Q3 2025 Roblox Corp Earnings Call

Speaker #1: Good morning . My name is Kate . Welcome to Roblox . Third quarter 2020 Earnings Conference call . All lines on mute . After the speakers opening remarks , there will be a question and answer session .

Operator: Good morning, my name is Kate. Welcome to Roblox third quarter 2025 earnings conference call. All lines are on mute. After the speakers' opening remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, that will be the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. Stefanie Notaney, you may now begin your conference. Thanks, Kate.

Speaker #1: If you

Speaker #1: would like to ask a question during this time , simply press star , followed by the number one on your telephone keypad . If you would like to withdraw your question , press star one .

Speaker #2: Kate . Good morning everyone . Thank you for joining our Q&A session to discuss Roblox Q3 2025 results with me . Today is Roblox co-founder and CEO David Baszucki

Stefanie Notaney: Good morning everyone. Thank you for joining our Q&A session to discuss Roblox's Q3 2025 results. With me today is Roblox co-founder and CEO David Baszucki and our Chief Financial Officer Naveen Chopra. Our shareholder letter, SEC filings, supplemental slides, and a replay of today's call can be found on our investor relations website. Our commentary today may include forward-looking statements which are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those described in our forward-looking statements. A description of these risks, uncertainties, and assumptions are included in our SEC filings, including our most recent reports on Form 10-K and Form 10-Q. You should not rely on our forward-looking statements as predictions of future events. We disclaim any obligation to update these statements except as required by law. During this call we will also discuss certain non-GAAP financial measures.

Speaker #2: our Chief Financial Officer , Naveen Chopra . Our shareholder letter , SEC filings , supplemental slides , and a replay of today's call can be found on our Investor Relations website .

Speaker #2: Our commentary today may include forward looking statements , which are subject to risks and and assumptions that could cause actual results to differ materially from those described in our forward looking statements .

Speaker #2: A description of these risks , uncertainties and assumptions are included in our SEC filings , including our most recent reports on form 10-K and form 10-q .

Speaker #2: You should not rely on our forward looking statements as predictions of future and events . We disclaim any obligation to update these statements except as required by law .

Speaker #2: During this call , we will also discuss certain non-GAAP financial measures , reconciliations between GAAP and non-GAAP metrics can be found in our shareholder letter and supplemental slides , with that , I'll turn it over to Dave .

Stefanie Notaney: Reconciliations between GAAP and non-GAAP metrics can be found in our shareholder letter and supplemental slides. With that, I'll turn it over to Dave.

Speaker #3: Thank you Stephanie . Good morning , and thank you for joining us today . A year ago at RDC , we shared the goal of capturing 10% of the global gaming content market .

David Baszucki: Thank you. Stefanie, good morning and thank you for joining us today. A year ago at RDC, we shared the goal of capturing 10% of the global gaming content market. We'd like to report that we've made tremendous progress. We estimate now that 3.2% of global gaming bookings or revenue is going through Roblox and that's up from 2.3% last year. Our platform and our creator ecosystem is healthier than it has ever been. Similarly to Q2, in Q3 we saw strength both across the platform with both existing and new experiences on the platform. The number of experiences that have more than 10 million daily active users on the platform at some point during Q3 2025 hit seven. That includes a lot of experiences we're all familiar with, as well as five that were created in the last 12 months.

Speaker #3: We'd like to report that we've made tremendous progress . We estimate now that 3.2% of global gaming bookings or revenue is going through Roblox , and that's up from 2.3% last year .

Speaker #3: Our platform and our creator ecosystem is healthier than it has ever been . Similarly to Q2 , in Q3 , we saw strength both across the platform with both existing and new experiences on the platform .

Speaker #3: The number of experiences that have more than 10 million daily active users on the platform at some point during Q3 2025 hit seven , and that includes a lot of experiences .

Speaker #3: We're all familiar with , as well as five that were created in the last 12 months . That's grow a garden , steal a brain rot .

David Baszucki: That's Grow a Garden, Steal a Brain Rot, Brookhaven, 99 Nights in the Forest, Plants versus Brain Rot, Ink Game, and Blox Roots. We believe the success on our platform continues to be driven by raw platform capabilities and performance. Continued improvements in discovery, continued improvements in our virtual economy, and complementing that, the investments we've made in infrastructure which supported multiple groundbreaking records over the last quarter, including a 45 million peak concurrency during the weekend in August. Let's get into the financial results. In Q3 our DAUs hit 151.5 million. That's up 70% year on year. This was growth really across all regions including U.S. and Canada, 32% up year on year. APAC up 108% year on year. Importantly, we see continued evolution of our age demo with 13 and over DAUs growing 89% year on year. Right now, two-thirds of total DAUs are 13 and up.

Speaker #3: Brookhaven 99 nights in the forest . Plants versus Brainrot , endgame , and blocks routes . We believe the success on our platform continues to be driven by raw platform capabilities and performance .

Speaker #3: Continued improvements in discovery continued improvements in our virtual economy and complementing that , the investments we've made in infrastructure , which supported multiple groundbreaking records over the last quarter , including a 45 million peak concurrency during the weekend in August .

Speaker #3: Let's get into the financial results in Q3 . Our doors hit 151.5 million . That's up 70% year on year . This was growth really across all regions , including us and Canada .

Speaker #3: 32% up year on year . APAC up 108% year on year . And importantly , we see continued evolution of our age . Demo with 13 and over doors growing 89% year on year .

Speaker #3: Right now , two thirds of total doors are 13 and up . Ours had similar strengths , hitting 39.6 billion hours of engagement in Q3 .

David Baszucki: Hours had similar strength, hitting 39.6 billion hours of engagement in Q3. That's up 91% year on year. Strength across all regions, U.S. and Canada up 47% year on year. APAC hours of engagement up 127% year on year. Commensurate growth with 13 and up, 107% year on year. 68% of our total hours are 13 and up. Q3 revenue was $1.36 billion, up 48% year on year. Q3 bookings was $1.92 billion, up 70% year on year. Once again, strong growth across regions, U.S. and Canada bookings up 50% year on year. APAC bookings up 110% year on year. Some highlights: Japan 125%, India 146%, Indonesia bookings up 804% year on year. Our monthly unique payers continues to be strong at 35.8 million, up 88% year on year. In Q3 through DevEx we hit $427.9 million of DevEx, up 85%, a new record.

Speaker #3: That's up 91% year on year . Strength across all regions , US and Canada up 47% year on year . APAC hours of engagement up 127% year on year .

Speaker #3: Commensurate growth with 13 and up 107% year on year . 68% of our total hours are 13 and up . Q3 revenue was 1.36 billion , up 48% year on year .

Speaker #3: Q3 bookings was 1.92 billion , up 70% year on year . Once again , strong growth across regions US and Canada . Bookings up 50% year on year .

Speaker #3: APAC bookings up 110% year on year . Some highlights . Japan won 25% . India won 46% . Indonesia bookings up 804% year on year .

Speaker #3: Our monthly unique payers continues to be strong at 35.8 million , up 88% year on year . And in Q3 through dev . We hit 427.9 million of dev , up 85% .

Speaker #3: A new record . I want to highlight that dev , which is up what our creators are earning on the platform , has grown 250% from the same period two years ago .

David Baszucki: I want to highlight that DevEx, which is what our creators are earning on the platform, has grown 250% from the same period two years ago. We continue to have strong conviction for our long term vision and we'll continue to be more diligent about investing in this innovation to support long term genre expansion and growth. We've talked about genre expansion a lot over the last year. I want to do a few highlights here. We have a lot of technology that showed at RDC this year that's rolling out, including server authority and custom matchmaking, which will make Roblox more resilient and powerful for competitive genres like shooters, sports, and racing.

Speaker #3: We continue to have strong conviction for our long term vision and will continue to be more diligent about investing in this innovation to support long term genre expansion and growth .

Speaker #3: We've talked about genre expansion , a lot over the last year . I want to do a few highlights here . We have a lot of technology that showed at RDC this year .

Speaker #3: That's rolling out , including Server authority and custom matchmaking , which will make Roblox more resilient and powerful for competitive genres like shooters , sports and racing .

