Roblox Q3 Revenue Rises 16% as Bookings Fall; Q4 Free Cash Flow Seen Negative

Roblox Corp. (NYSE: RBLX) reported higher third-quarter revenue and a narrower net loss, even as bookings and platform activity declined from a year earlier. The divergence remained central to its fourth-quarter outlook, which calls for continued revenue growth but another year-over-year decrease in bookings, alongside negative adjusted EBITDA and free cash flow.

For the three months ended September 30, 2026, revenue increased 16% year over year to $1.57 billion. Bookings, a non-GAAP measure of sales activity before certain non-cash adjustments, fell 12% to $1.70 billion. The difference reflected a sharp reduction in the increase in deferred revenue, which was $136 million compared with $573 million a year earlier.

Roblox recognizes most virtual-currency purchases as revenue over the estimated period that associated virtual items remain available, rather than entirely when users make purchases. The estimated average lifetime of a paying user was 27 months in the quarter, while durable virtual items accounted for 90% of virtual item-related revenue.

Loss Narrows as Adjusted EBITDA Rises

Roblox’s consolidated net loss narrowed 11% to $230 million from $258 million in the prior-year quarter. Adjusted EBITDA rose to $138 million from $46 million, excluding items including interest, taxes, depreciation and amortization, stock-based compensation, and certain non-routine charges.

The reconciliation included $298 million of stock-based compensation, up 4%, as well as $49 million of legal settlement expenses related to youth-focused consumer protection and digital safety matters. Roblox said those legal costs arose outside its ordinary course of business and were excluded from adjusted EBITDA.

The platform averaged 138 million daily active users during the quarter, with 34 billion hours engaged. The presentation’s regional data indicated that total DAUs declined 9% year over year and hours engaged fell 15%. Roblox has cautioned that its user and engagement figures rely on internal systems and estimates that may be affected by methodological changes, age-checking data, bot activity and other measurement constraints.

Cash Generation Declines

Net cash provided by operating activities decreased 28% to $395 million. Free cash flow fell 18% to $364 million after $28 million of property and equipment purchases and $3 million of intangible-asset purchases.

Roblox ended the period with $6.2 billion in cash, cash equivalents and investments. Net cash and investments, after debt, totaled $5.2 billion.

The company had 716 million Class A and Class B common shares outstanding as of September 30, up 2% from a year earlier. Including outstanding options and other potentially dilutive awards, the total was 755 million shares, also 2% higher.

Fourth-Quarter Bookings and Cash Flow Expected to Fall

For the fourth quarter of 2026, Roblox expects revenue of $1.47 billion to $1.58 billion, representing year-over-year growth of 4% to 12%. Bookings are projected at $1.89 billion to $2.00 billion, down 10% to 15% from $2.22 billion in the fourth quarter of 2025.

The company forecasts a consolidated net loss of $363 million to $423 million, compared with a $318 million loss a year earlier. Adjusted EBITDA is expected to range from a loss of $70 million to a loss of $10 million, versus positive adjusted EBITDA of $3 million in the prior-year period.

Operating cash flow is expected to be between $190 million and $275 million, down 55% to 69% year over year. With planned capital expenditures of $380 million, Roblox projects negative free cash flow of $105 million to $190 million, compared with positive free cash flow of $307 million a year earlier.

The revenue outlook assumes no material changes to estimates used in revenue recognition, including the allocation between consumable and durable virtual goods and the estimated lifetime of a paying user. Net-loss guidance excludes potential loss-contingency accruals because of uncertainty around their probability and possible size.

Roblox identified additional uncertainties around user and creator retention, the durability of viral content, infrastructure scaling, trust and safety initiatives, changing regulation, unauthorized platform use, global economic conditions and the effects of artificial intelligence. The company also noted that seasonality and the performance of viral games can materially affect demand and operating results.