Roblox Corp [RBLX] Filings

10-Q 1 rblx-20240630.htm 10-Q rblx-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q


(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number: 001-39763

Roblox Corporation

(Exact Name of Registrant as Specified in its Charter)


Delaware						20-0991664
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

970 Park Place

San Mateo, California, 94403

(Address of principal executive offices and Zip Code)

(888) 858-2569

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Class A Common Stock, $0.0001 par value

RBLX

The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 15, 2024, the registrant had approximately 598.5 million shares of Class A common stock and 48.7 million of Class B common stock outstanding, each with a par value of $0.0001 per share.

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Special Note Regarding Forward-Looking Statements
Special Note Regarding Operating Metrics

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	6
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Operations	7
	Condensed Consolidated Statements of Comprehensive Loss	8
	Condensed Consolidated Statements of Stockholders’ Equity	9
	Condensed Consolidated Statements of Cash Flows	11
	Notes to Unaudited Condensed Consolidated Financial Statements	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	50
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	52
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	87
Item 3.	Defaults Upon Senior Securities	87
Item 4.	Mine Safety Disclosures	87
Item 5.	Other Information	87
Item 6.	Exhibits	88
	Signatures	89

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “expect,” “anticipate,” “should,” “believe,” “hope,” “target,” “project,” “plan,” “goals,” “estimate,” “potential,” “predict,” “may,” “will,” “might,” “could,” “would,” “intend,” “shall,” “contemplate,” “opportunity,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•our expectations regarding future financial performance, including but not limited to our expectations regarding revenue, cost of revenue, changes in the estimated average lifetime of a paying user, operating expenses, operating losses, operating leverage, and our key metrics, and our ability to achieve and maintain future profitability;

•our ability to successfully execute our business and growth strategy, including our potential to scale and grow our advertising business, our international users, developers, and creators and our ability to create new revenue opportunities;

•the sufficiency of our cash and cash equivalents to meet our liquidity needs;

•economic, seasonal, and industry trends;

•the functionality and economics of our Platform on operating systems and through distribution channels and software application stores;

•the demand for our Platform in general;

•our ability to retain and increase our number of users, developers, and creators;

•the impact of inflation and global economic conditions on our operations;

•challenges associated with our future of work and return to office plans;

•our ability to develop enhancements to our Platform, and bring them to market in a timely manner;

•our beliefs about and objectives for future operations;

•our ability to attract and retain employees and key personnel and maintain our corporate culture;

•future acquisitions or investments, including infrastructure investments to increase capacity;

•the ability for developers to build, launch, scale, and monetize experiences for users;

•our expectations regarding our ability to generate revenue from our users;

•our ability to convert users into developers and creators;

•our expectations regarding new target demographics;

•our ability to continue to provide a safe and civil online environment, particularly for children;

•our ability to develop and protect our brand;

•our ability to maintain the security and availability of our Platform;

•our ability to detect and minimize unauthorized use of our Platform;

•the impact of disruption in supply chains on our ability to expand or increase the capacity of the Platform or replace defective equipment;

•our business model and expectations and management of future growth, including for headcount growth rate, expansion in international markets and expenditures associated with such growth;

•our ability to compete with existing and new competitors;

•our expectations regarding outstanding litigation and legal and regulatory matters;

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•our expectations regarding the effects of existing and developing laws and regulations, including with respect to privacy, data protection, online safety, and the regulation of Robux as a security, both in the U.S. and internationally, including how such laws and regulations may interfere with user, developer and creator access to our Platform and experiences;

•our expectations surrounding Robux as an attractive virtual currency;

•our goal to increase developer and creator earnings as much as possible;

•the impact of geopolitical events, including the war in Ukraine, Hamas’ attack against Israel and the ensuing war, and their impacts on economies globally;

•our expectations regarding new accounting standards;

•our ability to achieve and maintain effective control over financial reporting;

•the impact of foreign currency exchange rates and rising interest rates on results of operations;

•our estimates related to stock-based compensation expenses;

•generating sufficient cash to service our debt and other obligations that apply to our indebtedness; and

•the increased expenses associated with being a public company.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

Neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Moreover, the forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

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SPECIAL NOTE REGARDING OPERATING METRICS

We manage our business by tracking several operating metrics, including average daily active users (“DAUs”), hours engaged, bookings, average bookings per DAU (“ABPDAU”), average new and returning monthly unique payers, monthly repurchase rate, and average bookings per monthly unique payer. As a management team, we believe each of these operating metrics provides useful information to investors and others. For information concerning these metrics as measured by us, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

While these metrics are based on what we believe to be reasonable estimates of our user base for the applicable period of measurement, there are inherent challenges in measuring how our platform is used. These metrics are determined by using internal data gathered on an analytics platform that we developed and operate and have not been validated by an independent third party. This platform tracks user account and session activity. If we fail to maintain an effective analytics platform, our metrics calculations may be inaccurate. These metrics are also determined by certain demographic data provided to us by the user, such as age or gender. If our users provide us with incorrect or incomplete information, then our estimates may be inaccurate. Our estimates also may change as our methodologies and platform evolve, including through the application of new data sets or technologies or as our platform changes with new features and enhancements.

We believe that these metrics are reasonable estimates of our user base for the applicable period of measurement, and that the methodologies we employ and update from time-to-time to create these metrics are reasonable bases to identify trends in user behavior. Because we update the methodologies we employ to create metrics, our current period metrics may not be comparable to those in prior periods. For example, in the first quarter of 2023, we revised the methodology we use to calculate average monthly unique payers for payers who purchased prepaid cards through one of our specified distributors (the impact to average new and returning monthly unique payers and average bookings per monthly unique payer in periods prior to the first quarter of 2023 was not significant). Similarly, our metrics may differ from estimates published by third parties or from similarly-titled metrics from other companies due to differences in methodology. Finally, the accuracy of our metrics may be affected by certain factors relating to user activity and our platform's systems and our ability to identify and detect attempts to replicate legitimate user activity, often referred to as botting. See the section titled “Risk Factors—Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may significantly harm and negatively affect our reputation and our business.”

DAUs

We define a DAU as a user who has logged in and visited Roblox through our website or application on a unique registered account on a given calendar day. If a registered, logged in user visits Roblox more than once within a 24-hour period that spans two calendar days, that user is counted as a DAU only for the first calendar day. We believe this method better reflects global engagement on the platform compared to a method based purely on a calendar-day cutoff. DAUs for a specified period is the average of the DAUs for each day during that period. As an example, DAUs for the month of September would be an average of DAUs during that 30 day period.