Speaker #3: We've already showcased avatar enhancement technology that is in the pipeline that we believe is going to really expand the look and feel of Roblox to higher fidelity and more lifelike avatars , and continued focus in raw performance on the platform , including like Harmony and slim , which we believe is is part of the future of high fidelity gaming and the ability of our creators to make experiences that can run both on low end , two gig Android , as well as really nice high end gaming PCs on discovery .

David Baszucki: We've already showcased avatar enhancement technology that is in the pipeline that we believe is going to really expand the look and feel of Roblox to higher fidelity and more lifelike avatars, and continued focus in raw performance on the platform including tech like Harmony and Slim, which we believe is part of the future of high fidelity gaming and the ability of our creators to make experiences that can run both on low end 2 GB Android as well as really nice high end gaming PCs.

David Baszucki: On discovery, we've continued really a commitment to transparency that we also believe is good for the company, and we shared the notion that we're sharing our discovery signals with our creators, making those transparent in their analytics dashboard, and we've highlighted that we're using playthrough rate, 7 day play days per user, 7 day intentional co play days, so our creators can see exactly what we're using to make recommendations. We continue to see discovery highlight new hits. For example, in Indonesia Fish it has become extremely popular and we believe our discovery system has helped promote that.

Speaker #3: We've continued really a commitment to transparency that we also believe is good for the company , and we shared the notion that we're sharing our discovery signals with our creators , making those transparent in their analytics dashboard .

Speaker #3: We've highlighted that we're using play through rate seven day play days per user , seven day intentional Coldplay days . So our creators can see exactly what we're using to make recommendations .

Speaker #3: We continue to see discovery highlight new hits . For example , in Indonesia , fish . It has become extremely popular and we believe our discovery system has helped promote that .

Speaker #3: I would also highlight our content ecosystem continues to be strong with what have now become perennial successes like Brookhaven Academy in Blox Fruits , which all continue to draw strong engagement .

David Baszucki: I would also highlight our content ecosystem continues to be strong with what have now become perennial successes like Brookhaven, Adopt Me, and Bloxfruits, which all continue to draw strong engagement, and some of our hits from last year like Rivals and Dress to Impress continue to launch active and successful updates. Really important. At RDC we announced an 8.5% increase to the DevEx rate. Creator earnings surpassed $1 billion in the first nine months of 2025. Also in support of our creator ecosystem, we've launched our IP platform, which we believe really is the future way to allow IP holders and creators to connect without all of the complexity of handcrafted individual one-on-one contractors or contracts.

Speaker #3: And some of our hits from last year like Rivals and Dressed to Impress continue to launch active and successful updates . Really important .

Speaker #3: At RDC, we announced an 8.5% increase to the developer rate. Creator earnings surpassed $1 billion in the first nine months of 2025.

Speaker #3: Also in support of our creator ecosystem , we've launched our IP platform , which we believe really is is the future way to allow IP holders and creators to connect without all of the complexity of handcrafted individual one on one contractors or contracts and want to highlight IP owners like Mattel and Kodansha have joined that platform .

David Baszucki: I want to highlight IP owners like Mattel and Kodansha have joined that platform, and we recently announced and launched Roblox Moments, which we believe is an additional innovative discovery surface for our creators. Now, in addition to all of this, I want to make a couple highlights on some of the areas of tech we've been really working on before I hand over to Naveen. First, really safety, which has always been a top priority for us and foundational to everything we do at Roblox Corporation. Just yesterday, we announced a partnership with the AGA, the Attorney General's Alliance, on a Child Safety Coalition. Stay tuned.

Speaker #3: And we recently announced and launched Roblox Moments , which we believe is an additional innovative discovery service for our creators . Now , in addition to all of this , I want I want to make a couple highlights on some of the areas of tech we've been really working on before .

Speaker #3: I hand over to Naveen first . Really safety , which is always been a top priority for us and foundational to everything we do at Roblox .

Speaker #3: Just yesterday , we announced a partnership with the Aiga , the attorney General's Alliance , on a child safety Coalition . Stay tuned with this , we believe there's a a wonderful opportunity to share and develop what we believe is going to be the industry standard in communication for social and mobile apps , including our commitment .

David Baszucki: With this, we believe there's a wonderful opportunity to share and develop what we believe is going to be the industry standard in communication for social and mobile apps, including our commitment by the end of this year to use AI-based facial age estimation to estimate the age of everyone on our platform and to use that to gate who uses communication technology and how, who can communicate with who. Even in addition to what we already do, which is filtering of all text and no image sharing on Roblox, we believe as new technology rolls out, it allows us to harvest and use this technology for continued advancements in safety and civility.

Speaker #3: By the end of this year to use AI based facial age estimation to estimate the age of everyone on our platform and to use that to gate , who uses communication technology and help root who can communicate with who even in addition to what we already do , which is filtering of all text and no image sharing on Roblox , we believe as new technology rolls out , it allows us to harvest and use this technology for continued advancements in safety and civility .

Speaker #3: We've also released over 100 innovations this year in our safety and Civility group , including an announcement that we're going to be adopting iArc and international Age Rating Coalition rating over the next few quarters .

David Baszucki: We've also released over 100 innovations this year in our safety and civility group, including an announcement that we're going to be adopting IARC, International Age Rating Coalition, rating over the next few quarters, and we've raised our minimum age for restricted content to really the global standard of 18 years old. I want to highlight we do run stricter than typical industry policies on Roblox. We believe it's an essential strategic investment to how we run the company, and as we roll out facial age estimation, we really do believe this is going to add long-term value creation for shareholders, even if there are any short term from that rollout. On the AI side, we are now up to running over 400 AI systems inside the company. These are core within safety, discovery, and creation, highlighting a few things that we've shipped so far.

Speaker #3: And we've raised our minimum age for restricted content to really the global standard of 18 years old . I want to highlight we do run stricter than typical industry policies on Roblox .

Speaker #3: We believe it's an essential strategic investment to how we run the company . And as we roll out facial age estimation , we really do believe this is going to add long term value creation for shareholders , even if there are any short term headwinds from that rollout .

Speaker #3: On the AI side , we are now up to running over 400 AI systems inside the company . These are core within safety , discovery and creation , highlighting a few things that we've shipped so far .

Speaker #3: Our cube 3D model , which we shipped earlier , is really going to come to life over the next 1 to 2 quarters .

David Baszucki: Our Cube 4D model, which we shipped earlier, is really going to come to life over the next one to two quarters as this goes live in multiplayer mode for everyone on the platform. We've also open sourced the Studio NPC server, which is making Roblox Studio the ability to integrate as both a client and a server in complex AI-based workflows. Behind the scenes, our safety model for PII protection continues to get better all the time, and we shipped Roguard for our safety of our LLM text generation tech in game. Stay tuned for a lot more generative AI. I want to highlight that in addition to AI for safety and discovery, there's been a lot of chat about how much training data various people have access to within Roblox.

Speaker #3: As this goes live in multiplayer mode for everyone on the platform . We've also opened the studio and server , which is making Roblox Studio the ability to integrate as both a client and a server in complex AI based workflows .

Speaker #3: Behind the scenes , our safety model for PII continues to get better . All the time . And we shipped Rogard for our safety of our LLM Tex Gen tech in game .

Speaker #3: Stay tuned for a lot more generative AI . I want to highlight that in addition to AI for safety and discovery , there's been a lot of chat about how much training data various people have access to within Roblox .

Speaker #3: Every day we are moving forward to capturing , which is literally over 30,000 years of human interaction data , and doing this in a PII compliant way .

David Baszucki: Every day we are moving forward to capturing, which is literally over 30,000 years of human interaction data, and doing this in a PII compliant way. This is unique data we have no intent of ever getting outside of our walls or selling that can really be used as we start to roll out our future vision of allowing people to play both with others as well as with NPCs and supporting unlimited creation in Roblox, not just for our creators but for everyone. That can mean per object, with clothing, per the world you're in, per game creation, and ultimately with friends in real time while playing.

