Roblox Files for IPO: A Deep Dive into Its Financials, Growth & Ownership

Roblox, the popular child-friendly gaming platform, has officially filed to go public, marking a significant milestone for the company. The filing comes just days after high-profile IPOs from Affirm and Airbnb, signaling a bustling period for tech listings.

Key Highlights of Roblox’s IPO Filing

• Confidential Filing Revealed: Roblox initially filed confidentially in mid-October but disclosed its financials publicly for the first time in its S-1 document.
• Gaming Industry Momentum: Following Unity’s successful IPO earlier this year, Roblox’s debut is poised to capitalize on investor enthusiasm for gaming platforms.

Financial Performance: Rapid Growth Amidst Challenges

Roblox operates on a free-to-play model, generating revenue through in-game purchases (Robux) and subscriptions (Roblox Premium). Here’s a snapshot of its financial trajectory:

• Revenue Growth:
  • 2018: $312.8 million (+139% YoY)
  • 2019: $488.2 million (+56% YoY)
  • First 9 Months of 2020: $588.7 million (+68% YoY)
• Bookings Surge:
  • 2020 (Jan-Sept): $1.24 billion (+171% YoY)
• User Engagement:
  • Daily Active Users (DAUs): 31.1 million (2020) vs. 17.1 million (2019)
  • Hours Played: 22.2 billion (2020), up 122% YoY

Despite its explosive growth, Roblox remains unprofitable, reporting a net loss of \(203.2 million in the first three quarters of 2020. However, its operating cash flow improved significantly, reaching \)345.3 million during the same period.

COVID-19 Impact & Future Outlook

Roblox acknowledged a pandemic-driven boost in user engagement but cautioned investors about potential slowdowns post-COVID. The company stated:

“We anticipate growth rates for our revenue to decline in future periods… and may not experience any growth in bookings or our user base.”

Ownership Structure: Who Stands to Benefit?

Roblox has raised $335.7 million in private funding, with major backers including:

• Altos Ventures: 21.3% ownership
• Meritech Capital: 10.3%
• Index Ventures: 9.9%
• Tiger Global: 7.3%
• First Round Capital: 6.3%

CEO David Baszucki holds a 12% stake, reflecting the dilution effects of multiple funding rounds.

Safety Concerns & Platform Risks

Roblox’s S-1 highlights its commitment to child safety but admits vulnerabilities:

• Past incidents, such as a 2018 hack involving inappropriate avatar interactions, underscore ongoing challenges.
• The platform’s unencrypted communications pose data security risks, a critical concern given its young user base.

Listing Details

Roblox plans to list on the New York Stock Exchange (NYSE) under the ticker symbol “RBLX.”

Note: Ownership percentages were updated on November 20, 2020, to reflect accurate figures, including CEO David Baszucki’s total stake.

For deeper insights into Roblox’s business model and tech stack, explore our previous coverage here and here.