Roblox Corporation

Roblox Corporation is delivered a strong Q4 performance with revenues exceeding the analyst consensus estimate and narrower-than-expected losses. Despite some turbulence over the past year, the company has performed well. Although they invested over $400 million in infrastructure throughout the year for the data center in Ashburn, Virginia, they could still run the business successfully and achieve the internal target of being cash flow neutral for the year. With the exception of the first quarter of COVID, they added more new payers than ever before. Hence, payer growth was high. Additionally, the fourth quarter’s monetization plan was substantially stronger. The management is also observing healthy payer conversion. As a result, more users are paying customers globally. The active developer base has grown by 33% since last year. The company continues to see a good flow of brands to Roblox and a classic example is the fact that H&M recently launched H&M Loooptopia Experience on Roblox to market themselves. We give Roblox Corporation a ‘Hold’ rating with a revised target price.