Speaker #3: This is unique data . Data . We have no intention of ever getting outside of our walls or selling that can really be used as we start to roll out our future vision of allowing people to play both with others as well as with NPCs and supporting unlimited creation in Roblox , not just for our creators , but for everyone .

Speaker #3: And that can mean per object with clothing , per the world you're in , per game creation and ultimately with friends in real time while playing .

Speaker #3: Finally , 45 million concurrent users is a really big number and we supported this really moving towards what we think is more and more an optimal mix of our own data centers , both core data centers , edge data centers , and GPU installations on our own bare metal with bursting with our cloud partners and we we did this in really a wonderful way by bursting over weekends for several hour slots .

David Baszucki: Finally, 45 million concurrent users is a really big number, and we supported this, really moving towards what we think is more and more an optimal mix of our own data centers, both core data centers, edge data centers, and GPU installations on our own bare metal with bursting with our cloud partners. We did this in really a wonderful way by bursting over weekends for several hour slots when we hit peak numbers. We're going to continue to go down this route. We're investing more and more in our own bare metal for scale. Core data centers give us load balancing and efficiency. Everyone in Brazil is happy because we added a new edge data center there to reduce latency.

Speaker #3: When we hit peak numbers , we're going to continue to go down this route . We're investing more and more in our own bare metal for scale core data centers give us load balancing and efficiency .

Speaker #3: Everyone in Brazil is happy because we added a new edge data center there to reduce latency . We're going to continue doing that , and we are more and more now building out our own native bare metal GPU capability .

David Baszucki: We're going to continue doing that, and we are more and more now building out our own native bare metal GPU capability, but coupling with our cloud partners, we're going to make sizable improvements here. The big improvements we've seen in cost to serve may be harder to realize for the next few quarters, but this is all consistent with our long-term focus. With all of this excitement about innovation, we of course have a lot of initiatives we work on every day to enhance our platform. We focus on the details, and with that, I'm going to hand it over to Naveen to complement my introduction.

Speaker #3: But coupling with our cloud partners , we're going to make sizable improvements here . The big improvements we've seen in cost to serve may be harder to realize for the next few quarters , but this is all consistent with our long term focus .

Speaker #3: With all of this excitement about innovation , we of course we have a lot of initiatives . We work on every day to enhance our platform .

Speaker #3: We focus on the details and with that , we're going to hand it . I'm going to hand it over to Naveen to compliment my introduction .

Speaker #4: Great . Thanks , Dave . Good morning everybody . I'm going to try to keep my comments relatively brief so we can get to some questions .

Naveen Chopra: Great. Thanks, Dave. Good morning, everybody. I'm going to try to keep my comments relatively brief so we can get to some questions. As Dave noted, the tremendous growth that we saw in the quarter was driven by this combination of big viral hits and underlying platform growth. With that in mind, I want to just share a few observations regarding overall platform health, if you will. Last quarter I highlighted the engagement growth that we were seeing in experiences outside of our top 10. This quarter, the growth in engagement for these experiences, again outside of the top 10, accelerated even further, from 47% in Q2 to 58% in Q3. That's the engagement. On the monetization side, spending in that cohort of experiences remained north of 40%. Excuse me, spending growth remained north of 40%. We also saw healthy growth in bookings per daily active user.

Speaker #4: As Dave noted , the tremendous growth that we saw in the quarter was driven by this combination of big viral hits and underlying platform growth .

Speaker #4: And so with that in mind , I want to just share a few observations regarding overall platform health , if you will . Last quarter , I highlighted the engagement growth that we were seeing in experiences outside of our top ten .

Speaker #4: Well , this quarter , the growth in engagement for these experiences , again , outside of the top ten accelerated even further from 47% in Q2 to 58% in Q3 .

Speaker #4: That's the engagement . And then on the monetization side , spending in that cohort of experiences remained north of 40% . Excuse me , spending growth remained north of 40% .

Speaker #4: We also saw healthy growth in bookings per daily active user . That was true in every region other than APAC , which I call out because very importantly , in APAC , the trend really is a function of mix shift at the country level payers .

Naveen Chopra: That was true in every region other than APAC, which I call out because, very importantly, in APAC, the trend really is a function of mix shift at the country level. Payers, as Dave highlighted, grew 88% year on year, which is a very healthy growth rate in and of itself, but notably is higher than the rate of user growth, which was 70%. We believe that this dynamic is at least in part caused by changes that we've made in our economy. Remember, we launched regional pricing for marketplace items back in June, and we think that helped drive higher payer penetration in markets like Southeast Asia. We did see a decline in bookings per payer on a blended basis. Similar to my comments on bookings per DAU, it's important to understand that this was really driven by geographic mix shift.

Speaker #4: As Dave highlighted , grew 88% year on year , which is a very healthy growth rate in and of itself . But notably is higher than the rate of user growth , which was 70% .

Speaker #4: And we believe that this dynamic is at least in part , caused by changes that we've made in our economy . Remember , we launched regional pricing for marketplace items back in June , and we think that that helped drive higher pair penetration in markets like Southeast Asia .

Speaker #4: We did see a decline in bookings per payer on a blended basis . But similar to my comments on bookings per day , you it's important to understand that this was really driven by geographic mix shift .

Speaker #4: So platform evolution looks healthy and that really increases our conviction in our long term goals . But as Dave pointed out , also underscores the importance of continuing to invest to ensure that we can deliver healthy growth over a multi-year period of time .

Naveen Chopra: Platform evolution looks healthy and that really increases our conviction in our long-term goals. As Dave pointed out, it also underscores the importance of continuing to invest to ensure that we can deliver healthy growth over a multi-year period of time. What does that look like financially? On the top line, we see momentum in the business to continue to deliver healthy double-digit bookings growth. We think that'll be aided by the launch of a number of the key technologies Dave touched on that will roll out in late Q1 and early Q2 of 2026. Many of these technologies are designed to enable genre expansion on our platform. You saw some of those demoed at RDC. From a reported growth perspective in 2026.

Speaker #4: So what does that look like financially ? Well , on the top line , we see momentum in the business to continue to deliver healthy double digit bookings growth .

Speaker #4: We think that will be aided by the launch of a number of the key technologies . Dave touched on that will roll out in late Q1 and early Q2 of 2026 .

Speaker #4: Many of these technologies are designed to enable genre expansion on our platform . You saw some of those demoed at RDC from a reported growth perspective .

Speaker #4: In 26 . We think the adoption of these technologies will be a factor , meaning how quickly developers adopt some of these new capabilities will influence the growth rate , particularly given the tough compares that we know will have coming out of 2025 .

Naveen Chopra: We think the adoption of these technologies will be a factor, meaning how quickly developers adopt some of these new capabilities will influence the growth rate, particularly given the tough compares that we know we'll have coming out of 2025. We're also conscious of the fact that the new safety policies we're rolling out, consistent with our commitment to being the gold standard for safety, may cause some short-term friction to engagement and bookings, but ultimately we think those are a magnifier of long-term growth. On the expense side of the equation, we are envisioning more investments in DevEx, in infrastructure, and people to support our goals around safety and genre expansion. That's the reason you're not seeing year-over-year margin expansion in Q4 based on our guidance.

Speaker #4: We're also conscious of the fact that the new safety policies we're rolling out , consistent with our commitment to being the gold standard for safety , may cause some short term friction to engagement in bookings , but ultimately , we think those are a magnifier of long term growth .

Speaker #4: And then on the expense side of the equation , we are envisioning more investments in dev and infrastructure . And people to support our goals around safety and genre expansion .

Speaker #4: That's the reason you're not seeing year over year margin expansion in Q4 . Based on our guidance . And it's the reason that we expect margins to decline slightly in 2026 , given the combined impact of a full year of higher dev rates , limited cost to serve improvements around infrastructure and safety , and higher growth rates in our comp .

