One of the more highly anticipated IPOs of 2021 debuted Wednesday.
About Roblox: Roblox RBLX is an online gaming platform that allows users to interact and play with friends. Roblox also has a game creation platform that allows its users to build games that can be played by others in the Roblox universe.
The games can be monetized and have earned millions of dollars for successful Roblox game developers. Users interact with a personalized and customizable avatar.
The Offering: Roblox is going public with a direct listing. The reference point of $45 per share values Roblox at $30 billion. Over 196 million shares were offered in the Roblox IPO.
The stock opened for trading Wednesday afternoon at $64.50 per share.
Strong Engagement: In the first nine months of 2020, Roblox had 31.1 million daily active users, growth of 81% year-over-year. The company saw 22.2 billion hours engaged by users in the same time period, year-over-year growth of 123%.
Monetization: Roblox is a free-to-play game and uses in-game currency called Robux that can be used to play certain games in the Roblox world and for avatar customization items.
Daily paying users were 455,000 in the first nine months of 2020, compared to 168,000 in the comparable period of the prior year.
Daily paying users were 125,000 in 2018 and 184,000 in 2019.
Developer Revenue: There are 7 million active developers in 170 countries on Roblox. Of that total, 380 developers are part of the Developer Exchange Program that has certain criteria like earnings 100,000 Robux.
In the first nine months of 2020, 1,050 developers earned $10,000 or more and 250 developers earned over $100,000.
Related Link: Talking Roblox: Interview With Will Hershey On Gaming Company’s Upcoming IPO
Plans for Growth: Roblox has seen massive growth over the years and saw an increase in engagement during the pandemic as other gaming companies did. Plans for growth going forward include platform expansion, age demographic expansion and international expansion.
One of the risks for Roblox is its strong user base of a younger audience. The company is working on making more content that could reach an older audience as its fans and users get older going forward.
China Joint Venture: Roblox has a joint venture with Songhu, a Tencent Holdings TCEHY affiliate, to bring Roblox to China.
The game will be branded as Luobo in China through the joint venture. Roblox will own 51% of the joint venture.
Roblox and Tencent are working on the necessary regulation to publish the game in the country with no timetable set.
Financials: Roblox had revenue of $589 million and bookings of $1.2 billion in the first nine months of 2020. Revenue grew 68% year-over-year in the first nine months of 2020.
Roblox had revenue of $488.2 million in fiscal 2019, which was up 56% year-over-year.
RBLX Price Action: The stock trades around $71 per share at publication time.
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