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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 March 31, 2022
OR
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 May 2, 2022, the registrant had 541,856,189 shares of Class A common stock and 51,337,302 of Class B common stock, each with a par value of $0.0001 per share, outstanding.


Table of Contents
  Page
PART I.
Item 1.
Item 2.
Item 3.
Item 4.
PART II.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
i

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,” “intend,” “shall,” “project,” “contemplate,” 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, operating expenses, 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 international users, developers, and creators;
the sufficiency of our cash and cash equivalents to meet our liquidity needs;
the demand for our platform in general;
our ability to retain and increase our number of users, developers, and creators;
the impact of the COVID-19 pandemic and the easing of restrictions related to the COVID-19 pandemic, including on our users’, developers’, and creators’ usage and spending habits;
challenges associated with our 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;
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;
the functionality and economics of our platform on mobile operating systems;
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;
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 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;
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 ability, through our joint venture, to successfully publish and operate Luobulesi in China;
our expectations surrounding Robux as an attractive virtual currency and incentives to reinvest Robux in the platform;
the impact of foreign currency exchange rates on results of operations;
economic, seasonal, and industry trends;
the impact of geopolitical events, including the war in Ukraine;
1

our expectations regarding new accounting standards;
our ability to achieve and maintain effective control over financial reporting;
our estimates related to stock-based compensation expenses;
our indebtedness may limit our operations and our use of our cash flow, and any failure to comply with the covenants that apply to our indebtedness could adversely affect our liquidity and financial condition; 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.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
2

SPECIAL NOTE REGARDING OPERATING METRICS
We manage our business by tracking several operating metrics, including daily active users, or DAUs, hours engaged, and average bookings per DAU, or ABPDAU. 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.
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 DAUs or other metrics may not be comparable to those in prior periods. Additionally, the accuracy of these metrics may be affected by certain factors relating to user activity and systems and our ability to identify and detect attempts to replicate legitimate user activity, often referred to as botting. 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”.
Daily active users, or 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, so 30 days, for example, in the month of September.
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. We do not collect the geographic location of our Xbox users, which are grouped into Rest of World DAUs for the purposes of our reporting. The platform data collected is based on the platform associated with the account when an account is initially registered on Roblox. The demographic data collected is self-reported to us and may not always accurately represent the actual attributes of the user.
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 DAU metric is 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 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 on our platform, including through unauthorized third-party websites or “cheating” programs.”
3

Hours engaged
We define hours engaged as the time spent by our users on the platform, which includes time spent in experiences, which refer to the titles that have been created by developers, and within platform features such as chat and avatar personalization. Users can personalize the size and body shape of their avatars as well as equip their avatars with items acquired from the Avatar Marketplace, a marketplace that allows users to acquire items such as clothing, gear, simulated gestures, or emotes, and other accessories.
We calculate total hours engaged as the aggregate of user session lengths in a given period. We determine this length of time using internal company systems that track user activity on our platform, and aggregate discrete activities into a user session.
4

PART I—FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
ROBLOX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par values)
(unaudited)
 As of
 March 31, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents$3,132,964 $3,004,300 
Accounts receivable—net of allowances179,732 307,349 
Prepaid expenses and other current assets43,123 32,091 
Deferred cost of revenue, current portion398,194 406,025 
Total current assets3,754,013 3,749,765 
Property and equipment—net338,879 271,352 
Operating lease right-of-use assets286,242 221,285 
Deferred cost of revenue, long-term159,404 137,524 
Intangible assets, net55,854 59,666 
Goodwill118,071 118,071 
Other assets3,368 2,933 
Total assets$4,715,831 $4,560,596 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable$54,295 $64,395 