Naveen Chopra: It's the reason that we expect margins to decline slightly in 2026 given the combined impact of a full year of higher DevEx rates, limited cost to serve improvements around infrastructure and safety, and higher growth rates in our comp and benefits expense lines. There will also be incremental CapEx starting in Q4 2025. That's incorporated in the guidance that we shared. I would tell you to expect similar levels of CapEx in 2026, which of course implies that CapEx intensity next year should be lower than 2025 but still somewhat elevated relative to 2024. Realize probably getting a little bit into the weeds there, but let me step back for a second.

Speaker #4: And, in addition to the expense lines, there will also be incremental CapEx starting in Q4 2025. That's incorporated in the guidance that we shared. I would tell you to expect similar levels of CapEx in 2026, which, of course, implies that CapEx intensity next year should be lower than in 2025.

Speaker #4: But still somewhat elevated relative to 2024 . So , you know , realize probably getting a little bit into the weeds there . But let me step back for a second .

Speaker #4: I think the key takeaways here are we are way ahead of our long term growth plans . And in fact , the reality situation is that bookings have grown faster than our ability to deploy the appropriate growth investments .

Naveen Chopra: I think the key takeaways here are we are way ahead of our long-term growth plans and in fact the reality of the situation is that bookings have grown faster than our ability to deploy the appropriate growth investments. That means you're going to see some slight margin compression as we catch up over the next few quarters. I think those investments really should give everyone even more confidence in our ability to continue to deliver sustainable long-term growth. Hopefully that's some helpful color both on what we're seeing and what we're expecting. With that I think we'll open the line for questions.

Speaker #4: And that means you're going to see some slight margin compression as we catch up over the next few quarters . But I think those investments really should give everyone even more confidence in our ability to continue to deliver sustainable , long term growth .

Speaker #4: So hopefully that's some helpful color both on what we're seeing and what we're expecting . And with that , I think we'll open the line for questions .

Speaker #1: Thank you . At this time , I would like to remind everyone , in order to ask a question , please press star .

Operator: Thank you. At this time I would like to remind everyone in order to ask a question please press Star, then the number one on your telephone keypad. We'll first go to Matthew Cost at Morgan Stanley. Your line is open.

Speaker #1: Then the number one on your telephone keypad . We'll first go to Matthew Cost at Morgan Stanley . Your line is open .

Speaker #5: Good morning . Thanks for taking the question . Dave , I want to start on AI . I mean , just when I look at your infrastructure plans , clearly , you're very excited about putting , you know , GPUs and more data center power behind what you're doing .

David Baszucki: Good morning.

Naveen Chopra: Thanks for taking the question, Dave. I want to start on AI. When I look at your infrastructure plans, clearly you're very excited about putting GPUs and more data center power behind what you're doing. Tie that back to what the user experience or the games on Roblox are going to look like in this world that you're building towards. When you think about what Cube 4D is capable of, what will real-time content generation and what you're calling 4D content creation mean for Roblox experiences and for engagement over the next couple of years? I have one for Naveen.

Speaker #5: Tie that back to what the user experience or the games on Roblox are going to look like in in this world that you're building towards , when you think about what cube is capable of , what will real time content generation and what you're calling 4D content creation mean ?

Speaker #5: You know , for Roblox experiences and for engagement over the next couple of years . And then I have one for Naveen . As a follow up .

David Baszucki: As a follow up, thank you.

Speaker #5: Thank you .

Speaker #3: Matthew . Great question . And this is a fun one to answer . It also highlights the just enormous future technical innovation we have .

Naveen Chopra: Matthew.

David Baszucki: Great question and this is a fun one to answer. It also highlights the just enormous future technical innovation we have right in front of us. We have shared publicly, RDC and others, really a vision of what the ultimate spec for Roblox should be. That ultimate spec should be creator decides everything from fun anime look and feel all the way up to photorealism, anywhere from one player to 100,000 people at a concert simultaneously, the ability to use AI to do real-time modification of that world, everything from a piece of clothing to really 100,000 people with a dungeon master modifying the whole environment in real time.

Speaker #3: Rate looking in front of us . We have shared publicly at IDC and others . Really a vision of what the ultimate spec for Roblox should be , and that ultimate spec should be creator decides everything from fun anime , look and feel all the way up to photorealism .

Speaker #3: Anywhere from one player to 100,000 people at a concert simultaneously . The ability to use AI to do real time modification of that world , everything from a piece of clothing to really 100,000 people with a Dungeon Master modifying the whole environment in real time .

Speaker #3: A mix of true human players , NPC players all together . Doing this with a very tight I towards efficiency and cost because we're a freemium platform .

David Baszucki: A mix of true human players, NPC players all together doing this with a very tight eye towards efficiency and cost because we're a freemium platform, ultimately doing this on everything from a 2 GB RAM Android device to a high-end gaming PC. That is an amazingly complex spec. What you're going to see coming out soon with Cube 4D is real-time generation in experience in multiplayer, not just of static objects but of complex objects, vehicles, weapons, other types of things that users can interact with in multiplayer. More of that to come, more AI supporting the stack everywhere. We're marching as quickly as we can to that really big visionary spec. Some of the gameplay that we will see, we do not know what it is.

Speaker #3: Ultimately doing this on everything from a two gig Ram Android device to a high end gaming PC , so that is that is an amazingly complex spec .

Speaker #3: What you're going to see coming out soon with cube for D is real time generation , inexperience in multiplayer , not just a static objects , but a complex objects , vehicles , weapons , other types of things that user can interact with in multiplayer .

Speaker #3: More of that to come . More AI supporting the stack everywhere , but we're marching as quickly as we can to that really big visionary spec .

Speaker #3: Some of the gameplay that we will see , we do not know what it is . We've seen that historically on Roblox , more and more as we both cover new and existing genres in a predictable way , along with new types of games .

David Baszucki: We've seen that historically on Roblox more and more as we both cover new and existing genres in a predictable way along with new types of games. I would highlight Dress to Impress was an example a year ago where the raw technology we were building to support more traditional gaming allowed the creation of a whole new genre. Stay tuned both for more coverage of existing genres at higher performance as well as, as of now, unthought of types of gameplay.

Speaker #3: I would highlight dress to Impress was an example . A year ago where the raw technology we were building to support more traditional gaming allowed the creation of a whole new genre .

Speaker #3: So stay tuned for more coverage of existing genres at higher performance , as well as , as of now , unthought of types of gameplay .

Speaker #1: Before going to the next question , I would like to remind everyone if you have a two part question to ask , a prompt because the line will be muted .

Operator: Before going to the next question, I would like to remind everyone if you have a two-part question to ask a prompt because the line will be muted. We'll move next to Brian Peach with BMO Capital Markets. Your line is open.

Speaker #1: We'll move next to Brian Peets with BMO Capital Markets . Your line is open .

Speaker #6: Thanks so much , Dave . You mentioned increasing the dev rate by 8.5% , putting more economics into creators hands . However , at the same time , if you look at competing UGC platforms like Fortnite , they're also offering very attractive economics to try to win over creators to build on their UGC platform .

David Baszucki: Thanks so much, Dave.

Naveen Chopra: You mentioned increasing the DevEx rate by.

David Baszucki: 8.5% putting more economics into creators' hands.

Naveen Chopra: However, at the same time, if you.

David Baszucki: Look at competing UGC platforms like Fortnite, they're also offering very attractive economics to try to win over creators to build a mirror UGC platform. How do you think about the need to continue driving economics towards creators to help fend off any competition from other platforms that either are currently in development or could be coming in the future? Thank you. Hey, great question. I do want to highlight generally at Roblox we run the company by looking to the future and not looking over our shoulder. I would say in this situation there's one additional component to what is the DevEx rate and that is the ability of a new creator or an existing creator to make enormous economic returns.

Speaker #6: How do you think about the need to continue driving economics towards creators to help fend off any competition from other platforms that either are currently in development , or could be coming in the future ?

Speaker #6: Thank you .

Speaker #3: Hey , great question . I do want to highlight , you know , generally at Roblox , we run the company by looking to the future and not looking over our shoulder .

Speaker #3: I would say in this situation, there's one additional component to what is the dev rate, and that is the ability of a new creator or an existing creator to make enormous economic returns.

Speaker #3: And so one needs to multiply the dev rate by the volume of users on the platform by the breadth of the creative tools , by the velocity that new creators can make , new experiences .

