Roblox stock closes up after initial earnings dip
- Shares of Roblox were up Wednesday.
- Shares initially plunged on the company's first-quarter earnings report, published Tuesday evening.
- While it's unclear what's driving the surge, the company appeared bullish about the current quarter's growth rates.
Shares of Roblox closed up more than 3% on Wednesday, marking a turnaround from an initial 10% plunge Tuesday evening after the company published disappointing first-quarter earnings.
The company reported a loss of 27 cents per share compared with the loss of 21 cents per share expected by Wall Street, according to Refinitiv. Analysts also expected $645 million in revenue, but the company posted $631.2 million. The company's bookings declined by 3% in the quarter. It also reported 54.1 million average daily active users in its first quarter, which was below the StreetAccount consensus of 55 million.
While it's unclear what's driving the surge, the company appeared bullish about the current quarter's growth rates. The online gaming platform has been facing tough comparisons with its performance earlier in the pandemic, when kids were glued to their televisions and gaming platforms as a way to entertain themselves in lockdown.
"We had expected year-over-year growth to bottom in April. Right now, it looks like it bottomed in March, which is good, so sequentially our year-over-year growth rates in April were better than they were in March, and on a year-over-year basis I expect that to be true in May and again in June," Roblox CFO Michael Guthrie said on the company's conference call with investors Wednesday morning, according to a rough transcript.
"In terms of the overall shape of the curve, normally ... May is lower than April, and then June is back up higher than May, and really, the opening of the summer season, where normal seasonality starts to kick in," Guthrie added.