Roblox — Q3 2026 Earnings Summary

Financial Performance:

• Revenue for Q3 2026 was $1.6 billion (specifically $1.572 billion), representing a 16% year-over-year increase.
• Bookings totaled $1.7 billion ($1.697 billion), surpassing the high end of guidance but down 12% year-over-year; on a two-year basis, bookings were up over 50%.
• Operating cash flow was $395 million, down from $546 million in Q3 2025.
• Free cash flow was $364 million, down from $443 million in Q3 2025.
• Consolidated net loss was $230 million, compared to $258 million in Q3 2025.
• Adjusted EBITDA was $138 million, compared to $46 million in Q3 2025.
• Cost of revenue was $318 million (20% of revenue), a 7% year-over-year increase, with the share of bookings from lower-cost platforms growing.
• Developer Exchange (DevEx) fees were $403 million, a 6% year-over-year decrease.
• Certain Infrastructure and Trust & Safety expenses were $258 million, a 24% year-over-year increase driven by AI-related investments.
• Personnel costs excluding stock-based compensation were $281 million, a 12% year-over-year increase.
• Total cash, cash equivalents, and investments were $6.2 billion as of September 30, 2026, a $1.0 billion year-over-year increase.
• Long-term debt was $1.009 billion as of September 30, 2026.
• Total change in net deferrals was $136 million in Q3 2026, driven entirely by the change in deferred revenue.

Guidance and Future Outlook:

• Q4 2026 revenue is expected to grow 4% to 12% year-over-year ($1.470 billion to $1.580 billion).
• Q4 2026 bookings are expected to decline 10% to 15% year-over-year ($1.890 billion to $2.000 billion).
• Q4 2026 operating cash flow is projected between $190 million and $275 million.
• Q4 2026 free cash flow is projected between $(190) million and $(105) million, reflecting a timing shift of capital expenditures from Q3 to Q4.
• Q4 2026 consolidated net loss guidance is between $(423) million and $(363) million.
• Q4 2026 Adjusted EBITDA guidance is between $(70) million and $(10) million.
• Management expects fixed cost deleveraging in Q4 relative to the prior year period.
• The company aims to capture 10% of the global gaming market and an even greater share in the U.S.
• Roblox Reality is planned for early access in the first half of 2027.
• The first phase of Roblox Everywhere is expected to launch in the first half of the next year.
• Build is planned for broader rollout later in the year.

Business Segments and Product Lines:

• Daily Active Users (DAUs) reached 138 million, up 12% quarter-over-quarter but down 9% year-over-year; on a two-year basis, DAUs are up 55%.
• Hours engaged reached nearly 34 billion, up 17% quarter-over-quarter but down 15% year-over-year; on a two-year basis, Hours are up 63%.
• O18 users represented 29% of global age-checked DAUs and 37% of U.S. age-checked DAUs, up from 27% and 33% in Q2'26.
• U.S. Age 18-34 users grew 26% year-over-year in DAUs and 23% in Hours.
• International growth was strong, with DAUs growing 33% in Japan, 37% in India, and 30% in Saudi Arabia year-over-year.
• 64% of global DAUs had completed an age check by the end of Q3'26, with penetration reaching 80% in Australia, 75% in the U.S., and 75% in the U.K.
• Roblox Plus subscribers average 2x playtime and spend 7x more Robux than non-Plus users.
• Over 70% of the top 100 games ranked by Robux spent ran Sponsored Ads; over 20% of games using rewarded video generated over 10% of in-game earnings from advertising.
• More than 80% of the top 100 games on Roblox used AI tools to accelerate creation.
• Over 500,000 users have used the "Build" tool since its alpha launch, publishing over 70,000 games.
• Published game volume using AI grew more than 50% quarter-over-quarter.
• 97% of creators regularly using AI reported accelerated development timelines.
• Server Authority was shipped to support competitive games with client prediction and server-based simulation.
• Web Play is launching on Google Chrome, allowing instant game joining without app installation.
• Voice typing and a Friends chat tab were launched to enable continuous communication.
• Quick Words was launched in July to enable seamless gameplay coordination.
• The RM3 real-time multimodal moderation system was released to detect violative content.
• The Bad Avatar Moderation (BAM) system scans avatars to prevent inappropriate combinations.
• An AI-powered chat filtering system using an LLM-based model rewrites messages into age-appropriate versions.
• The Recommended for You (RFY) algorithm was refined to improve personalization and retention.
• About 40% of the weekly RFY top 100 games ranked by impressions were created in the last three months.
• Moments now enables direct avatar item purchasing from videos and commenting functionality.

Market and Competitive Landscape:

• Approximately 20% of the U.S. U18 gaming market runs through Roblox.
• Approximately 30% of U.S. 13-17 year olds use the platform daily.
• O18 users monetize 50%+ above U18 users in the U.S.
• International markets represent significant opportunity, with less than 2% of people outside the U.S. using Roblox daily.
• The company views distribution, audience aggregation, monetization, discovery, and safety as critical growth areas as AI lowers barriers to content creation.
• Roblox aims to replicate its success with the U18 cohort in the O18 demographic.

Risks and Challenges:

• Q3 bookings declined 12% year-over-year, reflecting difficult comparisons to extraordinary growth in 2025.
• Monetization trends for younger U.S. cohorts remain challenged due to difficult prior-year comparables.
• Average monthly unique payers (MUPs) totaled 30 million, down 16% year-over-year.
• Free cash flow is expected to be negative in Q4 2026 due to a shift in capital expenditures timing.
• Forward-looking statements involve risks including the ability to execute growth strategy, sustain virality, retain users/creators, and manage regulatory requirements.
• Risks include potential misuse of user data, security breaches, and the impact of AI on the platform.
• Legal settlement expenses related to youth-related consumer protection and digital safety matters were included in non-routine adjustments.
• Age-check metrics are estimates derived from limited information and evolving methodologies, not directly comparable to historical self-reported data.

Management Commentary and Tone:

• Management described the quarter as witnessing an "inflection point in AI adoption and content generation."
• The tone regarding AI is highly positive, noting that time to create games is compressing dramatically and asset uploads tripled month-over-month.
• Management expressed confidence in the "Universal Player" and "Roblox Everywhere" initiatives to expand the O18 audience and capture global market share.
• Paid user acquisition targeting O18 users saw marketing spend up nearly 3x year-over-year, with retention and monetization outperforming organic signups.
• Management emphasized that safety is a "long-term strategic foundation" and an industry reference.
• The company noted that bookings guidance assumes a seasonal decline in DAUs between Q3 and Q4 similar to recent years.

Other Key Points:

• In Q3 2026, the company repurchased 4.4 million shares for approximately $200 million.
• As of September 30, 2026, approximately $2.4 billion of repurchase authorization remained.
• The fully diluted share count was 755 million shares as of September 30, 2026, a 2% year-over-year increase.
• The estimated average lifetime of a paying user was 27 months for both Q3 2026 and Q3 2025.
• The company has nearly 400 proprietary models powering creation, safety, social communication, discovery, economy, and infrastructure.
• Self-hosted models handle 77% of AI requests.
• The "Hunt: Roblox 20" platform-wide event was hosted in September to celebrate the 20th anniversary.
• A free base tier for the Build tool will remain available, with paid tier options for additional prompt capacity.
• The company plans to launch skippable, pre-roll video ads to drive incremental monetization.
• The DevEx rate increase for O18 users went into effect on June 8, 2026.
• The increase in DevEx fees as a percentage of bookings reflects the creator earnings increase announced on September 5, 2025.