David Baszucki: One needs to multiply the DevEx rate by the volume of users on the platform, by the breadth of the creative tools, by the velocity that new creators can make new experiences. In the end that's how I believe and we believe creators analyze the situation, not simply by the DevEx rate. We do believe for every incremental % within obviously our fiduciary duty and our balancing of earnings and DevEx and all of our other costs, that for every incremental % we do believe there can be some effect on the creators in making Roblox a more appealing platform.

Speaker #3: And in the end , that's how I believe and we believe creators analyze the situation , not simply by the dev rate we do believe for every incremental percentage within .

Speaker #3: Obviously , our fiduciary duty and our balancing of earnings and dev and all of our other costs that for every incremental percent , we do believe there can be some effect on the creators in making Roblox a more appealing platform .

David Baszucki: It ends up at the highest level making us think about our company where we want our COGS to be as lean and as efficient as possible, our personnel cost to be as lean and efficient as possible, our infra trust and safety costs to never compromise and at the same time to be run as thoughtfully as possible. This has been one of the benefits of building out our own infrastructure and then finally being very thoughtful on how much we move back to our creator community relative to our own cash flow. I think it's much bigger than kind of this one to one comparison and that's really long term. We want to move as much money in a prudent and thoughtful way while always being responsible for trust, safety and our earnings to the creators.

Speaker #3: It ends up at the highest level, making us think about our company and where we want our COGS to be as lean and as efficient as possible.

Speaker #3: Our personnel costs to be as lean and efficient as possible are infra trust and safety costs to never compromise . And at the same time to be run as thoughtfully as possible .

Speaker #3: And this has been one of the benefits of building out our own infrastructure . And then finally being very thoughtful on how much we move back to our creator community relative to our own cash flow .

Speaker #3: So I think it's a much bigger than kind of this 1 to 1 comparison . And that's really long term . We want to move as much money in a prudent and thoughtful way while always being responsible for trust , safety and our earnings to the creators .

Speaker #1: We'll move next to Eric Sheridan with Goldman Sachs . Your line is open .

Operator: We'll move next to Eric Sheridan with Goldman Sachs. Your line is open.

Speaker #7: Thanks so much for taking the question. Can you share with us key learnings as older age cohorts continue to scale as a percentage of the mix in the business? Based on those learnings, how can you line up your investment priorities to sustain that growth and stimulate that aspect of mix in the years ahead?

David Baszucki: Thanks so much for taking the question. Can you share with us key learnings as older age cohorts continue to scale as a percentage of the mix in the business? Based on those learnings, how can you line up your investment priorities to sustain that growth and stimulate that aspect of mix in the years ahead? Thanks so much. I'll share some key learnings and then I'll share how we are lining things up. I think one of the key learnings is Roblox has a huge ability to virally attract new users to the platform with new hits, and we've seen that both with Dress to Impress. We've seen it with Grow a Garden, where we really get user acquisition at enormous scale organically.

Speaker #7: Thanks so much .

Speaker #3: I'll share some key learnings and then I'll share how we are lining things up . I think one of the key learnings is Roblox has a huge ability to virally attract new users to the platform with new hits , and we've seen that both with dress to impress .

Speaker #3: We've seen it with Grow a Garden , where we really get user acquisition at enormous scale , organically as word of mouth traverses these properties , we've also seen with new types of gameplay .

David Baszucki: As word of mouth traverses these properties, we've also seen with new types of gameplay, once again using those two as examples, that older players are excited and interested in that. If anything, as we look at the global gaming market, specifically space, which is estimated anywhere, I won't make the exact estimate, but numbers between $180 billion and $200 billion. We see all of the existing genres, and we've been able to align those genres with our technical roadmap. As we shared before, a lot of our technology we believe is going to support sports. A lot of our technology will support racing. Some of the new technology we're working on is going to make RPGs better.

Speaker #3: Once again , use those to as examples that older , older players are are excited and interested in . That if anything , as we look at the global gaming market space , which is , you know , estimated anywhere , you know , I won't make the exact estimate , but numbers between 180 and 200 billion .

Speaker #3: We see all of the existing genres , and we've been able to align those genres with our technical roadmap . As we shared before , a lot of our technology , we believe , is going to support sports .

Speaker #3: A lot of our technology will support racing . Some of the new technology we're working on is going to make RPGs better . Some of the technology we're working on now .

David Baszucki: Some of the technology we're working on now, we believe we're going to see more and more avatars on Roblox that have a much bigger diversity, just as we see in the gaming ecosystem as a whole relative to what we have on Roblox. We can use that to guide our technical roadmap. I would highlight we're not copying. We are envisioning satisfying those technical constraints while at the same time building a platform where the exact same experience can run on a 2 GB RAM Android in a very difficult networking configuration and at the same time look absolutely amazing on a high-end gaming PC, eliminating really kind of this void between mobile and desktop and console. We also believe the future of platforms like Roblox is much more cloud integrated such that AI and generative AI is always available in the experience for all creators.

Speaker #3: We believe we're going to see more and more avatars on Roblox that have a much bigger diversity, just as we see in the gaming ecosystem as a whole relative to what we have on Roblox.

Speaker #3: And so we can use that to guide technical roadmap . But I would I would highlight we're not copying . We are envisioning satisfying those technical constraints while at the same time building a platform where the exact same experience can run on two gig Ram , Android in a very difficult networking configuration and at the same time look absolutely amazing on a high end gaming PC , eliminating really kind of this void between mobile and desktop and console .

Speaker #3: We also believe the future of platforms like Roblox is much more cloud integrated , such that AI and generative AI is always available in the experience for all creators .

Speaker #3: So we are we are able to align a bit both our own vision as well as what are all of the current genres in the gaming ecosystem , and make sure we line up with that .

David Baszucki: We are able to align a bit both our own vision as well as what are all of the current genres in the gaming ecosystem and make sure we line up with that. We're optimistic. There's a lot of growth ahead of us in some of these genres where we're not fully at 3% of the global gaming market right now.

Speaker #3: So that's , you know , we're optimistic . There's a lot of growth ahead of us in some of these genres where we're not fully at 3% of the global gaming market right now .

Speaker #1: We'll move next to Jason Bazinet with the Citigroup . Your line is open .

Operator: We'll move next to Jason Bazinet with Citigroup. Your line is open.

Speaker #8: I just had a question on the shareholder letter . I think in your 23 Investor Day , you laid out 20% plus bookings growth from 25 to 27 .

Naveen Chopra: I just had a question on the shareholder letter.

David Baszucki: I think in your 2023 Investor Day you laid out 20%+ bookings growth from 2025 to 2027.

Naveen Chopra: In the shareholder letter you acknowledge.

Speaker #8: And in the shareholder letter , you acknowledge the great results you've had so far this year . But then you say , quote , as we look to next year , our long term objectives have not changed .

David Baszucki: The great results you've had so far this year. As we look to next year, our long term objectives have not changed. Is that essentially a soft way of saying that you think that the growth.

Speaker #8: Is that essentially a soft way of saying that you think that the the growth will be below 20% in 26 ? Is that what you're trying to say ?

Naveen Chopra: Will be below 20% in 2026?

David Baszucki: Is that what you're trying to say? I think that's what the market's trying to digest with a pre-market extend your stock. Thanks.

Speaker #8: Because I think that's what the market's trying to digest with the pre-market action in your stock . Thanks .

Speaker #4: Yeah . Hey , Jason it's Naveen . Thanks for asking to clarify that . Look , I think we are not providing any specific guidance about 2026 at this point in time .

Naveen Chopra: Hey Jason, it's Naveen. Thanks for asking to clarify that. Look, I think we are not providing any specific guidance about 2026 at this point in time. I think that would be premature. We need to land the plane on 2025 and then I think we'll be able to dial in expectations for 2026. More specifically, I think what we're trying to highlight for people is that there are some important things to consider as we look at expectations for bookings growth next year. There will be tailwinds from the momentum that we are seeing in the platform today. There will be tailwinds from a lot of the tech that's going to be hitting the platform in the first half of next year.