Other companies, including companies in our industry, may calculate DAUs differently.

We track DAUs as an indicator of the size of the audience engaged on our platform. DAUs are also broken out by geographic region to help us understand the global engagement on our platform.

The geographic location data collected is based on the IP address associated with the account when an account is initially registered on Roblox. The IP address may not always accurately reflect a user’s actual location at the time they engaged with our platform. Historically, we have grouped Xbox users into Rest of World for the purposes of our reporting (since the fourth quarter of 2020, Xbox users have represented less than 2% of our total quarterly DAUs and quarterly hours engaged). Beginning in the fourth quarter of 2023, Xbox users are reported in their respective geographies.

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Because DAUs measure account activity and an individual user may actively use our platform within a particular day on multiple accounts for which that individual registered, our DAUs are not a measure of unique individuals accessing Roblox. Additionally, if undetected, fraud and unauthorized access to our platform may contribute, from time to time, to an overstatement of DAUs. In many cases, fraudulent accounts are created by bots to inflate user activity for a particular developer’s content on our platform, thus making the developer’s experience (which refer to the titles that have been created by developers) or other content appear more popular than it really is. We strive to detect and minimize fraud and unauthorized access to our platform. See the sections titled “Risk Factors—Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may significantly harm and negatively affect our reputation and our business,” and “Risk Factors—Some developers, creators, and users on our Platform may make unauthorized, fraudulent, or illegal use of Robux and other digital goods or experiences on our Platform, including through unauthorized third-party websites or “cheating” programs.”

Hours Engaged

We define hours engaged as the time spent by our users on the platform. We calculate total hours engaged as the aggregate of user session lengths in a given period. We estimate this length of time using internal company systems that track user activity on our platform as discrete events, and aggregate these discrete activities into a user session. A given user session on our platform may include, among other things, time spent in experiences, in Roblox Studio, in platform features such as chat and avatar personalization, in the Creator Store, and some amount of non-active time due to limits within the tracking systems and our estimation methodology. User sessions on our platform may be tracked differently across devices and platforms, including mobile, tablet, web, desktop, and game console due to inherent differences in functionality and user behaviors. As we continue to develop new features and products, we expect that our user session calculation will continue to evolve. We continue to review our user session calculation methodologies and may develop alternative calculation methods to increase consistency and accuracy in future periods.

We track hours engaged as an indicator of the user engagement on our platform. Hours engaged are also broken out by geographic region to help us understand the global engagement on our platform.

We continuously strive to increase the sophistication of our company systems to detect different user activities, including botting, non-active time and other activities across all devices. As we continue to improve our ability to detect and deter certain user behaviors on the platform and different devices, including unauthorized use of our platform, we may see an impact to our overall hours engaged as our measurement systems evolve and our efforts to reduce botting become more successful.

See the section titled “Risk Factors—Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may significantly harm and negatively affect our reputation and our business.”

Bookings

Bookings represent the sales activity in a given period without giving effect to certain non-cash adjustments, as detailed below. Substantially all of our bookings are generated from sales of virtual currency, which can ultimately be converted to virtual items on the platform. Sales of virtual currency reflected as bookings include one-time purchases or monthly subscriptions purchased via payment processors or through prepaid cards. Bookings are initially recorded in deferred revenue and recognized as revenues over the estimated period of time the virtual items purchased with the virtual currency are available on the platform (estimated to be the average lifetime of a paying user) or as the virtual items purchased with the virtual currency are consumed. Bookings also include an insignificant amount from advertising and licensing arrangements.

We believe bookings provide a timelier indication of trends in our operating results that are not necessarily reflected in our revenue as a result of the fact that we recognize the majority of revenue over the estimated average lifetime of a paying user, which decreased from 28 months in the first quarter of 2024 to 27 months as during the second quarter of 2024. The change in deferred revenue constitutes the vast majority of the reconciling difference from revenue to bookings. By removing these non-cash adjustments, we are able to measure and monitor our business performance based on the timing of actual transactions with our users and the cash that is generated from these transactions. Over the long-term, the factors impacting our revenue and bookings trends are the same. However, in the short-term, there are factors that may cause revenue and bookings trends to differ.

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We use this non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial information may be helpful to investors because it provides consistency and comparability with past financial performance. However, non-GAAP financial measures have limitations in their usefulness to investors because they have no standardized meaning prescribed by GAAP and are not prepared under any comprehensive set of accounting rules or principles. In addition, other companies, including companies in our industry, may calculate similarly titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial information as a tool for comparison. As a result, our non-GAAP financial information is presented for supplemental informational purposes only and should not be considered in isolation from, or as a substitute for financial information presented in accordance with GAAP.

Bookings are also broken out by geographic region based on the billing country of our payers, to help us understand the global engagement and monetization on our platform. The billing address may not always accurately reflect a payer’s actual location at the time of their purchase.

ABPDAU

We define ABPDAU as bookings in a given period divided by the DAUs for such period. We primarily use ABPDAU as a way to understand how we are monetizing across all of our users through the sale of virtual currency and subscriptions. ABPDAU is also broken out by geographic region to help us understand the global monetization on our platform.

Average New and Returning Monthly Unique Payers and Monthly Repurchase Rate

We define new monthly unique payers as user accounts that made their first payment on the platform, or via redemption of prepaid cards, during a given month. Average new monthly unique payers for a specified period is the average of the new monthly unique payers for each month during that period. Because we do not always have the data necessary to link an individual who has paid under multiple user accounts, an individual may be counted as multiple new monthly unique payers.

We define returning monthly unique payers as user accounts that have made a payment on the platform, or via redemption of prepaid cards, in the current month and in any prior month. Average returning monthly unique payers for a specified period is the average of the returning monthly unique payers for each month during that period. Because we do not always have the data necessary to link an individual who has paid under multiple user accounts, an individual may be counted as multiple returning monthly unique payers.

We define monthly repurchase rate as the returning monthly unique payers in the current month, divided by the sum of the prior month’s new monthly unique payers and returning monthly unique payers. Average monthly repurchase rate for a specified period is the average of the monthly repurchase rates for each month during that period.

