Roblox Chairman and CEO David Baszucki Talks Earnings
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Bloomberg Audio Studios. Podcasts. Radio. News. Video game platform Roblox, the shares on the up and up. Of course, the company reported a larger than expected jump in users for the first quarter with its daily active players jumping 26 percent, 97.8 million now. And that was for the first three months ending in March. Dave Bazzucchi, Roblox CEO, joins us. And Dave, are you economic anxiety proof? Are you recession proof?

Ed, Carolyn, thank you for having me on the program. I want to highlight significant outperformance in Q1 we just shared yesterday on our earnings call on our really mission to get 10% of the global gaming software market running on the platform. Roblox is virtual. Roblox is digital. We do not have any supply chain issues. There is no shortage of Roblox.

And we are contributing to the US trade import export ratio. We're bringing cash into the US. And you're paying some of those content creators in particular, the developers, Dave. I'm interested in that 10% figure. Like what sort of timeframe are we talking here? Because what, you're at about 3% now, am I right?

We're at about 2.5% to 3%. We have shared consistently that we believe we can grow at greater than 20% year-on-year. We highlighted in Q1 growth rates much higher than that, including revenue growth rates of 29% year-on-year, daily active user growth rates of 26% year-on-year.

and a couple really interesting highlights over thirteen by users on the platform DA use grew by thirty six percent by year-on-year and India

Huge market grew by 77% year on year. So we really think it's attainable. Dave, I'm a passionate gamer in the over 30 category. And I'd say that the biggest headlines right now are the delay of GTA 6 high fidelity game and the delay of Switch 2 on the console side.

Is that where you think you're going to compete when you aim 10% market share? How did those two headlines impact Roblox and the platform? We have shared a roadmap, including highlighting genre expansion into RPG, sports, and racing battle games on the platform. We are seeing more of this on the platform. For example, we recently, NASCAR has teamed up with Driving Empire,

Paramount teamed up with SpongeBob Simulator. PGA Tour has teamed up. So we're seeing more and more of this. We shared that these three genres, which will contribute to us getting to 10% of the gaming space, we believe grew over 60% year on year on the platform. Growing revenue, what role is advertising going to play?

We already have some creators on our platform who are making more money on advertising than they are with virtual currency. We believe it's a natural compliment. It's not big enough yet for us to break out the numbers. We just released a partnership with Google that will provide more

video advertising for some of our developers. So it's part of building an economic ecosystem. We also shared that over 100 creators on the platform made over a million dollars in the last 12 months. So there's a huge variety of creators starting to make good businesses.

Look, Wedbush, for example, the analyst there saying that payment, well, it improves the content. It draws more people there, Dave. Wedbush also say, look, when you actually tell us exactly, you break out the numbers on advertising, that's the next catalyst for Roblox shares. Any timeframe on when you will be able to break out the advertising numbers?

We want to break out those numbers sooner as soon as we can. They are growing. Stay tuned. We're looking forward to that. That said, we're growing at enormous rates with the core business of virtual currency, both on engagement and on users. Really significant outperformance in Q1.

I'm going to go to the delicate side because last time you joined us, Dave, it was all about parental controls. It's all about the focus on safety. Now, since we last spoke, there's been a couple more legal cases come your way. Look, these lawsuits are aimed at you and at Discord. And once again, it's about alleged grooming, sexual exploitation, using the platforms. How are you dealing and responding to those particular lawsuits? How are you feeling, Dave, as well, as I know you have your own family using it and you think seriously about this stuff?

I would say both optimistic and as well humility for the responsibility we have. Any single incident on our platform is one too many. And there's almost 100 million daily users on the platform every day. We take this as an enormous responsibility. We are taking leadership here in that all communication on our platform is filtered and goes through AI filters, which are getting enormously better, including voice.

There's no image sharing on our platform, so there's less risk of some of the things that happen in that area. And more and more, we're focusing not just on under 13, but on 13 through 17-year-olds. That's also a delicate age. We're starting to lean into age verification around this.

We work very heavily with local, state, and federal law enforcement. Roblox is a dangerous place for bad actors. So we have a big responsibility here. Dave, you talked about M&A actually in the Roblox ecosystem during the call. Give me some solid numbers on what that looks like and some M&A for the company as well going forward.

We have shared that there are over, there's now three creators on a run rate of over 50 million a year. You can put some multiples on top of that and estimate what their businesses might be worth. At our developer conference last year, we shared a prediction there'll be a

billion dollar valuation studio on the platform. We think that's very, very possible. Internally, we haven't announced any M&A, but we are generating a fair amount of cash. You know, we have well north of $3 billion of cash, but no Roblox M&A plans right now. Dave Bazzucchi of Roblox, thank you very much for joining us on Bloomberg Technology.

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