Speaker #4: I think that would be premature . We need to land the plane on 25 , and then I think we'll be able to dial in expectations for 2026 .

Speaker #4: More specifically , I think what we were trying to highlight for people is that there are some important things to consider as we look at expectations for bookings growth next year .

Speaker #4: There will be tailwinds from the momentum that we are seeing in the platform today . There will be tailwinds from a lot of the tech that's going to be hitting the platform in the first half of next year , but there could also be potential headwinds , obviously , from the tough comps and then potentially from some of the new safety policies that we are going to be rolling out .

Naveen Chopra: There could also be potential headwinds obviously from the tough comps and then potentially from some of the new safety policies that we are going to be rolling out. We don't think any of that changes where we expect this business to be over the next several years. I think it is too early to put any specific numbers around 2026 at this point in time.

Speaker #4: We don't think any of that changes where we expect this business to be . You know , over the next several years . But I think it is too early to put any specific numbers .

Speaker #4: Around 26 at this point in time .

Operator: We'll move next to Cory Carpenter with JPMorgan. Your line is open.

Speaker #1: We'll move next to query Carpenter with JP Morgan . Your line is open .

Naveen Chopra: Thanks for the question, Naveen. Maybe building on that, you did not mention advertising as a potential tailwind next year. Just curious what your early learnings have been in Rewarded Video.

Speaker #9: Thanks for the question . Maybe building on that , you did not mention advertising as a potential tailwind next year . So just curious what your early learnings have been in rewarded video .

David Baszucki: How big of a push or priority?

Speaker #9: How big of a push or priority do you plan to make that in 2026 ? Thank you .

Naveen Chopra: Do you plan to make that in 2026? Thank you.

Speaker #4: Yeah , so I think consistent with some of the comments we've shared recently around advertising , we very bullish about the long term opportunities there that we are cautious about the near term because we want to make sure that we get it right and you've heard it already .

David Baszucki: Yeah.

Naveen Chopra: I think consistent with some of the comments we've shared recently around advertising, we remain very bullish about the long-term opportunities there. We are cautious about the near term because we want to make sure that we get it right. As you've heard at RDC, we are now rolling out Rewarded Video on a limited basis. I think we pointed out in the shareholder letter we now have over 140 creators onboarded. What we have learned from that is that we want to be very thoughtful and diligent with those creators about how we integrate Rewarded Video to make sure that it works for them from an engagement and a monetization perspective, that it works for our users in terms of the experience, performance, etc. That obviously we are representing our advertisers in a high-quality way.

Speaker #4: We are now rolling out video on sort of a limited basis . I think we pointed out in the shareholder letter , we now have over 140 creators onboarded , but we have learned from that is that we want to be very thoughtful and diligent with those creators about how we integrate , rewarded video to make sure that it works for them from an engagement and a monetization perspective , that it works for our users in terms of the experience , performance , etc.

Speaker #4: and that obviously we are representing our advertisers in remain a in a high quality way . So , you know , there's still a lot for us to do on that front and therefore not something that we would call out as a major contributor in the short term .

Naveen Chopra: There is still a lot for us to do on that front and therefore not something that we would call out as a major contributor in the short term, but something that is going to be a key part of our business as we progress over the next few years.

Speaker #4: But something that is going to be a key part of our business as rewarded progress over the next few years .

Speaker #1: We'll move next to Kangaroo with Wells Fargo . Your line is open .

Speaker #1: We'll move next to Kangaroo with Wells we

Operator: We'll move next to Ken Gawrelski with Wells Fargo. Your line is open.

Speaker #8: Thank you .

Naveen Chopra: Thank you.

David Baszucki: Appreciate it. Could you talk a little bit about?

Naveen Chopra: The various genres and how do you think about the recommendation engine, which has been clearly very, quite successful.

Speaker #10: do you think about the the recommendation engine , which has been clearly very , very successful . And kind of surfacing new hit games .

David Baszucki: Kind of surfacing new hit games. Could you talk about how you're pushing?

Speaker #10: Could you talk about how you pushing more diversity of genres and to make sure that you know that there's enough experiences out there ?

Naveen Chopra: More diversity of genres to make sure that there's enough experiences out there.

Speaker #10: And is this a concern ? Are you are you seeing are you worried at all a little bit about a more concentration in in certain types of genre games or , or in certain game mechanics ?

David Baszucki: Is this a concern? Are you worried at all, a little?

Naveen Chopra: Bit about concentration in certain types of.

David Baszucki: Genre games or in certain game mechanics?

Speaker #10: Thank you very much .

Naveen Chopra: Thank you very much.

Speaker #3: Hey , great question . And part of my intro was the highlight that diversity on the platform with seven titles , over 10 million doors at some point during the quarter , and five of them new , one of the the way we have been thinking about discovery , there's two big areas of it .

David Baszucki: Great question. Part of my intro was to highlight that diversity on the platform. With seven titles, over 10 million DAUs at some point during the quarter and five of them new. One of the ways we have been thinking about discovery, there are two big areas of it. One is we're not trying to optimize the short term, we're trying to optimize the long term enterprise value of the company and we're also trying to optimize ecosystem health in addition to what we put in front of users, which really does mean surfacing new creators and new genres side by side. The second part, on our discovery, we're moving more and more towards complete transparency of our discovery algorithms.

Speaker #3: One is we're not trying to optimize the short term . We are trying to optimize the long term enterprise value of the company , and we're also trying to optimize ecosystem health in addition to what we put in front of users , which which really does mean surfacing new creators and new genres side by side .

Speaker #3: The second part on our discovery , we're moving more and more towards complete transparency of our discovery algorithm . We're sharing the signals that we believe point to long term health of the ecosystem .

David Baszucki: We're sharing the signals that we believe point to long term health of the ecosystem and as you correctly noted, we believe part of that long term health is through expansion in some genres like RPGs, shooting, racing, battle sports and other genres on the platform. The final thing I want to highlight on the way our discovery system is working is long term. There are really three prongs to discovery on Roblox. There's our own recommendation engine. It's coupled with, on the homepage, Sponsored Tiles, which is paid discovery by our creators. More and more new creators who are launching a new game or bursting are using that to complement our organic discovery. Finally, our top picks and curated sort is an additional way that we complement that with the vision on the platform.

Speaker #3: And as you correctly noted , we believe part of that long term health is through expansion . In some genres , like RPGs , shooting , racing , battle sports and other genres .

Speaker #3: On the platform . The final thing I want to highlight on on the way our discovery system is working is long term . There's really three prongs to discovery on Roblox .

Speaker #3: There's our own recommendation engine . It's coupled with on the home page sponsored tiles , which is paid discovery by our creators , and more and more new creators who are launching a new game are bursting , are using that to complement our organic discovery .

Speaker #3: Finally , our top picks and curated sort is an additional way that we complement that with the vision on the platform . We're being very careful not to look backwards , not to burn in what is historically been big on Roblox , but instead to look forward to what we believe will be new types of gaming on the platform .

David Baszucki: We're being very careful not to look backwards, not to burn in what has historically been big on Roblox, but instead to look forward to what we believe will be new types of gaming on the platform. I believe relative to a year or even two years ago, our discovery system is working better than it ever has. I think we have continued improvements coming. Stay tuned.

Speaker #3: So I believe relative to a year or even two years ago , our discovery system is working better than it ever has , and I think we have continued improvements coming up .

Speaker #3: So stay tuned .

Speaker #1: We'll move next to Benjamin Black with Deutsche Bank . Your line is open .

Operator: We'll move next to Benjamin Black with Deutsche Bank. Your line is open.

Speaker #4: Good morning . Thank you .

David Baszucki: Good morning. Thank you for taking my question. Just touching on the growing number of experiences that are eclipsing 10 million users. With the growing data set that you have on user engagement DAU behavior, does the discovery model just get increasingly smarter at recommending content? I guess the question is are you starting to have a real data moat in discovery, and then Naveen, over the past couple quarters we've seen a divergence in hours engaged growth and bookings growth. Could you just help us understand why this is happening? Is it as easy as sort of a mix shift towards lower monetizing experiences or lower monetizing regions? If so, how should the relationships between those two evolve from here? Thank you. This is a really good question.