Average Bookings per Monthly Unique Payer

We define average bookings per monthly unique payer as bookings in the specified period divided by the average monthly unique payers for the same specified period.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

ROBLOX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par values)

(unaudited)


	As of
	June 30, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	966,406	$	678,466
Short-term investments	1,445,689		1,514,808
Accounts receivable—net of allowances	345,809		505,769
Prepaid expenses and other current assets	87,100		74,549
Deferred cost of revenue, current portion	559,278		501,821
Total current assets	3,404,282		3,275,413
Long-term investments	1,189,135		1,043,399
Property and equipment—net	675,075		695,360
Operating lease right-of-use assets	722,493		665,107
Deferred cost of revenue, long-term	277,614		283,326
Intangible assets, net	43,113		53,060
Goodwill	141,900		142,129
Other assets	16,904		10,284
Total assets	$	6,470,516	$	6,168,078
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable	$	38,877	$	60,087
Accrued expenses and other current liabilities	269,839		271,121
Developer exchange liability	330,289		314,866
Deferred revenue—current portion	2,662,087		2,406,292
Total current liabilities	3,301,092		3,052,366
Deferred revenue—net of current portion	1,311,787		1,373,250
Operating lease liabilities	706,018		646,506
Long-term debt, net	1,005,679		1,005,000
Other long-term liabilities	34,639		22,330
Total liabilities	6,359,215		6,099,452
Commitments and contingencies (Note 10)
Stockholders’ equity
Common stock, $0.0001 par value; 5,000,000 authorized as of June 30, 2024 and December 31, 2023, 646,611 and 631,221 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively; Class A common stock—4,935,000 shares authorized as of June 30, 2024 and December 31, 2023, 597,933 and 581,135 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively; Class B common stock—65,000 shares authorized as of June 30, 2024 and December 31, 2023, 48,678 and 50,086 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	61		61
Additional paid-in capital	3,664,414		3,134,946
Accumulated other comprehensive income/(loss)	(6,229)		1,536
Accumulated deficit	(3,536,740)		(3,060,253)
Total Roblox Corporation Stockholders’ equity	121,506		76,290
Noncontrolling interests	(10,205)		(7,664)
Total Stockholders’ equity	111,301		68,626
Total Liabilities and Stockholders’ equity	$	6,470,516	$	6,168,078

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Revenue	$	893,543	$	680,766	$	1,694,843	$	1,336,110
Cost and expenses:
Cost of revenue(1)	198,557		162,029		377,423		313,870
Developer exchange fees	208,270		165,843		410,675		348,283
Infrastructure and trust & safety	221,064		225,039		447,998		436,083
Research and development	361,684		315,319		723,749		590,856
General and administrative	105,627		96,197		203,451		193,771
Sales and marketing	36,290		30,328		71,824		57,083
Total cost and expenses	1,131,492		994,755		2,235,120		1,939,946
Loss from operations	(237,949)		(313,989)		(540,277)		(603,836)
Interest income	44,383		34,764		86,553		65,846
Interest expense	(10,204)		(10,129)		(20,567)		(20,141)
Other income/(expense), net	(3,315)		3,277		(3,661)		2,837
Loss before income taxes	(207,085)		(286,077)		(477,952)		(555,294)
Provision for/(benefit from) income taxes	110		(1,236)		1,163		(505)
Consolidated net loss	(207,195)		(284,841)		(479,115)		(554,789)
Net loss attributable to noncontrolling interests	(1,312)		(2,064)		(2,628)		(3,699)
Net loss attributable to common stockholders	$	(205,883)	$	(282,777)	$	(476,487)	$	(551,090)
Net loss per share attributable to common stockholders, basic and diluted	$	(0.32)	$	(0.46)	$	(0.75)	$	(0.90)
Weighted-average shares used in computing net loss per share attributable to common stockholders—basic and diluted	642,814		612,689		638,917		609,680

(1)Depreciation of servers and infrastructure equipment included in infrastructure and trust & safety.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
Consolidated net loss	$	(207,195)	$	(284,841)	$	(479,115)	$	(554,789)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	57		875		(621)		807
Net change in unrealized losses on available-for-sale marketable securities	(676)		(14,605)		(7,057)		(15,180)
Other comprehensive loss, net of tax	(619)		(13,730)		(7,678)		(14,373)
Total comprehensive loss, including noncontrolling interests	(207,814)		(298,571)		(486,793)		(569,162)
Less: net loss attributable to noncontrolling interests	(1,312)		(2,064)		(2,628)		(3,699)
Less: cumulative translation adjustments attributable to noncontrolling interests	21		427		87		393
Other comprehensive loss attributable to noncontrolling interests, net of tax	(1,291)		(1,637)		(2,541)		(3,306)
Total comprehensive loss attributable to common stockholders	$	(206,523)	$	(296,934)	$	(484,252)	$	(565,856)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

Three Months Ended June 30, 2024


	Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income/(Loss)		Accumulated Deficit		Non- Controlling Interest		Total Stockholders’ Equity
	Shares	Amount
Balance at March 31, 2024	639,734	$	61	$	3,407,986	$	(5,589)	$	(3,330,857)	$	(8,914)	$	62,687
Issuance of common stock upon exercise of stock options	1,692	—		4,537		—		—		—		4,537


Vesting of restricted stock units	5,185	—		—		—		—		—		—
Stock-based compensation expense	—	—		251,891		—		—		—		251,891
Other comprehensive income/(loss)	—	—		—		(640)		—		21		(619)
Net loss	—	—		—		—		(205,883)		(1,312)		(207,195)
Balance at June 30, 2024	646,611	$	61	$	3,664,414	$	(6,229)	$	(3,536,740)	$	(10,205)	$	111,301

Six Months Ended June 30, 2024


	Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income/(Loss)		Accumulated Deficit		Non- Controlling Interest		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2023	631,221	$	61	$	3,134,946	$	1,536	$	(3,060,253)	$	(7,664)	$	68,626
Issuance of common stock upon exercise of stock options	4,286	—		12,333		—		—		—		12,333

Issuance of common stock under Employee Stock Purchase Plan	1,085	—		24,742		—		—		—		24,742
Vesting of restricted stock units	10,019	—		—		—		—		—		—



Stock-based compensation expense	—	—		492,393		—		—		—		492,393
Other comprehensive income/(loss)	—	—		—		(7,765)		—		87		(7,678)
Net loss	—	—		—		—		(476,487)		(2,628)		(479,115)
Balance at June 30, 2024	646,611	$	61	$	3,664,414	$	(6,229)	$	(3,536,740)	$	(10,205)	$	111,301