Accrued expenses and other current liabilities223,323 180,769 
Developer exchange liability149,816 163,906 
Deferred revenue—current portion1,747,294 1,758,022 
Total current liabilities2,174,728 2,167,092 
Deferred revenue—net of current portion724,359 616,834 
Operating lease liabilities259,841 194,616 
Long-term debt, net988,034 987,723 
Other long-term liabilities1,408 1,408 
Total liabilities4,148,370 3,967,673 
Commitments and contingencies (Note 11)
Stockholders’ Equity
Common stock, $0.0001 par value; 5,000,000 and 5,000,000 authorized as of March 31, 2022, and December 31, 2021, respectively, 592,196 and 585,878 shares issued and outstanding as of March 31, 2022, and December 31, 2021, respectively; Class A common stock—4,935,000 and 4,935,000 shares authorized as of March 31, 2022, and December 31, 2021, respectively, 540,858 and 534,541 shares issued and outstanding as of March 31, 2022, and December 31, 2021, respectively; Class B common stock—65,000 and 65,000 shares authorized as of March 31, 2022, and December 31, 2021, respectively, 51,337 and 51,337 shares issued and outstanding as of March 31, 2022, and December 31, 2021, respectively
59 58 
Additional paid-in capital1,705,201 1,568,638 
Accumulated other comprehensive income/(loss)
(30)62 
Accumulated deficit(1,144,143)(983,941)
Total Roblox Corporation stockholders’ equity561,087 584,817 
Noncontrolling interests6,374 8,106 
Total stockholders’ equity567,461 592,923 
Total liabilities and stockholders’ equity$4,715,831 $4,560,596 
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

ROBLOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
 Three Months Ended March 31,
 20222021
Revenue$537,134 $386,976 
Cost and expenses:
Cost of revenue(1)
135,632 97,937 
Developer exchange fees147,122 118,938 
Infrastructure and trust & safety141,355 94,136 
Research and development177,762 96,644 
General and administrative57,772 94,375 
Sales and marketing29,102 20,002 
Total cost and expenses688,745 522,032 
Loss from operations(151,611)(135,056)
Interest income245 5 
Interest expense(9,999) 
Other income/(expense), net(379)(1,050)
Loss before income taxes(161,744)(136,101)
Provision for/(benefit from) income taxes276 2 
Consolidated net loss(162,020)(136,103)
Net loss attributable to the noncontrolling interest(1,818)(1,886)
Net loss attributable to common stockholders$(160,202)$(134,217)
Net loss per share attributable to common stockholders, basic and diluted$(0.27)$(0.46)
Weighted-average shares used in computing net loss per share attributable to common stockholders—basic and diluted588,521 291,074 
(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.
6

ROBLOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
(unaudited)
 Three Months Ended March 31,
 20222021
Consolidated net loss$(162,020)$(136,103)
Other comprehensive loss:
Foreign currency translation adjustments(6) 
Other comprehensive loss, net of tax(6) 
Total comprehensive loss including noncontrolling interests(162,026)(136,103)
Less: net loss attributable to noncontrolling interests(1,818)(1,886)
Less: cumulative translation adjustments attributable to noncontrolling interests86  
Total comprehensive loss attributable to noncontrolling interests(1,732)(1,886)
Total comprehensive loss attributable to common stockholders$(160,294)$(134,217)
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

ROBLOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY/((DEFICIT)
(in thousands)
(unaudited)
Three Months Ended March 31, 2022
 Convertible
Preferred Stock
Class A and
Class B
Common Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
(Loss) Income
Accumulated
Deficit
Non-
controlling
Interest
Total
Stockholders’
Equity
 SharesAmountSharesAmount
Balance at December 31, 2021  585,878 $58 $1,568,638 $62 $(983,941)$8,106 $592,923 
Issuance of common stock upon exercise of stock options— — 4,150 1 10,175 — —  10,176 
Issuance of common stock under ESPP— — 335 — 14,243 — — — 14,243 
Release of restricted stock units— — 1,808 — — — — — — 
Withholding taxes related to net share settlement of
restricted stock units
— — (3)— (150)— — — (150)
Exercise of common stock warrants— — 30 — 102 — — — 102 
Others— — (2)— (102)— — — (102)
Stock-based compensation— — — — 112,295 — — — 112,295 
Cumulative translation adjustments— — — — — (92)— 86 (6)
Net loss— — — — — — (160,202)(1,818)(162,020)
Balance at March 31, 2022  592,196 $59 $1,705,201 $(30)$(1,144,143)$6,374 $567,461 
Three Months Ended March 31, 2021
 Convertible
Preferred Stock
Class A and
Class B
Common Stock
Additional
Paid-In
Capital
Accumulated
Other
Comprehensive
(Loss) Income
Accumulated
Deficit
Non-
controlling
Interest
Total
Stockholders’
Equity/(deficit)
 SharesAmountSharesAmount
Balance at December 31, 2020337,235 $344,827 201,327 $20 $239,792 $90 $(492,290)$20,007 $(232,381)
Issuance of common stock upon exercise of stock options— — 18,443 2 30,219 — — — 30,221 
Issuance of Series H preferred stock, net11,889 534,286 — — — — — — — 
Conversion of convertible preferred stock to common stock in connection with the direct listing(349,124)(879,113)349,124 35 879,078 — — — 879,113 
Stock-based compensation— — — — 50,744 — — — 50,744 
Other— — — — —  — — — 
Cumulative translation adjustments— — — — —  —  — 
Net loss— — — — — — (134,217)(1,886)(136,103)
 Balance at March 31, 2021   568,894 $57 $1,199,833 $90 $(626,507)$18,121 $591,594 
The accompanying notes are an integral part of these condensed consolidated financial statements.