Speaker #11: For taking my questions . So just touching on the growing number of experiences that are eclipsing ten , million users . So you know , with the growing data set that you have on user engagement , the oh behavior does the discovery model just get increasingly smarter at recommending content ?

Speaker #11: So I guess I guess the question is , are you starting to have a real data moat and discovery and then Levine , you know , over the past couple of quarters , we've seen a divergence in I was engaged growth and bookings growth .

Speaker #11: Could you just help us understand why this is happening? Is it easy as sort of a makeshift towards lower monetizing experiences or monetizing regions?

Speaker #11: And if so , how should you know the relationship between those two evolve from here . Thank you .

Speaker #3: Hey , this is a really good question . I want to put it under the umbrella of first privacy safety PII safety , adherence to all local laws and and all of that .

David Baszucki: I want to put it under the umbrella of, first, privacy, safety, PII protection, adherence to all local laws and all of that. Second, I want to put it under the umbrella we're not under any financial pressure and have no intent to ever release any of this Roblox data anywhere off the platform. Once we look into those two things, the data set is enormous. The data set is not simply who clicks where. The data set is real-time 3D avatar interactions. It's what areas of a certain experience are retaining more, it's what are avatars doing in any creator's experience. It's the ability to analyze that and the ability to analyze the data that makes up a 3D experience. In addition to maybe more traditional signals for discovery, we use 3D and time-based immersion signals to help predict what may be a good experience on our platform.

Speaker #3: And second , I want to put it under the umbrella of we're not under any financial pressure and have no intent to ever release any of this Roblox data anywhere off the platform .

Speaker #3: Once we look into those two things , though , the data set is enormous . The data set is not simply who clicks where the data set is real time 3D avatar interactions .

Speaker #3: It's what areas of a certain experience are more . It's what our avatar is doing in any creator's experience . It's it's the ability to analyze that and the ability to analyze the data that makes up a 3D experience .

Speaker #3: And in addition to maybe more traditional signals for discovery , use 3D and time based immersion signals to help predict what may be a good experience on our platform .

Speaker #3: That goes back to an interlock with what I shared with what I shared , which is every day on Roblox . There's over 30,000 years of potential 3D interaction , avatar training data available for us .

David Baszucki: That goes back to an interlock with what I shared, which is every day on Roblox, there's over 30,000 years of potential 3D interaction avatar training data available for us. The answer is yes, we will mix more content understanding, understanding of what makes experiences interesting and fun into our discovery mechanism. I'll kick it over to Naveen for the second part of that.

Speaker #3: So the answer is yes . We will mix more content . Understanding , understanding of what makes experiences interesting and fun into our discovery mechanism , and I'll kick it over to Naveen for the second part of that .

Speaker #4: Yeah , thanks . Hey , Ben , your or at least the second part of your hypothesis was correct in terms of the dynamic between hours growth versus monetization growth .

Naveen Chopra: Yeah, thanks. Hey, Ben, your, or at least the second part of your hypothesis was correct in terms of the dynamic between hours growth versus monetization growth, meaning it really is about geographic mix shift. You can see that if you look at, you know, in the supplementals, we have some disclosure around bookings per daily active user. I realize you were comparing monetization versus hours, but it's very similar dynamic. That is, if you look at this on a regional basis, very strong growth year over year. The mix of hours is skewing toward regions that just do monetize at a lower level. That's what you're seeing in the blended numbers. As I pointed out in my remarks, even at the regional level, we see some geographic mix shift between specific countries that impacts the monetization at the entire region. It really is all about growth in various regions.

Speaker #4: Meaning it really is about geographic mix shift . You can see that if you look at , you know , in the supplementals , we have some disclosure around bookings per daily active user .

Speaker #4: I realize you were comparing monetization versus hours , but it's very similar dynamic . I if you look at this on a regional basis , very strong growth year over year .

Speaker #4: But the mix of ours is skewing toward regions that just do monetize at a lower level . And that's what you're seeing in the blended numbers .

Speaker #4: And as I pointed out in my remarks , even at the regional level , we see some geographic mix shift between specific countries that impacts the monetization at the entire region .

Speaker #4: So it really is all about growth in various regions.

Speaker #1: We'll move next to Omar with Bank of America . Your line is open .

Operator: We'll move next to Omar Dessouky with Bank of America. Your line is open.

Speaker #10: Hi , Omar . Thank you . Hi . Guys . You know , so you called out the tough comp in in 26 .

Naveen Chopra: Hi, Omar Dasoki. Thank you. Hi, guys. You called out the tough comp in 2026 and some of the dynamics there. I'm looking back at Roblox. A lot has changed, obviously. New CFO, the company has almost doubled in size over the last two years. When things change, you may consider different approaches. With 2026 being such a tough comp year potentially, Roblox has never used advertising to attract users, either through ad networks or otherwise. Given that it sounded like Dave said that the virality of your hits is the main engine for user growth in a tough comp year like 2026, why wouldn't Roblox consider advertising to kind of smooth out these troughs and peaks in growth? That's my question.

Speaker #10: And some of the dynamics there . You know I'm looking back at Roblox a lot's changed obviously new CFO the company has almost doubled in size over the last two years .

Speaker #10: And when things change you may consider different approaches . And with 26 being such a tough comp year , potentially , you know , Roblox has never used advertising to attract users either through ad networks or otherwise .

Speaker #10: And you know , given that it sounded like Dave said , that the virality of your hits is the main engine for , you know , for user growth in a tough comp year like 26 , why wouldn't Roblox advertising ?

Speaker #10: You know , to kind of smooth out these troughs and peaks in in growth ? That's my question . consider Thank you .

David Baszucki: Thank you.

Speaker #3: Omar . Great question . Hey couple things to take a step back at big picture right now . We're simultaneously excited that we've nudged over 3% of the global gaming content market running on Roblox .

Naveen Chopra: Omar.

David Baszucki: Great question. Hey, couple things to take a step back at big picture right now. We're simultaneously excited that we've nudged over 3% of the global gaming content market running on Roblox, and at the same time, there's almost 97% out there. I continue to be enormously bullish as we roll out our tech and we expand genres and we do this really in a new way for gaming, complemented with AI. The second thing I do want to highlight is that this quarter, next quarter, we're rolling out a lot of what we shared at RDC, which supports massive expansion of the way Roblox works and the types of genres you correctly note. Roblox got to where it is primarily based on viral growth, but we do buy traffic.

Speaker #3: And at the same time , there's almost 97% out there . So I continue to be enormously bullish as we roll out our tech and we expand genres , and we do this really in a new way for gaming , complemented with AI .

Speaker #3: The second thing I do , I do want to highlight is that this quarter , next quarter , we're rolling out a lot of what we shared at RDC , which supports massive expansion of the way Roblox works and the types of genres you correctly note .

Speaker #3: Roblox got to where it is primarily based on viral growth , but we do by traffic . I don't know if it shows up in our financial statements , but we vary thoughtfully .

David Baszucki: I don't know if it shows up in our financial statements, but we very thoughtfully complement that with paid user acquisition. What we are testing and starting to roll out is the notion that we can partner with the creators on our platform to help them supercharge their paid acquisition in partnership with us. There's a future opportunity for us to expand paid acquisition where a creator may be a little hesitant to buy paid traffic and send that to Roblox because we get some benefit as well. They land in our client, that user may pay other experiences, but when we start sharing that with creators, there's an opportunity for both creators to expand paid acquisition and for us to support them and do it with them. We already do some paid acquisition. There's an opportunity to make this a lot larger.

Speaker #3: Complement that with paid user acquisition and what we are testing and starting to roll out is the notion that we can partner with the creators on our platform to help them supercharge their paid acquisition in partnership with us .

Speaker #3: And there's a a future opportunity for us to expand paid acquisition , where a creator may be a little hesitant to buy paid traffic and send that to Roblox because we get some benefit as well .