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(unaudited)

Three Months Ended June 30, 2023


	Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income/(Loss)		Accumulated Deficit		Non- Controlling Interest		Total Stockholders’ Equity
	Shares	Amount
Balance at March 31, 2023	610,487	$	60	$	2,424,340	$	62	$	(2,176,620)	$	(2,660)	$	245,182
Issuance of common stock upon exercise of stock options	2,308	—		5,227		—		—		—		5,227


Vesting of restricted stock units	3,506	—		—		—		—		—		—

Stock-based compensation expense	—	—		212,362		—		—		—		212,362

Other comprehensive income/(loss)	—	—		—		(14,157)		—		427		(13,730)
Net loss	—	—		—		—		(282,777)		(2,064)		(284,841)
Balance at June 30, 2023	616,301	$	60	$	2,641,929	$	(14,095)	$	(2,459,397)	$	(4,297)	$	164,200

Six Months Ended June 30, 2023


	Class A and Class B Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income/(Loss)		Accumulated Deficit		Non- Controlling Interest		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2022	604,674	$	59	$	2,213,603	$	671	$	(1,908,307)	$	(991)	$	305,035
Issuance of common stock upon exercise of stock options	4,571	1		11,139		—		—		—		11,140

Issuance of common stock under Employee Stock Purchase Plan	639	—		19,921		—		—		—		19,921
Vesting of restricted stock units	6,417	—		—		—		—		—		—

Stock-based compensation expense	—	—		397,266		—		—		—		397,266

Other comprehensive income/(loss)	—	—		—		(14,766)		—		393		(14,373)
Net loss	—	—		—		—		(551,090)		(3,699)		(554,789)
Balance at June 30, 2023	616,301	$	60	$	2,641,929	$	(14,095)	$	(2,459,397)	$	(4,297)	$	164,200

The accompanying notes are an integral part of these condensed consolidated financial statements.

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ROBLOX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Consolidated net loss	$	(479,115)	$	(554,789)
Adjustments to reconcile net loss including noncontrolling interests to net cash and cash equivalents provided by operations:
Depreciation and amortization expense	106,513		100,011
Stock-based compensation expense	492,393		397,266
Operating lease non-cash expense	57,488		44,753
(Accretion)/amortization on marketable securities, net	(39,533)		(31,745)
Amortization of debt issuance costs	679		651
Impairment expense, (gain)/loss on investment and other asset sales, and other, net	443		6,169
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	160,045		122,628
Prepaid expenses and other current assets	(12,955)		(6,159)
Deferred cost of revenue	(52,615)		(38,597)
Other assets	(6,666)		(6,691)
Accounts payable	(8,828)		1,576
Accrued expenses and other current liabilities	(23,516)		(22,344)
Developer exchange liability	15,423		(11,156)
Deferred revenue	197,650		229,155
Operating lease liabilities	(29,329)		(30,843)
Other long-term liabilities	12,318		2,286
Net cash and cash equivalents provided by operating activities	390,395		202,171
Cash flows from investing activities:
Acquisition of property and equipment	(86,381)		(202,274)
Payments related to business combination, net of cash acquired	(2,000)		—
Purchases of intangible assets	(1,370)		(13,500)
Purchases of investments	(1,866,782)		(3,042,760)
Maturities of investments	1,589,320		324,010
Sales of investments	233,306		229,279
Net cash and cash equivalents used in investing activities	(133,907)		(2,705,245)
Cash flows from financing activities:
Proceeds from issuance of common stock	37,247		31,107

Proceeds from debt issuances	—		14,700

Financing payments related to acquisitions	(4,450)		(750)

Net cash and cash equivalents provided by financing activities	32,797		45,057
Effect of exchange rate changes on cash and cash equivalents	(1,345)		807
Net increase/(decrease) in cash and cash equivalents	287,940		(2,457,210)
Cash and cash equivalents
Beginning of period	678,466		2,977,474
End of period	$	966,406	$	520,264



Supplemental disclosure of noncash investing and financing activities:
Property and equipment additions in accounts payable and accrued expenses and other liabilities	$	23,470	$	41,263

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Roblox Corporation

Notes to Unaudited Condensed Consolidated Financial Statements

1. Organization and Description of Business

Description of Business

Roblox Corporation (the “Company” or “Roblox”) was incorporated under the laws of the state of Delaware in March 2004. The Company operates a free to use immersive platform for connection and communication (the “Roblox Platform” or “Platform”) where people come to create, play, work, learn, and connect with each other in experiences built by our global community of creators. Users are free to immerse themselves in experiences on the Roblox Platform and can acquire experience-specific enhancements or avatar items by using purchased Robux, our virtual currency. Any user can be a developer or creator on the Platform using Roblox Studio, a set of free software tools. Developers and creators build the experiences that are published on Roblox and can earn Robux by monetizing their experience, creating and selling or reselling avatar items, or creating and selling Roblox Studio plugins.

2. Basis of Presentation and Summary of Significant Accounting Policies

Fiscal Year

The Company’s fiscal year ends on December 31. For example, references to fiscal year 2024 and 2023 refer to the fiscal year ending December 31, 2024 and December 31, 2023, respectively.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), and applicable rules and regulations of the Securities and Exchange Commission (“SEC”), regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with U.S. GAAP. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 21, 2024.

In the Company’s opinion, the information contained herein reflects all adjustments necessary for a fair presentation of the Company’s results of operations, financial position, cash flows, and stockholders’ equity. All such adjustments are of a normal, recurring nature. The results of operations for the three and six months ended June 30, 2024 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2024 or any other interim period.

For a discussion of the Company’s significant accounting policies, refer to the header “Foreign Currency Transactions” below, as well as the significant accounting policies as described in the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 21, 2024.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and subsidiaries over which the Company has control. All intercompany transactions and balances have been eliminated. The condensed consolidated financial statements include 100% of the accounts of wholly owned and majority owned subsidiaries, and the ownership interest of minority investors is recorded as noncontrolling interest.