8

ROBLOX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
 Three Months Ended March 31,
 20222021
Cash flows from operating activities:
Consolidated net loss$(162,020)$(136,103)
Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operations:
Depreciation and amortization24,497 16,620 
Stock-based compensation expense112,295 50,744 
Operating lease non-cash expense13,997 10,044 
Other non-cash charges/(credits)(567)(52)
Amortization of debt issuance costs311  
Changes in operating assets and liabilities, net of effect of acquisitions
Accounts receivable128,183 13,256 
Accounts payable(3,768)(782)
Prepaid expenses and other current assets(10,940)(10,967)
Other assets(435)(3,401)
Developer exchange liability(14,090)3,425 
Accrued expenses and other current liabilities(2,066)16,273 
Other long-term liability 304 
Operating lease liabilities(11,709)(2,069)
Deferred revenue96,797 269,439 
Deferred cost of revenue(14,049)(62,262)
Net cash provided by operating activities156,436 164,469 
Cash flows from investing activities:
Acquisition of property and equipment(51,790)(22,133)
Purchases of intangible assets (256)
Net cash used in investing activities(51,790)(22,389)
Cash flows from financing activities:
Proceeds from issuance of common stock24,328 30,221 
Payment of withholding taxes related to net share settlement of restricted stock units(150) 
Net proceeds from issuance of preferred stock 534,286 
Payment of debt issuance cost(154) 
Net cash provided by financing activities24,024 564,507 
Effect of exchange rate changes on cash and cash equivalents(6) 
Net increase in cash and cash equivalents128,664 706,587 
Cash and cash equivalents
Beginning of period3,004,300 893,943 
End of period$3,132,964 $1,600,530 
Supplemental disclosure of cash flow information:
Cash paid for interest  
Cash paid for income taxes  
Supplemental disclosure of noncash investing and financing activities:
Property and equipment additions in accounts payable and accrued expenses$86,813 $9,476 
Conversion of convertible preferred stock to common stock upon direct listing $879,113 
The accompanying notes are an integral part of these condensed consolidated financial statements.
9

Roblox Corporation
Notes to Unaudited Condensed Consolidated Financial Statements
1. Organization and Description of Business
Description of Business
Roblox Corporation, or the Company, was incorporated under the laws of the state of Delaware in March 2004. The Company operates a human co-experience platform, or the Platform, or Roblox Platform, where users interact with each other to explore and develop immersive, user generated, 3D experiences. Upon signing up for Roblox, a user personalizes their unique Roblox identity, or avatar. Users are then free to immerse themselves in experiences on Roblox and can acquire experience-specific enhancements or avatar items in the Company’s Avatar Marketplace using the virtual currency, or Robux. Any user can be a developer or creator on the Company’s platform using Roblox’s studio of software tools. Developers build the experiences that are published on Roblox and can earn Robux through micro transactions in their experiences, through engagement-based payouts, and by selling virtual items in the Roblox virtual economy.
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 2022 and 2021 refer to the fiscal year ending December 31, 2022 and December 31, 2021, respectively.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP and applicable rules and regulations of the U.S. Securities and Exchange Commission, or the SEC regarding interim financial reporting. Accordingly, they do not include all disclosures normally required in annual consolidated financial statements prepared in accordance with 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, 2021, which was filed with the SEC on February 25, 2022.
In our opinion, the information contained herein reflects all adjustments necessary for a fair presentation of our 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 months ended March 31, 2022 shown in this report are not necessarily indicative of the results to be expected for the full year ending December 31, 2022 or any other period.
There have been no material changes in our significant accounting policies as described in our consolidated financial statements for the year ended December 31, 2021 included in the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 25, 2022.
Certain reclassifications have been made to prior period balances in order to conform to the current period presentation within the cash flows from operating activities in the condensed consolidated statements of cash flows. These reclassifications were not material and had no impact on previously reported net cash used in operating activities in the Company’s Condensed Consolidated Statements of Cash Flows for any periods presented.
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.
Segments
The Company operates as a single operating and reportable segment, which is at the consolidated entity level. The chief operating decision maker, or CODM, of the Company is its Chief Executive Officer, or the CEO, who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated information of our revenue.
10

Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, the estimated period of time the virtual items are available to the user and the estimated amount of consumable and durable virtual items purchased for which the Company lacks specific information that we use for revenue recognition, useful lives of property and equipment and intangible assets, valuation of acquired goodwill and intangible assets, accrued liabilities (including accrued developer exchange fees), contingent liabilities, valuation of deferred tax assets and liabilities, stock-based compensation, the carrying value of operating lease right-of-use assets, evaluation of recoverability of long-lived assets and carrying value of goodwill. 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 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.
