Roblox 2Q25 Earnings Quick Interpretation: The second quarter performance was robust, with overall results exceeding expectations driven by blockbuster hits, confirming Roblox's high growth potential. Although buy-side expectations for some core metrics were much more optimistic than sell-side, Roblox's actual performance was still superior. The following BBG consensus expectations are relatively outdated, and the beat/miss reference is not very meaningful.

1. Most Impressive: Bookings Guidance. The expected Q3 growth rate is 41-45%, and the full year is 34%-37%, showing very strong growth. This is mainly driven by two blockbuster hits in the first half, "Grow a Garden" and "Steal a Brainbot," which not only brought an incremental revenue increase in the hundreds of millions (estimated 100-200 million) but also significantly boosted platform user activity:

Consequently, it increased player engagement and willingness to pay for other games on the platform—excluding "Grow a Garden," total spending by users on other games in the second quarter increased by 36% year-on-year, and 75% of "GG" users played at least one other game on the same day, leading to a record high repurchase rate across the platform.

Although buy-side expectations were also high, with Q3 and full-year growth rates both over 35%, Roblox's guidance is evidently more aggressive.

2. Platform Ecosystem Expansion: Breaking the Circle of Non-Child Users + Enhanced Stickiness. The second quarter DAU exceeded 110 million, with a net increase of 14 million players quarter-on-quarter, 75% of whom were over 13 years old. However, "Grow a Garden" significantly boosted user time, with average time per user increasing by 12% year-on-year. If estimated by a DAU/MAU stickiness ratio of 20%, it implies that overall traffic in the second quarter may have approached 600 million, suggesting that the management's goal of 1 billion is no longer a fantasy.

3. Profit Sacrifice for Developers: Short-term Profit Sacrifice. The second quarter continued to foster a healthy economic ecosystem by providing more development tools while increasing revenue sharing for developers, especially high-quality game developers.

In July, the platform launched a new creator incentive program, allocating 35% of the revenue from users purchasing Robux to developers participating in the incentive program, whereas normally it is just over 20%.

However, this also slowed the pace of short-term loss reduction, with GAAP operating losses expanding to over 300 million in the second quarter, and the loss rate approaching 30%. Nonetheless, the current strategy of sacrificing profits to developers to improve a healthy ecosystem is very correct, as it is conducive to driving longer-term endogenous growth, and thus the market's tolerance for short-term losses is relatively high. $Roblox(RBLX.US)