Speaker #3: They land in our client , that user may pay other experiences , but when we start sharing that with creators , there's an opportunity for both creators to expand paid acquisition .

Speaker #3: And for us to support them and do it with them . So we already do . Some paid acquisition . There's an opportunity to make this a lot larger .

Speaker #3: We always do this in a financially prudent way , which is appropriate . Return on ad spend in the right amount of time so that we're doing this incrementally .

David Baszucki: We always do this in a financially prudent way, which is appropriate return on ad spend in the right amount of time so that we're doing this incrementally. Yeah, great idea. We've got this in our sights to expand and Naveen, I don't know if you want to complement that at all.

Speaker #3: So yeah , great idea . We've got this in our sights to expand . And Naveen , I don't know if you want to compliment that at all .

Speaker #4: I think the only thing I would say is that in terms of overall scale of what we're spending on growth , marketing , it is still very modest and we rely on the tremendous organic growth that the platform still has .

Naveen Chopra: I think the only thing I would say is that in terms of overall scale of what we're spending on growth marketing, it is still very modest, and we rely on the tremendous organic growth that the platform still has. Steve said there's a lot of market white space yet for us to tackle, and we added close to 40 million users relative to Q2. The organic growth engine is working really well, and that will still be, I think, the primary driver of growth. There are some very interesting things that we can do, as Dave described in conjunction with our devs, to promote some of the content that is coming to the platform, which is consistent with our goals around genre expansion, content diversity, content velocity, etc. Looking forward to continuing to experiment with that.

Speaker #4: You know , as Dave said , there's a lot of market white space yet for us to tackle , and we added , I think close to 40 million users relative to Q2 .

Speaker #4: So the organic growth engine is working really well , and that will still be I think the primary driver of growth . But there are some very interesting things that we can do .

Speaker #4: As Dave described in conjunction with our devs to promote some of the content that is coming to the platform , which is consistent with our goals around genre expansion , content diversity , content velocity , etc.

Speaker #4: . So looking forward to continuing to experiment with that .

Speaker #1: Time for one last question from Clark Lumpkin with Btig . Your line is open .

Operator: Time for one last question from Clark Lampen with BTIG. Your line is open.

Speaker #12: Hey , thanks very much for taking the questions . I'll try to make these quick ones . Dave , you talked about making the platform more attractive to the creator community over the last two quarters .

Naveen Chopra: Hey, thanks very much for taking the questions. I'll try to make these quick ones. Dave, you talked about making the platform more attractive to the creator community. Over the last few quarters, we've obviously seen a really big spike in users. You've invested in Developer Exchange fees, tech, the platform. We obviously have a very good view into user growth, but a little bit less so on the developer side of the ecosystem. Has dev growth essentially held serve with users in a way where we could think about that sort of growing proportionate to DAUs, and maybe just take that a step further for Naveen. If we think about that and sort of the elasticity of growth and engagement, we've been through investment cycles in the past. This one feels a little bit different because it's AI oriented.

Speaker #12: We've obviously seen a really big spike in users . You've invested in developer exchange fees , tech , the platform we obviously have a very good view into user growth , but a little bit less so on the developer side of the ecosystem have has dev growth essentially held serve with users in a way where we could think about that sort of growing proportionate to dose and and maybe to take that a step further for Naveen , if we think about that , you know , and sort of the elasticity of growth and engagement , we've been through investment cycles in the past , this one feels a little bit different because it's AI oriented .

Speaker #12: Is there a reason to think that , like the yield on some of these investments , if we are seeing , you know , proportionate growth could be a little bit more immediate ?

Naveen Chopra: Is there a reason to think that the yield on some of these investments, if we are seeing, you know, proportionate growth, could be a little bit more immediate, and is that reflected in some of the comments around 2026. Thanks a lot.

Speaker #12: And if that reflected in some of the comments around 26 . Thanks a lot .

Speaker #3: Yeah , I'll go first and then I'll hand it over to Naveen on the yield side at RDC . And I don't know if we published this as part of this earnings .

David Baszucki: I'll go first and then I'll hand it over to Naveen on the yield side at Roblox Corporation. I don't know if we publish as part of this earnings. There's one spec or stat that we constantly share, which is some average is around top 10, top 100, top 1,000 devs and their year-on-year growth in bookings and engagement. We continuously see, I would say, a flattening of that tail where the top 1,000 looks very, very healthy. I think we're in a very healthy zone still. We continue to flatten that curve. We have many, many more creators making a living or making $1 million or making $10 million on the platform, and that all is continuing to grow. I believe we can extrapolate to the future, which is our vision of having 10% of that global gaming bookings running through our platform.

Speaker #3: There's one spec or stat that we constantly share , which is some averages around top ten , top 100 , top thousand devs and their year on year growth in bookings and engagement .

Speaker #3: And we continuously see I would say a flattening of that tail where the top thousand looks very , very healthy . So I think we're we're in a very healthy zone still .

Speaker #3: We continue to flatten that curve . We have many , many more creators making a living or making $1 million or making 10 million on the platform .

Speaker #3: And that all is continuing to grow . I believe we can extrapolate to the future , which is our vision of having 10% of that global gaming bookings running through our platform , and that gives a little bit of a perspective of what we would hope happens to that wide range of creators .

David Baszucki: That gives a little bit of a perspective of what we would hope happens to that wide range of creators on the platform. Just one highlight on infrastructure. We continue to highlight the movement to supporting our own bare metal data centers, both for Core Edge and AI, and complementing with Burst. This has been part of the key to our efficiency. I'll let Naveen speak on the yield of these investments as we get into that.

Speaker #3: On the platform . Just one highlight on infrastructure . We continue to highlight the movement to supporting our own bare metal data centers , both for core edge and AI and complementing with burst .

Speaker #3: We're . This has been part of the key to our efficiency , and I'll let Naveen speak on the yield of these investments as we get into that .

Speaker #4: Yeah , I think the the way to think about call it the , the payback period on these investments is that there are a variety of things that we are doing that we will start to see the fruit relatively quickly .

Naveen Chopra: Yeah, I think the way to think about, call it, the payback period on these investments is that there are a variety of things that we are doing that we will start to see the fruit relatively quickly. There are others that are more long term in nature. The AI stuff in particular, you know, there's a lot of AI investment that we've already made. You heard Dave talk about some of the benefits we're already seeing around discovery, economy, et cetera. I view those as having relatively near term payback. There are others that are going to be longer term and, quite frankly, it's going to take us a little while to roll out the CapEx to train and ultimately deploy these models to move them onto our own metal as you heard Dave describe.

Speaker #4: There are others that are more long term in nature . The excuse me , the AI stuff in particular . You know , there's a lot of AI investment that we've already made .

Speaker #4: You heard Dave talk about some of the benefits we're already seeing around discovery , economy , etc. so I view those as having relatively near-term payback .

Speaker #4: There are others that are going to be longer term and quite frankly , it's going to take us a little while to roll out the CapEx to train .

Speaker #4: And ultimately deploy these models to move them onto our own metal . As you heard , Dave , describe . So those are not necessarily going to have as immediate of a payback , but I think it's fair to say we're already getting benefit from a number of the investments that have been made on this front .

Naveen Chopra: Those are not necessarily going to have as immediate of a payback, but I think it's fair to say we're already getting benefit from a number of the investments that have been made on this front, call it in 2025 and increasingly in 2026 and beyond. I think that's our last question, so thank you all for joining, and then I will turn it back to Dave for any closing.

Speaker #4: Call it in 2025 . And increasingly in 26 and beyond . I think that's our last question . So thank you all for joining .

Speaker #4: And then I will turn it back to Dave for any closing comments .

Speaker #3: Hey , just want to once again , thank you all for your support and your insightful questions today . We look forward to continuing to innovate in our quest to have 10% of global gaming on the platform .

David Baszucki: Hey, just want to once again thank you all for your support and your insightful questions today. We look forward to continuing to innovate in our quest to have 10% of global gaming on the platform. Thank you all.

Speaker #3: Thank you all .

Operator: Thank you. That concludes today's conference call. Thank you for your participation. You may now disconnect.

David Baszucki: Sam, say it.