The novel coronavirus, or COVID-19, pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions. The full extent to which the COVID-19 pandemic will directly or indirectly impact the global economy, the lasting social effects, and impact on the Company’s business, results of operations, and financial condition will depend on future developments, such as COVID-19 vaccination rates and the availability of COVID-19 vaccines both globally and in the U.S., and the emergence of new strains of the virus, that are highly uncertain and cannot be accurately predicted. As of the date of issuance of the condensed consolidated financial statements, the Company is not aware of any specific event of circumstance related to COVID-19 that would require it to update its estimates or judgments or adjust the carrying value of its assets or liabilities. As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods.
Change in Accounting Estimate
In the first quarter of fiscal 2022, the Company completed its quarterly assessment of paying user life estimate based on which it recognizes revenue for durable virtual items. The average lifetime of a paying user estimate is calculated based on historical monthly retention data for each user cohort to project future participation on the Roblox Platform and is now estimated to be 25 months compared to the previous estimate of 23 months. This change in accounting estimate will be effective beginning fiscal year 2022. Based on the carrying amount of deferred revenue and deferred cost of revenue as of December 31, 2021, the change resulted in a decrease in revenue and cost of revenue during the three months ended March 31, 2022, by $82.5 million and $19.6 million, respectively. It is estimated that this change will decrease our fiscal year 2022 revenue and cost of revenue by $141.0 million and $32.6 million, respectively.
Concentration of Credit Risk and Significant Customers—Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivables. Cash and cash equivalents are deposited with high quality financial institutions and may, at times, exceed federally insured limits. Management believes that the financial institutions that hold the Company’s deposits are financially credit worthy and, accordingly, minimal credit risk exists with respect to those balances. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal interest rate risk.
The Company provides credit, in the normal course of business, to various customers, performs ongoing credit evaluations of its customers, and maintains allowances for potential credit losses on customers’ accounts when deemed necessary. The Company has not experienced any material credit losses to date.
The Company uses various distribution channels to collect payments from users. As of March 31, 2022, and December 31, 2021, two distribution channels accounted for 55% and 54% of our accounts receivable, respectively. One of the distribution channels accounted for 26% and 19% of our accounts receivable as of March 31, 2022 and December 31, 2021, respectively. The second distribution channel accounted for 29% and 35% of our accounts receivable as of March 31, 2022 and December 31, 2021, respectively.
One distribution channel processed 29% and 35% of our overall revenue transactions for the three months ended March 31, 2022, and 2021, respectively. A second distribution channel processed 26% and 18% of our overall revenue transactions for each of the three months ended March 31, 2022 and 2021.
11

3. Recent Accounting Pronouncements
Accounting Pronouncements Recently Adopted
In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses, Topic 326: Measurement of Credit Losses on Financial Instruments,” which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected, with further clarifications made more recently regarding the treatment of accrued interest, transfers between classifications for loans and debt securities, recoveries and the option to irrevocably elect the fair value option (on an instrument-by-instrument basis) for eligible financial assets at amortized costs. The new standard requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in prior GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. The Company adopted the guidance during the quarter ended September 30, 2021 on a modified retrospective basis as of January 1, 2021. The adoption of this standard did not result in any cumulative effect adjustment on our condensed consolidated financial statements upon adoption as of January 1, 2021.
In February 2016, the FASB issued ASU No. 2016-02, Topic 842, which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. The Company adopted the guidance on January 1, 2021 utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first quarter of 2021. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical lease classification, assessment on whether a contract was or contains a lease, and initial direct costs for leases that existed prior to January 1, 2021. The Company also elected to combine its lease and non-lease components and not recognize ROU assets and lease liabilities for leases with an initial term of 12 months or less. The Company did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of ROU assets. See Note 5, “Leases” to the Notes to Condensed Consolidated Financial Statements for more information.
In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements. This new guidance was effective for the Company beginning on January 1, 2021, the effective date and did not have a material impact on the Company’s condensed consolidated financial statements.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, or ASU 2019-12. The purpose of ASU 2019-12 is to reduce complexity in the accounting standards for income taxes by removing certain exceptions as well as clarifying certain allocations. This update removed the exception to the incremental approach for intra period tax allocation when there is a loss from continuing operation and income or a gain from other items (for example, discontinued operations or other comprehensive income). This update also addresses the split recognition of franchise taxes that are partially based on income between income-based tax and non-income-based tax. This guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company elected to adopt ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
The Company is in the process of reviewing all issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such accounting pronouncements will cause a material impact on its condensed consolidated financial statements.
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4. Revenue from Contracts with Customers
See Note 2, “Basis of Presentation and Summary of Significant Accounting Policies” to the Notes to Condensed Consolidated Financial Statements for information on the change in the paying user life estimate.