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Use of Estimates

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in the condensed consolidated financial statements include, but are not limited to, the estimated period of time the virtual items are available to the user, which is estimated as the average lifetime of a paying user, and the estimated amount of consumable and durable virtual items purchased for which the Company lacks specific information that is used for revenue recognition, the estimated amount of expected breakage related to prepaid card sales, useful lives of property and equipment and intangible assets, fair value of assets and liabilities acquired through acquisitions, accrued liabilities (including accrued developer exchange fees), contingent liabilities, valuation of deferred tax assets and liabilities, stock-based compensation expense, the discount rate used in measuring our operating lease liabilities, the carrying value of operating lease right-of-use assets, evaluation of recoverability of goodwill, intangible assets and long-lived assets, and as necessary, estimates of fair value to measure impairment losses. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. Actual results could differ from those estimates and any such differences may be material to the condensed consolidated financial statements. To the extent that there are material differences between these estimates and actual results, the Company’s condensed consolidated financial statements will be affected.

Change in Accounting Estimate

At the onset of the second quarter of 2024, we updated our estimated paying user life from 28 months to 27 months. Based on the carrying amount of deferred revenue and deferred cost of revenue as of March 31, 2024, the change resulted in an increase in revenue and cost of revenue during the three months ended June 30, 2024 by $58.9 million and $12.4 million, respectively. It is estimated that this change will increase our fiscal year 2024 revenue and cost of revenue by $98.0 million and $20.4 million, respectively.

The estimated paying user life was 28 months during the three and six months ended June 30, 2023.

Refer to the heading “Basis of Presentation and Summary of Significant Accounting Policies — Revenue Recognition Policy” as described in the Company’s consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 21, 2024, for a complete discussion on the Company’s revenue recognition policies.

Foreign Currency Transactions

Beginning January 1, 2024, the functional currency of certain non-U.S. dollar functional currency international subsidiaries was re-assessed from the U.S. dollar to the local currency that the international subsidiary operates in. Prior to January 1, 2024, the functional currency of the Company’s international subsidiaries was primarily the U.S. dollar. The effects of the changes in functional currency were not significant to our condensed consolidated financial statements.

The Company translates the financial statements of non-U.S. dollar functional currency subsidiaries to U.S. dollars using the period-end exchange rate for assets and liabilities and the average exchange rate for the period for revenues and expenses. The effects of foreign currency translation are included in stockholders’ equity and periodic movements are summarized as a line item in the condensed consolidated statements of comprehensive loss.

The Company reflects foreign exchange transaction gains and losses resulting from the conversion of the transaction currency to the functional currency, which includes gains and losses from the remeasurement of assets and liabilities, as a component of other income/(expense), net.

Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which requires public entities to disclose expanded information about their reportable segment(s)’ significant expenses and other segment items on an interim and annual basis. The ASU does not change how a public entity identifies or aggregates its operating segments. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The ASU is required to be applied retrospectively to all prior periods presented in the financial statements once adopted. The Company is evaluating the disclosure requirements related to the new standard.

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In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which requires public entities to disclose specific tax rate reconciliation categories, as well as income taxes paid disaggregated by jurisdiction, amongst other disclosure enhancements. The ASU is effective for financial statements issued for annual periods beginning after December 15, 2024, with early adoption permitted. The ASU can be adopted on a prospective or retrospective basis. The Company is evaluating the disclosure requirements related to the new standard.

3. Revenue from Contracts with Customers

The following table summarizes revenue by region based on the billing country of users (in thousands, except percentages):


	Three Months Ended June 30,
	2024				2023
	Amount		Percentage of Revenue		Amount		Percentage of Revenue
United States and Canada (1)	$	565,867	63	%	$	439,523	65	%
Europe	163,407		18		123,532		18
Asia-Pacific, including Australia and New Zealand	95,055		11		69,102		10
Rest of world	69,214		8		48,609		7
Total	$	893,543	100	%	$	680,766	100	%


	Six Months Ended June 30,
	2024				2023
	Amount		Percentage of Revenue		Amount		Percentage of Revenue
United States and Canada (1)	$	1,075,431	63	%	$	865,286	65	%
Europe	308,971		18		242,062		18
Asia-Pacific, including Australia and New Zealand	180,329		11		134,230		10
Rest of world	130,112		8		94,532		7
Total	$	1,694,843	100	%	$	1,336,110	100	%

(1)The Company’s revenues in the United States were 59% of consolidated revenue for each of the three and six months ended June 30, 2024 and were 60% and 61% for the three and six months ended June 30, 2023, respectively.

No individual country, other than the United States, exceeded 10% of the Company’s consolidated revenue for any period presented.

Durable virtual items accounted for 92% of virtual item-related revenue for each of the three and six months ended June 30, 2024, respectively, and 92% and 91% in the three and six months ended June 30, 2023, respectively. Consumable virtual items accounted for 8% of virtual item-related revenue for each of the three and six months ended June 30, 2024, respectively, and 8% and 9% in the three and six months ended June 30, 2023, respectively.

Deferred Revenue

The Company receives payments from its users based on the payment terms established in its contracts. Such payments are initially recorded to deferred revenue and are recognized into revenue as the Company satisfies its performance obligations. The aggregate amount of revenue allocated to unsatisfied performance obligations is included in our deferred revenue balances.

The increase in deferred revenue for the six months ended June 30, 2024 was driven by sales during the period exceeding revenue recognized from the satisfaction of our performance obligations, which includes the revenue recognized during the period that was included in the current portion of deferred revenue at the beginning of the period. During the six months ended June 30, 2024, we recognized $1,388.6 million of revenue that was included in the current deferred revenue balance as of December 31, 2023.

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4. Leases

On February 7, 2024, the Company executed a lease assignment as sub-lessee pursuant to which the Company will sublease approximately 133,137 square feet of office space in San Mateo, California for a lease term of approximately four years (the “2024 Sub-Lessee Agreement”). Concurrent with the execution of the 2024 Sub-Lessee Agreement, the Company executed a sublease as sub-lessor pursuant to which it will sublease approximately 61,773 square feet of its San Mateo, California corporate headquarters to the sub-lessee for a lease term of approximately three years (the “2024 Sub-Lessor Agreement”).

The total lease payments due by the Company over the sublease term under the 2024 Sub-Lessee Agreement are $38.9 million and the Company took possession of the assigned space in April 2024. The total lease payments due to the Company over the sublease term under the 2024 Sub-Lessor Agreement are approximately $13.0 million and the Company provided possession to the sub-lessee in April 2024.

The Company also took possession of data center leased space in the first quarter of 2024, with lease payments – net of leasehold incentives – totaling $95.4 million over a seven year lease term.

