Roblox Corp (NYSE:RBLX) is experiencing a significant market shift, with second-quarter bookings and user engagement metrics signaling a robust recovery, despite a mixed financial report.
The gaming platform, propelled by viral game successes and expanding reach, is seeing a positive reevaluation of its growth outlook.
Following the release of its quarterly results, Wall Street analysts have revised their price forecasts upward. Wedbush’s Alicia Reese raised her forecast from $142 to $165, maintaining an Outperform rating.
Needham’s Bernie McTernan increased his forecast from $79 to $159, and Bank of America Securities’ Omar Dessouky lifted his forecast from $133 to $159.
Reese, viewing Roblox as the most compelling growth story in gaming, highlighted the company’s record-breaking second-quarter performance. Bookings surged 50% year-over-year to $1.44 billion, far exceeding her $1.19 billion estimate and the consensus estimate of $1.24 billion.
Adjusted EBITDA rose 180% to $205 million, slightly surpassing guidance but missing consensus. Daily active users hit 111.8 million, above her forecast of 92.8 million, and engagement soared to 27.8 billion hours, surpassing the estimated 22.2 billion. Monetization also exceeded expectations, with average bookings per user at $12.86.
Looking ahead, Reese raised her fiscal 2025 forecast and projects double-digit growth through 2027, with a return to 20% year-over-year growth after tough comparisons in 2026. She expects the third quarter to benefit from multiple viral games, suggesting operating leverage and revenue per engineer will grow as the platform scales.
McTernan, following a strong second-quarter performance, raised his 2025 and 2026 adjusted EBITDA estimates by 21% and 45%, respectively.
He sees Roblox’s growth potential as driven by AI leadership and a strong pipeline of viral games. Bookings rose 51% year-over-year, up from 31% in the prior quarter, fueled by five experiences reaching over 10 million daily active users. McTernan raised his bookings estimates by 11% for 2025 and 23% for 2026, with a corresponding boost to EBITDA.
His base case assumes Roblox will hit $20 billion in bookings by 2031, though his bull case expects this milestone one to two years earlier, supported by a 40% compound annual growth rate (CAGR) in bookings and nearly 60% CAGR in EBITDA. McTernan also sees growth from advertising and margin expansion in 2026.
Dessouky of Bank of America also increased his price forecast following the company’s quarterly beat, particularly noting the 51% year-over-year surge in bookings. He said the magnitude of the second quarter beat was unexpected. Growth was driven not only by the hit title Grow a Garden but also by a 90% increase in Tier 2 games.
Daily active users grew 41% year-over-year, suggesting that Roblox is deepening its penetration into the 13+ demographic and alleviating concerns of market saturation.
Operating expenses related to infrastructure and trust & safety (IT&S) rose $18 million sequentially, but Dessouky saw this as a positive sign, noting a 10% drop in cost per engagement hour.
Guidance for the third quarter also exceeded expectations, with bookings growth forecasted at 41%, compared to BofA’s 23% estimate. Dessouky raised his full-year 2025 bookings estimate to $6.06 billion and EBITDA to $1.41 billion, up from $5.59 billion and $1.24 billion, respectively.
Despite potential challenges from new leadership and tough comps in 2026, he expects the company to reaffirm its +20% year-over-year growth forecast. He also projects margin expansion of 100 basis points in 2025 and over 300 basis points in 2026–27.
Price Action: RBLX stock is trading lower by 7.57% to $127.36 at last check Friday.
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