Disaggregation of Revenue
The following table summarizes revenue by region based on the billing country of users:
 Three Months Ended March 31,
 20222021
 AmountPercentage
of
Revenue
AmountPercentage
of
Revenue
United States and Canada (1)
$356,656 66 %$264,508 68 %
Europe99,202 18 72,602 19 
Asia-Pacific, including Australia and New Zealand45,990 9 28,312 7 
Rest of world35,286 7 21,554 6 
Total$537,134 100 %$386,976 100 %
(1)The Company’s net revenues in the U.S. were 62% and 64% of consolidated net revenues for the three months ended March 31, 2022, and 2021, respectively.
No individual country, other than those disclosed above, exceeded 10% of our total revenue for any period presented.
Durable virtual items accounted for 90% and 87% of Roblox Platform revenue for the three months ended March 31, 2022 and 2021, respectively.
Consumable virtual items accounted for 10% and 13% of Roblox Platform revenue for the three months ended March 31, 2022 and 2021, respectively.
Contract Balances and 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. Further, payments made by the Company’s users are collected by payment processors and remitted to us generally within 30 days.
Deferred revenue mostly consists of payments we receive from users in advance of revenue recognition. During the three months ended March 31, 2022 and 2021, $448.5 million and $299.1 million, respectively, of revenue was recognized that was included in the current portion deferred revenue balance at the beginning of the periods.
As of March 31, 2022, the aggregate amount of revenue allocated to unsatisfied performance obligations is included in our deferred revenue balances. As of March 31, 2022, the Company expects to recognize $1,747.3 million, as revenue over the next 12 months, and the remainder thereafter.
As mentioned above, the Company bills in advance of its performance obligations and as such, does not have unbilled receivables.
5. Leases
Adoption of Topic 842
Effective January 1, 2021, the Company adopted Topic 842 utilizing the modified retrospective transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. The primary impact for the Company was the balance sheet recognition of operating lease ROU assets and operating lease liabilities. The Company does not have any finance leases.
The Company has operating leases for real estate, and co-located data centers. During the three months ended March 31, 2022 and 2021, operating lease expense was approximately $17.3 million and $12.0 million, respectively. Variable lease cost, short-term lease cost and sublease income were immaterial during the three months ended March 31, 2022 and 2021. As of March 31, 2022, $53.3 million was included in accrued expenses and other current liabilities and $259.8 million as long-term operating lease liabilities.
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The following table presents maturity of lease liabilities under the Company’s non-cancelable operating leases as of March 31, 2022 (in thousands):
Remainder of 2022$47,382 
202362,645 
202457,039 
202549,234 
202639,809 
Thereafter103,609 
Total lease payments$359,718 
Less: interest(1)
46,554 
Present value of lease liabilities$313,164 
(1)Calculated using the interest rate for each lease.
In addition, the Company has executed operating leases for data centers, colocation space and facilities which have not commenced as of March 31, 2022. The legally binding minimum lease payments for these leases is $600.9 million with lease term ranging between three to thirteen years.
Of the above, approximately $446.2 million pertains to a new lease signed by the Company in San Mateo, California, on March 10, 2022 for office space of approximately 440,000 square feet consisting of two buildings for a term of approximately 13 years and 12 years, respectively with two renewal options of 5 years each. The possession of one of the buildings is expected to be obtained in the second quarter of 2022 and the other is expected to be obtained in the second quarter of 2023. In addition, the Company expects to receive $23.0 million each in tenant improvement allowances for each of the two buildings.
The following table presents supplemental information for leases that have commenced for the three months ended March 31, 2022 (in thousands, except for weighted average and percentage data):
Weighted average remaining lease term6.57
Weighted average discount rate3.9 %
Cash paid for amounts included in the measurement of lease liabilities(1)
$14,784
Lease liabilities arising from obtaining new ROU assets$79,671
(1)Does not include $0.2 million of leasehold incentives received from the landlord.
6. Fair Value Measurements
The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments consist of Level 1 assets. Level 1 assets include highly liquid money market funds that are included in cash and cash equivalents and the fair value is based on quoted prices in active markets for identical assets or liabilities. As of March 31, 2022, and December 31, 2021, there are no outstanding preferred stock warrants.
There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 during any of the periods presented below.
A summary of assets, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):
  Fair Value
  As of
Financial InstrumentFair Value
Hierarchy
March 31, 2022December 31, 2021
Financial Assets:
Money Market funds classified as cash equivalentsLevel 1$2,921,397 $2,853,055 
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Financial Liabilities
The Company’s financial liabilities that are not measured at fair value on a recurring basis consist of its 2030 Notes. Refer to Note 10, “Debt” to the Notes to Condensed Consolidated Financial Statements for more information.