5. Cash Equivalents and Investments

The following is a summary of the Company’s cash equivalents and short-term and long-term investments (in thousands):


	As of June 30, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Short-Term Investments		Long-Term Investments
Debt Securities
Level 1
Money market funds	$	907,229	$	—	$	—	$	907,229	$	907,229	$	—	$	—
U.S. Treasury securities	1,711,715		235		(5,860)		1,706,090		—		1,158,402		547,688
Subtotal	2,618,944		235		(5,860)		2,613,319		907,229		1,158,402		547,688
Level 2
U.S. agency securities	323,932		10		(299)		323,643		—		47,453		276,190


Commercial paper	192,136		—		—		192,136		9,978		182,158		—
Corporate debt securities	422,521		660		(1,709)		421,472		—		56,215		365,257
Subtotal	938,589		670		(2,008)		937,251		9,978		285,826		641,447
Total Debt Securities	$	3,557,533	$	905	$	(7,868)	$	3,550,570	$	917,207	$	1,444,228	$	1,189,135
Equity Securities
Level 1
Mutual funds (1)							$	1,461	$	—	$	1,461	$	—
Total Equity Securities							$	1,461	$	—	$	1,461	$	—
Total Investments	$	3,557,533	$	905	$	(7,868)	$	3,552,031	$	917,207	$	1,445,689	$	1,189,135

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	As of December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cash Equivalents		Short-Term Investments		Long-Term Investments
Debt Securities
Level 1
Money market funds	$	614,888	$	—	$	—	$	614,888	$	614,888	$	—	$	—
U.S. Treasury securities	1,692,700		2,007		(2,547)		1,692,160		—		1,155,218		536,942
Subtotal	2,307,588		2,007		(2,547)		2,307,048		614,888		1,155,218		536,942
Level 2
U.S. agency securities	286,007		27		(197)		285,837		—		137,151		148,686


Commercial paper	184,465		—		—		184,465		14,827		169,638		—
Corporate debt securities	409,037		2,066		(1,262)		409,841		—		52,070		357,771
Subtotal	879,509		2,093		(1,459)		880,143		14,827		358,859		506,457
Total Debt Securities	$	3,187,097	$	4,100	$	(4,006)	$	3,187,191	$	629,715	$	1,514,077	$	1,043,399
Equity Securities
Level 1
Mutual funds (1)							$	731	$	—	$	731	$	—
Total Equity Securities							$	731	$	—	$	731	$	—
Total Investments	$	3,187,097	$	4,100	$	(4,006)	$	3,187,922	$	629,715	$	1,514,808	$	1,043,399

(1)The equity securities relate to the Company’s nonqualified deferred compensation plan and are held in a rabbi trust. Refer to Note 14, “Employee and Director Benefits”, to the notes to the condensed consolidated financial statements for more information.

As of June 30, 2024, all of the Company’s short-term debt investments have contractual maturities of one year or less and all of the Company’s long-term debt investments have contractual maturities between one and five years.

Changes in market interest rates, credit risk of borrowers and overall market liquidity, amongst other factors, may cause our short-term and long-term debt investments to fall below their amortized cost basis, resulting in unrealized losses. For those debt securities in an unrealized loss position as of June 30, 2024, the unrealized losses were primarily driven by increases in interest rates following the date of purchase and the Company does not intend to sell, nor is it more likely than not it will be required to sell, such securities before recovering the amortized cost basis.

The following table presents fair values and gross unrealized losses, aggregated by investment category and the length of time that individual securities have been in a continuous loss position (in thousands):


	As of June 30, 2024
	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

U.S. Treasury securities	$	1,046,150	$	(1,445)	$	350,312	$	(4,415)	$	1,396,462	$	(5,860)
U.S. agency securities	276,175		(258)		32,458		(41)		308,633		(299)



Corporate debt securities	194,913		(903)		95,549		(806)		290,462		(1,709)
Total	$	1,517,238	$	(2,606)	$	478,319	$	(5,262)	$	1,995,557	$	(7,868)


	As of December 31, 2023
	Less Than 12 Months				12 Months or Greater				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses

U.S. Treasury securities	$	486,424	$	(2,547)	$	—	$	—	$	486,424	$	(2,547)
U.S. agency securities	182,475		(197)		—		—		182,475		(197)



Corporate debt securities	248,287		(1,262)		—		—		248,287		(1,262)
Total	$	917,186	$	(4,006)	$	—	$	—	$	917,186	$	(4,006)

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6. Acquisitions

Speechly, Inc.

On September 18, 2023 (the “Speechly Acquisition Date”), the Company acquired all outstanding equity interests of Speechly, Inc. and its wholly owned Finnish subsidiary Speechly Oy (together, “Speechly”). Speechly is a privately held company, that operates a speech recognition software focused on voice moderation. The acquisition has been accounted for as a business combination. The consideration totaled $10.1 million, which included (i) $4.8 million of cash paid on the Speechly Acquisition Date and (ii) $5.3 million of cash held back until certain post-acquisition conditions are satisfied.

The following table summarizes the Company’s preliminary allocation of the purchase consideration based on the fair value of assets acquired and liabilities assumed at the Speechly Acquisition Date (in thousands):


	September 18, 2023
Cash and cash equivalents	$	970
Other current assets acquired	111
Intangible assets, net
Developed technology, useful life of five years	2,800
Goodwill	7,536
Other current liabilities assumed	$	(1,117)
Other long-term liabilities assumed	(182)
Total purchase price	$	10,118

Goodwill is attributable to the assembled workforce and anticipated synergies arising from the acquisition. The goodwill recognized is not expected to be deductible for income tax purposes.

7. Goodwill and Intangible Assets

Goodwill

The following table represents the changes to goodwill during the six months ended June 30, 2024 (in thousands):


	Carrying Amount
Balance as of December 31, 2023	$	142,129

Foreign currency translation adjustments	(229)
Balance as of June 30, 2024	$	141,900

There are no accumulated impairment losses for any period presented.

