Roblox increases by 10% after initial earnings decline

A child looks back at a banner for Roblox, displayed to celebrate the company’s IPO, on the front of the New York Stock Exchange (NYSE) in New York, March 10, 2021.

Brendan McDermid | Reuters

Actions of Roblox were up 10% on Wednesday morning, marking a sharp turnaround from an initial 10% drop on Tuesday evening after the company posted disappointing announcements first quarter earnings.

The company reported a loss of 27 cents per share compared to Wall Street’s expected loss of 21 cents per share, according to Refinitiv. Analysts also expected $ 645 million in revenue, but the company posted $ 631.2 million. The company’s bookings fell 3% in the quarter. It also reported 54.1 million average daily active users in the first quarter, which was below StreetAccount’s consensus of 55 million.

While it is unclear what is driving the surge, the company has appeared bullish regarding growth rates for the current quarter. The online gaming platform faced tough comparisons with its performance at the start of the pandemic, when kids were glued to their TVs and gaming platforms as a way to have fun while blocking.

“We expected year-over-year growth to hit a low in April. Right now, it looks like it hit a low in March, which is good, so in sequence our year-over-year growth rates in April were better than those of March, and on a year-over-year basis I expect that to happen in May and again in June, ”Roblox CFO Michael Guthrie said during the company’s conference call with investors Wednesday morning, according to a rough transcript.

“In terms of the overall shape of the curve, normally … May is lower than April, and then June returns above May and, in fact, the beginning of the summer season, where normal seasonality begins to be felt”, Guthrie added.

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