The estimated fair value of the 2030 Notes was approximately $935.0 million and $1,016.2 million as of March 31, 2022 and December 31, 2021, respectively. While the 2030 Notes are recorded at cost, the fair values of the 2030 Notes were determined based on the trading price per $93.50 and $101.62 of the 2030 Notes on the last trading day of the reporting periods ended March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, the fair values of the 2030 Notes are categorized as a Level 2 measurement as they are not actively traded.
The Company measures goodwill and intangible assets at fair value on a nonrecurring basis when there are identifiable events or changes in circumstances that may have a significant adverse impact on the fair value of these assets.
7. Acquisitions
Guilded Acquisition
On August 16, 2021 (“Acquisition Date”), the Company acquired all outstanding equity interests of Guilded, Inc., (“Guilded”), a privately-held company, that operates a communications platform for connecting gaming communities. The acquisition has been accounted for as a business combination. The Acquisition Date fair value of the consideration transferred was $77.6 million, which consisted of $46.3 million paid in cash and 0.5 million shares of Class A common stock with a fair value of $31.3 million. The aggregate purchase consideration for Guilded was comprised of the following (in thousands):
 Fair Value
Cash paid$46,285 
Common stock issued22,744 
Replacement awards attributable to pre-acquisition service8,530 
Total purchase price$77,559 
The acquisition-related costs were not material and were recorded as general and administrative expenses in the Company’s condensed consolidated statements of operations for the three months ended September 30, 2021.
In connection with the acquisition, the Company entered into a stock-based consideration revesting agreement with the Guilded founder. The portion of the fair value of the common stock associated with pre-acquisition service of the Guilded founder represented a component of the total purchase consideration, as presented above. The remaining fair value of $8.5 million of these issued shares was excluded from the purchase price. These shares, which are subject to the recipients’ continued service with the Company, will be recognized ratably as stock-based compensation expense over the requisite service period of 3 years.
The total purchase consideration of the Guilded acquisition was allocated to the tangible and intangible assets acquired, and liabilities assumed, based upon their respective fair values as of the date of the acquisition. Management determined the preliminary fair values based on a number of factors, including a valuation from an independent third-party valuation firm. The excess of the purchase price over the net assets acquired was recorded as goodwill. Goodwill is attributable to the assembled workforce and anticipated synergies arising from the acquisition. The goodwill recorded in the acquisition is not expected to be deductible for income tax purposes.
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 Acquisition Date (in thousands):
 August 16, 2021
Cash and cash equivalents$593 
Goodwill58,503 
Identified intangible assets19,600 
Deferred tax liabilities(999)
Accrued expenses and other current liabilities(138)
Total purchase price$77,559 
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The following table presents details of the identifiable assets acquired at the Acquisition Date (in thousands):
Carrying
Amount
Estimated Useful Life (Years)
Developed Technology$19,100 5
Trade Name500 5
Total$19,600 
The Company expects to finalize the allocation of the purchase consideration as soon as practicable, pending finalization of income taxes. The Company currently expects to finalize this allocation during its third quarter ending September 30, 2022.
The acquisition is not material to the Company for the periods presented, and therefore, pro forma information has not been presented.
Other Acquisitions
During the year ended December 31, 2021, the Company completed two individually immaterial acquisitions. These transactions were accounted for as asset acquisitions as they did not meet the definition of a business. The acquired assets consisted entirely of assembled workforce and had a fair value of $8.5 million with an estimated useful life of 3 years. The aggregate purchase consideration consisted of $8.5 million, paid in cash.
8. Goodwill and Intangible Assets
Goodwill
Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets acquired.
The following table represents the changes to goodwill during the three months ended March 31, 2022 (in thousands):
 Carrying
Amount
Balance as of December 31, 2021
$118,071 
Addition from acquisition 
Balance as of March 31, 2022
$118,071 
There are no accumulated impairment losses for any period presented.
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Intangible Assets
Intangible assets are carried at cost less accumulated amortization.
The following tables present details of the Company’s intangible assets as of March 31, 2022 and December 31, 2021 (in thousands):
As of March 31, 2022
Gross Carrying AmountAccumulated AmortizationNet Carrying
Amount
Intangible assets with finite lives
Developed Technology$62,059 $(14,053)$48,006 
Assembled Workforce8,500 (1,667)6,833 
Trade Name500 (58)442 
Total Intangible Assets$71,059 $(15,778)$55,281 
As of December 31, 2021
Gross Carrying AmountAccumulated AmortizationNet Carrying
Amount
Intangible assets with finite lives
Developed Technology$62,059 $(11,233)$50,826 
Assembled Workforce8,500 (708)7,792 
Trade Name500 (25)475 
Total Intangible Assets$71,059 $(11,966)$59,093 
The above does not include $0.6 million of indefinite lived intangible assets as of March 31, 2022 and December 31, 2021.