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Intangible Assets

The following tables present details of the Company’s finite-lived intangible assets as of June 30, 2024 and December 31, 2023 (in thousands):


	As of June 30, 2024
	Gross Carrying Amount		Accumulated Amortization Expense		Net Carrying Amount
Developed technology	$	75,370	$	(46,975)	$	28,395
Patents	14,200		(1,400)		12,800
Assembled workforce	10,000		(9,042)		958
Trade name	500		(283)		217
Total intangible assets	$	100,070	$	(57,700)	$	42,370


	As of December 31, 2023
	Gross Carrying Amount		Accumulated Amortization Expense		Net Carrying Amount
Developed technology	$	75,455	$	(39,411)	$	36,044
Patents	14,200		(650)		13,550
Assembled workforce	10,000		(7,374)		2,626
Trade name	500		(233)		267
Total intangible assets	$	100,155	$	(47,668)	$	52,487

The above tables do not include $0.7 million and $0.6 million of indefinite lived intangible assets as of June 30, 2024 and December 31, 2023, respectively.

Amortization expense related to our finite-lived intangible assets was $5.0 million and $10.1 million for the three and six months ended June 30, 2024, respectively, and $4.5 million and $9.0 million for the three and six months ended June 30, 2023, respectively.

Expected future amortization expenses related to the Company’s finite-lived intangible assets as of June 30, 2024 are as follows (in thousands):


Year ending December 31:
Remainder of 2024	$	8,901
2025	15,710
2026	6,676
2027	3,112
2028	1,922
Thereafter	6,049
Total remaining amortization	$	42,370

8. Other Balance Sheet Components

Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	As of
	June 30, 2024		December 31, 2023
Prepaid expenses	$	60,268	$	48,555
Accrued interest receivable	18,788		14,697
Other current assets	8,044		11,297
Total prepaid expenses and other current assets	$	87,100	$	74,549

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Property and equipment, net

Property and equipment, net, consisted of the following (in thousands):


	As of
	June 30, 2024		December 31, 2023
Servers and related equipment and software	$	919,489	$	914,989
Computer hardware and software licenses	46,633		43,732
Furniture and fixtures	1,434		520
Leasehold improvements	102,513		101,785
Construction in progress	138,586		77,043
Total property and equipment	1,208,655		1,138,069
Less accumulated depreciation and amortization expense	(533,580)		(442,709)
Property and equipment—net	$	675,075	$	695,360

Construction in progress primarily relates to leasehold improvements for the Company’s leased office buildings and network equipment infrastructure to support the Company’s data centers.

Depreciation and amortization expense of property and equipment was $47.8 million and $96.5 million for the three and six months ended June 30, 2024, respectively, and $48.1 million and $91.0 million for the three and six months ended June 30, 2023, respectively.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	As of
	June 30, 2024		December 31, 2023
Accrued operating expenses	$	58,229	$	51,921
Short term operating lease liabilities	136,958		111,293
Accrued interest on the 2030 Notes	6,458		6,458
Taxes payable	47,425		59,632
Accrued compensation and other employee related liabilities	16,176		32,125
Other current liabilities	4,593		9,692
Total accrued expenses and other current liabilities	$	269,839	$	271,121

9. Debt

2030 Notes

On October 29, 2021, the Company issued $1.0 billion aggregate principal amount of its 3.875% Senior Notes due 2030 (the “2030 Notes”). The 2030 Notes mature on May 1, 2030. The 2030 Notes bear interest at a rate of 3.875% per annum. Interest on the 2030 Notes is payable semi-annually in arrears on May 1 and November 1 of each year, commencing on May 1, 2022.

The aggregate proceeds from offering of the 2030 Notes were approximately $987.5 million, after deducting lenders costs and other issuance costs incurred by the Company. The issuance costs of $12.5 million are amortized into interest expense using the effective interest method over the term of the 2030 Notes.

The Company may voluntarily redeem the 2030 Notes, in whole or in part, under the following circumstances:

(1)at any time prior to November 1, 2024, the Company may on any one or more occasions redeem up to 40% of the aggregate principal amount of the 2030 Notes at a redemption price of 103.875% of the principal amount including accrued and unpaid interest, if any, with the net cash proceeds of certain equity offerings; provided that (1) at least 50% of the aggregate principal amount of 2030 Notes originally issued remains outstanding immediately after the occurrence of such redemption (excluding 2030 Notes held by the Company and its subsidiaries); and (2) the redemption occurs within 180 days of the date of the closing of such equity offerings.

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(2)on or after November 1, 2024, the Company may redeem all or a part of the 2030 Notes at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date:


Year	Percentage
2024	101.938	%
2025	100.969	%
2026 and thereafter	100.000	%

(3)at any time prior to November 1, 2024, the Company may redeem all or a part of the 2030 Notes at a redemption price equal to 100% of the principal amount of 2030 Notes redeemed, including accrued and unpaid interest, if any, plus the applicable “make-whole” premium set forth in the indenture governing the 2030 Notes (the “Indenture”) as of the date of such redemption; and

(4)in connection with any tender offer for the 2030 Notes, including an offer to purchase (as defined in the Indenture), if holders of not less than 90% in aggregate principal amount of the outstanding 2030 Notes validly tender and do not withdraw such notes in such tender offer and the Company (or any third party making such a tender offer in lieu of the Company) purchases all of the 2030 Notes validly tendered and not withdrawn by such holders, the Company (or such third party) will have the right, upon not less than 10, but not more than 60 days’ prior notice, given not more than 30 days following such purchase date to the holders of the 2030 Notes and the trustee, to redeem all of the 2030 Notes that remain outstanding following such purchase at a redemption price equal to the price offered to each holder of 2030 Notes (excluding any early tender or incentive fee) in such tender offer plus to the extent not included in the tender offer payment, accrued and unpaid interest, if any.

In certain circumstances involving a change of control triggering event (as defined in the Indenture), the Company will be required to make an offer to repurchase all, or at the holder’s option, any part, of each holder’s 2030 Notes at a repurchase price equal to 101% of the principal amount, plus accrued and unpaid interest, if any, to the applicable repurchase date.

The 2030 Notes are unsecured obligations and the Indenture contains covenants limiting the Company and its subsidiaries’ ability to: (i) create certain liens and enter into sale and lease-back transactions; (ii) create, assume, incur or guarantee certain indebtedness; or (iii) consolidate or merge with or into, or sell or otherwise dispose of all of substantially all of the Company and its subsidiaries’ assets to another person. These covenants are subject to a number of limitations and exceptions set forth in the Indenture and non-compliance with these covenants may result in the accelerated repayment of the 2030 Notes and any accrued and unpaid interest.

As of June 30, 2024, the Company was in compliance with all of its covenants under the Indenture.

