Roblox (NYSE:RBLX) reported second-quarter 2026 revenue growth of 36% to $1.5 billion, while bookings rose 8% to $1.6 billion, landing at the low end of the company’s guidance range. Management said bookings fell short of its internal expectations primarily because younger users shifted toward games with lower hourly monetization and because changes to its recommendation system prioritized long-term retention over near-term spending.
Daily active users increased 10% year over year to 123 million, while engagement hours rose 5% to 29 billion. Operating cash flow grew 60% to $318 million and free cash flow increased 66% to $294 million.
Monetization Miss Tied to Game Mix and Discovery Changes
Chief Financial Officer Naveen Chopra said monetization, measured by bookings per hour, was below the company’s forecast, particularly among users under age 13. He attributed the shortfall to a greater-than-expected move away from high-monetizing viral games from 2025 toward a mix of newer and evergreen experiences with lower monetization per hour.
The effect was compounded by Roblox’s revised discovery algorithms, which are designed to recommend games based more directly on expected long-term retention. The changes provided more impressions to highly retentive experiences at the expense of games that may generate stronger near-term monetization, according to management.
Chopra said internal testing indicates that better retention should eventually offset the initial bookings impact. In tests, the company has seen a relatively immediate improvement in retention and engagement hours, alongside an immediate reduction in dollars per hour. Roblox expects the benefits to exceed the monetization decline over time, though Chopra declined to provide a specific timeline.
Baszucki said the company is aiming to encourage more “evergreen-type games” that keep players engaged over longer periods rather than experiences emphasizing short-term monetization. Roblox is also using age-check data to improve recommendation targeting by region and age cohort, which management believes could help mitigate the monetization pressure.
Another, less significant contributor to the bookings shortfall was Roblox’s decision to disable sales of cross-experience game passes, Chopra said.
Third-Quarter Bookings Forecast Calls for Decline
For the third quarter, Roblox forecast bookings of $1.58 billion to $1.65 billion, representing a year-over-year decline of 14% to 18% because of difficult comparisons. The company expects daily active user trends to benefit from seasonal factors, the reinstatement of Roblox in Russia, and its discovery changes, but said monetization weakness is likely to continue.
Roblox did not provide revised full-year guidance, citing greater variability in potential outcomes and ongoing platform updates. Chopra said the company is navigating a normalization period following strong growth last year while simultaneously making changes to safety, discovery and product offerings.
International user growth remained strong during the quarter. Daily active users in Japan rose 67% year over year and increased 64% in India. Hours engaged in Japan and India increased 61% and 59%, respectively. Roblox was also unblocked in Russia late in the quarter, allowing users there to return to the platform.
From a cost perspective, Chopra said reduced bookings will create fixed-cost deleveraging, while investments in artificial intelligence-powered initiatives will increase infrastructure spending. He said about half of expected year-over-year margin compression in the third quarter reflects fixed-cost deleveraging, with the other half tied to AI investments, including cloud GPU capacity.
Safety Rollout and Adult-Growth Initiatives
Roblox continued expanding its age-checking program during the quarter. Baszucki said age-check penetration reached 57% globally, including nearly 80% in Australia and roughly 70% in the U.S. and U.K. Among U.S. users under age 18, age-check penetration reached 75%.
The company has limited chat access to users who have completed age checks and introduced age-banded communications. It also rolled out Roblox Kids and Roblox Select, age-based content experiences, in June. Roblox does not allow image sharing in chat, Baszucki said.
Management views its safety investments as supportive of long-term growth, particularly as it seeks to expand among users 18 and older. Baszucki said users 18 and above account for nearly one-third of Roblox’s age-checked U.S. daily active users, while U.S. users ages 18 to 34 are growing daily active users and hours at approximately 40% year over year.
The company said it is pursuing adult growth by expanding the types of games it supports, including 2D games, strategy titles and other formats beyond its historical emphasis on 3D experiences. Roblox is also working on Roblox Reality, an effort intended to support photorealistic multiplayer gaming, and plans to initially offer access to its enhanced “photo reality” mode through a subscription.
Build, Moments and Communications Products
Roblox recently announced Build, an AI-enabled creation product designed to let users describe and develop game experiences conversationally before moving projects into Roblox Studio. Build is already live in New Zealand, where Baszucki said the company is seeing more people using Build each day than Roblox Studio.
The company also began testing its Moments video feature for users age 16 and older in Canada, New Zealand and Singapore. Moments will include game captures and short-form influencer videos, with eventual plans to include creator viewing and live gameplay features. Baszucki said early tests showed substantial gains in Moments user retention.
In the third quarter, Roblox plans to deploy in-experience friend chat, bringing real-time text messaging into Roblox games. Baszucki said the company’s longer-term communications roadmap includes options for video chat with friends and streaming through Roblox avatars.
Chopra said Roblox’s capital-allocation priority remains investing in organic growth through research and development, staffing, infrastructure and AI initiatives. The company also has capacity for share repurchases and potential acquisitions, which historically have focused largely on technical talent.
About Roblox (NYSE:RBLX)
Roblox Corporation operates Roblox, a user-generated online platform that enables people to create, share and monetize immersive 3D experiences and games. The core offering centers on Roblox Studio, a development environment that allows independent creators and studios to design interactive worlds using the company’s building tools and scripting language. Content on the platform spans games, virtual hangouts, branded experiences and live events, all delivered through a persistent social environment.
Roblox’s business model is built around its virtual economy and creator ecosystem.