Amortization expense was $3.8 million and $2.1 million for the three months ended March 31, 2022 and 2021, respectively.
See Note 6, “Fair Value Measurements” to the Notes to Condensed Consolidated Financial Statements for more information.
The expected future amortization expenses related to the intangible assets as of March 31, 2022 were as follows (in thousands):
Remainder of 2022$11,436 
202315,249 
202414,196 
202511,786 
20262,614 
Thereafter 
Total remaining amortization$55,281 
9. Other Balance Sheet Components
The Company had no restricted cash or short-term investments as of March 31, 2022 and December 31, 2021.
Prepaid expenses and other current assets
Prepaid expenses and other current assets consisted of the following (in thousands):
 As of
 March 31,
2022
December 31,
2021
Prepaid Expenses$37,548 $27,671 
Other current assets5,575 4,420 
Total prepaid expenses and other current assets$43,123 $32,091 
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Property and equipment, net
Property and equipment, net, consisted of the following (in thousands):
 As of
 March 31,
2022
December 31,
2021
Servers and related equipment$438,965 $361,227 
Computer hardware and software17,198 16,154 
Furniture and fixtures314 179 
Leasehold improvement33,239 30,482 
Construction in progress23,374 16,837 
Total property and equipment$513,090 $424,879 
Less accumulated depreciation and amortization(174,211)(153,527)
Property and equipment—net$338,879 $271,352 
Construction in progress includes costs mostly related to leasehold improvements related to the Company’s leased office buildings.
Depreciation and amortization expense was $20.7 million and $14.5 million for the three months ended March 31, 2022 and 2021, respectively.
Accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
 As of
 March 31,
2022
December 31,
2021
General accrued expenses$100,814 $56,134 
Short term operating lease liabilities53,323 51,303 
Accrued interest 2030 Notes16,469 6,781 
Taxes payable40,008 43,286 
Accrued compensation and other employee related liabilities2,692 14,511 
Other current liability10,017 8,754 
Total accrued expenses and other current liabilities$223,323 $180,769 
10. Debt
2030 Notes
Long-term debt consisted of the following (in thousands):
As of March 31, 2022
2030 Notes
Principal
$1,000,000 
Unamortized issuance costs
11,966 
Net carrying amount
$988,034 
On October 29, 2021, the Company issued $1.0 billion aggregate principal amount of its 3.875% Senior Notes due 2030, or 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 cost and other issuance costs, paid and payable by the Company. The issuance costs of $12.5 million will be amortized into interest expense using the effective interest method over the term of the 2030 Notes.
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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 offering.
(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:
YearPercentage
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, or the Indenture as of the date of such redemption.
(4)in connection with any tender offer for the 2030 Notes, including an offer to purchase, 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 101% of the aggregate 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 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.
For the three months ended March 31, 2022, the interest expense recognized in the condensed consolidated statements of operations related to the 2030 Notes was as follows (in thousands):
Three Months Ended March 31, 2022
Contractual interest expense
$9,688 
Amortization of debt issuance costs
311 
Total interest expense
$9,999 
For the three months ended March 31, 2022, the debt issuance costs for the 2030 Notes were amortized to interest expense over the term of the 2030 Notes using an annual effective interest rate of 4.05%.
As of March 31, 2022, the Company was in compliance with all of its covenants under the Indenture.
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11. Commitments and Contingencies
Lease Commitments—The Company leases office facilities and space for data center operations under operating leases expiring in various years through 2031. 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. See Note 5, “Leases” to the Notes to Condensed Consolidated Financial Statements for more information.
Letters of Credit— The Company has issued letters of credit in connection with our operating leases. The Company has not drawn down from the letters of credit and had $9.9 million available in aggregate as of each of the periods ended March 31, 2022, and December 31, 2021.
Legal Proceedings—The Company is and, from time to time may in the future become, involved in legal proceedings in the ordinary course of business.
On March 9, 2022, an alleged shareholder filed a putative securities class action against the Company and certain of our executives and directors, alleging violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 in connection with the registration statement for the Company’s direct listing. The complaint was filed in the Superior Court of California, County of San Mateo, and is captioned Matlick v. Roblox Corporation, et al., No. 22-CIV-01038. The complaint seeks damages and attorneys’ fees, as well as other relief. Management believes the claims are without merit and intends to defend this litigation vigorously. At this stage of the proceedings, the Company is unable to predict the outcome of this lawsuit and therefore cannot determine the likelihood of loss nor estimate a range of possible loss.
In addition, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business.