The net carrying amount of the 2030 Notes, which is presented as a component of long-term debt in the Company’s condensed consolidated financial statements, was as follows (in thousands):


	As of
	June 30, 2024		December 31, 2023
2030 Notes
Principal	$	1,000,000	$	1,000,000
Unamortized issuance costs	(9,021)		(9,700)
Net carrying amount	$	990,979	$	990,300

Interest expense related to the 2030 Notes was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Contractual interest expense	$	9,688	$	9,688	$	19,376	$	19,376
Amortization of debt issuance costs	341		327		679		651
Total interest expense	$	10,029	$	10,015	$	20,055	$	20,027

The debt issuance costs for the 2030 Notes are amortized to interest expense over the term of the 2030 Notes using an annual effective interest rate of 4.05%.

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As of June 30, 2024 and December 31, 2023, the estimated fair value of the 2030 Notes was approximately $889.0 million and $891.8 million, respectively, determined based on the last trading price of the 2030 Notes during the reporting period (a Level 2 input).

Joint Venture Financing

Refer to Note 15, “Joint Venture”, in the notes to the condensed consolidated financial statements for additional information on debt issued by the Company’s consolidated subsidiary, Roblox China Holding Corp.

10. Commitments and Contingencies

Lease Commitments—The Company leases office facilities and space for data center operations under operating leases expiring in various years through 2035. Certain of these arrangements have free or escalating rent payment provisions and optional renewal clauses. All of the Company’s leases are accounted for as operating leases. There has been no material change in the Company’s lease commitments during the six months ended June 30, 2024, other than for lease commitments primarily related to office facilities and data centers in the ordinary course of business. See Note 4, “Leases” in the notes to the condensed consolidated financial statements for additional information.

Purchase Obligations—Non-cancellable contractual purchase obligations primarily consist of contracts associated with data center and software vendors. There has been no material change in the Company’s purchase obligations during the six months ended June 30, 2024, other than non-cancelable purchase commitments made in the ordinary course of business, primarily related to data center and software vendors.

Letters of Credit—The Company has letters of credit in connection with its operating leases which are not reflected in the Company’s condensed consolidated balance sheets as of June 30, 2024 and December 31, 2023. There have been no material changes to the Company’s letters of credit during the three months ended June 30, 2024.

Legal Proceedings—The Company is and, from time to time may in the future become, involved in legal proceedings, claims and litigation in the ordinary course of business.

As of June 30, 2024 and December 31, 2023, the Company accrued for immaterial losses related to litigation matters that the Company believes to be probable and for which an amount of loss can be reasonably estimated. The Company considered the progress of these cases, the opinions and views of its legal counsel and outside advisors, its experience and settlements in similar cases, and other factors in arriving at the conclusion that a potential loss was probable. The Company cannot determine a reasonable estimate of the maximum possible loss or range of loss for all of these matters given that they are at various stages of the litigation process and each case is subject to the inherent uncertainties of litigation. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings. The maximum amount of liability that may ultimately result from any of these matters cannot be predicted with absolute certainty and the ultimate resolution of one or more of these matters could ultimately have a material adverse effect on our operations.

On August 1, 2023, a putative class action was filed against the Company in the United States District Court for the Northern District of California, captioned Colvin v. Roblox (the “Colvin matter”), asserting various claims arising from allegations that minors used third-party virtual casinos to gamble Robux. On December 15, 2023, the Company filed a motion to dismiss and on March 26, 2024, the motion to dismiss was granted in part and denied in part, allowing plaintiffs’ negligence and California Unfair Competition Law claims to proceed. On March 28, 2024, a supplemental order clarified that plaintiffs’ claims for unjust enrichment and equitable relief could proceed as well. On April 9, 2024, plaintiffs filed an amended complaint realleging the California Consumer Legal Remedies Act and New York General Business Law claims that had been dismissed.

Separately, on March 14, 2024, Gentry v. Roblox was filed in the United States District Court for the Northern District of California premised on substantially identical allegations as the Colvin matter. On April 18, 2024, the Gentry v. Roblox matter was consolidated with the Colvin matter. Plaintiffs filed a consolidated complaint on April 23, 2024. The consolidated complaint seeks monetary damages, including actual, punitive, and statutory damages, restitution, attorneys’ fees and costs, and declaratory and injunctive relief. The Company filed a motion to dismiss the consolidated complaint on May 14, 2024 and the Court's decision on the motion to dismiss is pending.

The Company intends to defend itself vigorously against all claims asserted. At this time, the Company is unable to reasonably estimate the loss or range of loss, if any, arising from the above-referenced matter.

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Indemnification—In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. To date, the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. To date, the Company has not incurred any material costs and has not accrued any liabilities related to such obligations. The Company also has directors’ and officers’ insurance.

11. Stockholders’ Equity

As of June 30, 2024, the Company had 4,935.0 million shares of Class A common stock authorized, with a par value of $0.0001 per share, 65.0 million shares of Class B common stock authorized, with a par value of $0.0001 per share, and 100.0 million shares of preferred stock authorized, with a par value of $0.0001 per share. Holders of Class A common stock are entitled to one vote per share. Holders of Class B common stock are entitled to 20 votes per share.

During the first quarter of 2024 and 2023, respectively, 1.4 million and 1.3 million shares of Class B common stock held by entities affiliated with Mr. Baszucki, Founder, President, CEO and Chair of our Board of Directors (the “CEO”) were converted to Class A common stock.

Class A and Class B common stock are referred to as common stock throughout the notes to the condensed consolidated financial statements, unless otherwise noted.

The Company had reserved shares of common stock for future issuance as follows (in thousands):


	As of
	June 30, 2024	December 31, 2023
Stock options outstanding	35,718	40,159
Restricted Stock Units (“RSUs”) outstanding	37,702	39,846
Performance Stock Units (“PSUs”) (1)	2,304	905
CEO Long-Term Performance Award (1)(2)	—	11,500
2020 Equity Incentive Plan

Roblox Corp [RBLX] Filings
10-Q	[2024-08-02]
10-Q	[2024-05-09]
10-K	[2024-02-21]
10-Q	[2023-11-08]
10-Q	[2023-08-09]
10-Q	[2023-05-10]
10-K	[2023-02-28]
10-Q	[2022-11-09]
10-Q	[2022-08-10]
10-Q	[2022-05-11]
10-K	[2022-02-25]
10-Q	[2021-11-09]
10-Q	[2021-08-16]
10-Q	[2021-05-13]
S-1	[2020-11-19]