Investors noticed the first signs of the recovering economy slowing the company’s growth after the well-known gaming platform Roblox presented its most recent significant user metrics update in June. Some may argue that early summer is a historically sluggish season for video games, and this may be true, but user count isn’t the sole key performance indicator (KPI) for Roblox.

On August 16, after the market closes, Roblox will announce its fiscal 2021 second-quarter earnings report. Before that, investors need be aware of the importance of three Roblox emphasis areas. While each earnings report just represents a chapter in a company’s growth story, understanding what to look for and why can help you make an informed investment decision in the context of the company’s overall success. Read about the roblox sound id.

Average daily active user reservations (DAU)

Growing Roblox’s DAUs is crucial, as it is for every gaming site. However, in order to become sustainably profitable, Roblox must increase its average bookings per DAU (or, in other words, the average spend on virtual money (“Robux”) for in-game use per DAU).

Roblox’s average bookings per DAU (as of June for the month of May) were anticipated to be between $5.02 and $5.09, a decrease of 2% to 3% year over year. Furthermore, according to the company’s most recent earnings report, average bookings per DAU for the month of April were between $5.59 and $5.66, indicating that Roblox users are spending less time on the platform both year over year and month over month. According to the corporation, the great majority of Roblox’s revenue comes from the sale of virtual objects on its platform in exchange for Robux.

Users aged 13 and up are active users.

Attracting more active users beyond the age of 13 is one of Roblox’s strategy for increasing bookings. Roblox’s network effects would be improved by expanding into an older user population, which would help it increase bookings (since older gamers have more money to spend).

For example, gamers above the age of 13 who play a game like Fortnite, which is somewhat age-agnostic, may persuade a large network of people — friends, siblings, and neighbors — to join them on Epic Games’ platform. Due to their restricted networks and Roblox’s reputation for kid-friendly games, gamers under the age of 13 will likely only be able to persuade friends or family members in their immediate age range to join them on Roblox.

In some respects, Roblox’s attraction to younger players is self-fulfilling: Roblox’s users, not the company itself, create games for the site. Roblox creators are aware that the platform’s user base is primarily comprised of young players, therefore they make games that are appropriate for children. These titles, in turn, attract more young gamers and developers to the platform.

Education and beyond plans

Education is, without a doubt, Roblox’s most intriguing growth path. Roblox Education is a one-of-a-kind platform that blends gaming and learning (such as coding) for the benefit of both students and teachers. This component of the business, however, is still in its early stages of development.

Roblox’s leadership has not revealed how it intends to commercialize Roblox Education, which is now a free service. Nonetheless, according to Roblox CEO David Baszucki, the firm has an “enormous educational opportunity,” as he stated during the company’s first-quarter earnings conference call. Investors should look for more information about how Roblox Education’s massive opportunity will integrate into the company’s business model and move the needle long term in the next earnings report and subsequent conference call.