As of March 31, 2022, the Company has accrued for immaterial losses related to those 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 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. Although 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.
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. The Company also currently has directors’ and officers’ insurance.
Other Contractual Commitments—Other contractual commitments primarily consist of contracts associated with data center and IT operations in the ordinary course of business. There has been no material change in the Company's contractual obligations and commitments during the three months ended March 31, 2022, other than non-cancelable purchase commitments primarily related to data center and IT operations in the ordinary course of business and Company's new office lease in San Mateo, California since the fiscal year ended December 31, 2021. See Note 5, “Leases” to the Notes to Condensed Consolidated Financial Statements for more information on the new office lease.
12. Convertible Preferred Stock
In January 2021, the Company issued 11,888,886 shares of Series H convertible preferred stock to certain institutional accredited investors in a private placement at a purchase price of $45.00 per share for aggregate net proceeds of approximately $534.3 million. There was no underwriter or placement agent used in connection with this sale.
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The Company previously issued Series A, Series B, Series C, Series D, Series D-1, Series E, Series F, and Series G prior to 2021. In November 2020, pursuant to a conversion notice and an exchange agreement with entities affiliated with the Company’s Founder, President, CEO and Chair of the Company’s board of directors, all outstanding convertible preferred stock held by those entities were converted into our Class A common stock and thereafter all 57.3 million outstanding shares of Class A common stock held by those entities were exchanged for 57.3 million shares of Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion.
Immediately prior to the completion of the direct listing of the Company's Class A common stock, or the Direct Listing on the New York Stock Exchange, or NYSE, all outstanding shares of the Company’s convertible preferred stock converted into an aggregate of 349,123,976 shares of Class A common stock.
The following table summarizes the convertible preferred stock outstanding immediately prior to the conversion into common stock, and the rights and preferences of the Company’s respective series preceding the Direct Listing in March 2021 (in thousands except per share data):
Series    
Shares
Per share 
price
at issuance
Per share
conversion 
price
Aggregate
Liquidation
Preference
Carrying
Value of
Preferred
AuthorizedOutstanding
A28,000 16,358 $0.02 $0.02 $327 $313 
B45,532 45,532 $0.03 $0.03 1,070 1,054 
C95,290 95,290 $0.03 $0.03 2,935 4,150 
D54,860 54,215 $0.04 $0.04 2,150 2,097 
D-144,706 44,706 $0.09 $0.09 4,172 12,998 
E24,340 24,340 $1.03 $1.03 25,000 24,906 
F33,149 33,149 $4.53 $4.53 150,000 149,640 
G23,645 23,645 $6.34 $6.34 150,000 149,669 
H12,222 11,889 $45.0 $45.0 535,000 534,286 
Total361,744 349,124 $870,654 $879,113 
13. Stockholders’ Equity (Deficit)
Preferred Stock —The Company is authorized to issue 100 million shares of convertible preferred stock with a par value of $0.0001 per share.
Common Stock —The Company’s amended and restated certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock. As of March 31, 2022, the Company is authorized to issue 4,935.0 million shares of Class A common stock and 65.0 million shares of Class B common stock. Holders of Class A common stock and Class B common stock are entitled to dividends on a pro rata basis, when, as, and if declared by the Company’s board of directors, subject to the rights of the holders of the Company’s convertible preferred stock. Holders of Class A common stock are entitled to one vote per share, and holders of Class B common stock are entitled to 20 votes per share. Each share of our Class B common stock is convertible into one share of our Class A common stock at any time and will convert automatically upon certain transfers and upon the earliest of (i) the date that is specified by the affirmative vote of the holders of two-thirds of the then-outstanding shares of Class B common stock, (ii) the date on which less than 30% of the Class B common stock that was outstanding on March 2, 2021 continues to remain outstanding, (iii) March 10, 2036, (iv) nine months after the death or permanent disability of Mr. Baszucki, and (v) nine months after the date on which Mr. Baszucki no longer serves as our CEO or as a member of our board of directors. Class A common stock and Class B common stock are not redeemable at the option of the holder.
Zero and 3.7 million shares of Class B common stock held by entities affiliated with David Baszucki, Founder, President, CEO and Chair of our board of directors were converted to Class A common stock during the three months ended March 31, 2022 and March 31, 2021, respectively.
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.
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The Company had reserved shares of common stock for future issuance as follows (in thousands):
 As of
 March 31,
2022
December 31,
2021
Stock options outstanding58,685 63,267 
RSUs outstanding14,489 14,684 
PSUs outstanding11,500 11,500 
Shares available for issuance under Equity Incentive Plan80,924 52,811 
2020 ESPP11,333 5,809 
Stock Warrants outstanding294 324 
Unregistered restricted stock awards outstanding436 468 
Total177,661