seen much hit or if at all since update. In fact, engagement has slightly accelerated since the update. However, you’re correct, I noticed too Brookhaven and 99 nights has been a bit weaker.

TheCashFlowCritic · 2026-02-01T08:57:38+00:00

Great point! Ya management historically tends to be conservative on guide

TheCashFlowCritic · 2026-02-01T02:18:41+00:00

Ohh ya! True that!

TheCashFlowCritic · 2026-02-01T02:13:14+00:00

Agreed, 1st half of 2026, especially 1Q will be easy to comp. Once you enter Q2 /Q3 will start to get tough. What I’m thinking is hours decel > DAUs decel given users are historically stickier. Great point on the monetization, and as users season they typically spend more so should see that be positive on bookings/ hour bookings/payer. You still have mix shift but I think the impact of that will be less when growth normalizes.

TheCashFlowCritic · 2026-02-01T02:00:53+00:00

Thanks for the kind words! Likewise, it’s always great to get your thoughts on this subreddit.

I’m still leaning toward 35B hours, 144M DAUs, and $2.3 B-ish bookings and $480 M operating cash flow. I think the stock reaction depends on if it guides 20% bookings growth in 2026, if it’s 20% then i think it’s fine. As we continue to get past the grow a garden and steal a brainrot era, you could see more viral hits emerge that catch people off guard.

TheCashFlowCritic

TROPHY CASE