July 30 (Reuters) – Gaming platform Roblox forecast quarterly bookings below Wall Street estimates on Thursday, as tougher age-verification measures weigh on onboarding and engagement, sending its shares down about 12% in after-hours trading.
The company has implemented age verification following heightened scrutiny of its child-safety practices, but the added steps have made it harder to sign up and reduced access to certain features that help keep users engaged.
Roblox’s average daily active users (DAU) fell 7% sequentially to 123 million in the second quarter, but were up 10% from a year earlier.
“To date, the short-term impact from Kids and Select on engagement and bookings has been in line with our expectations, and we have seen an increase in age-check penetration in younger cohorts,” the company said.
Roblox, which allows users to build and explore their own digital worlds on its platform, expects bookings between $1.58 billion and $1.65 billion in the third quarter, compared with estimates of $1.77 billion, according to data compiled by LSEG.
Having built its business around younger players during the pandemic, Roblox has increasingly focused on attracting older users and expanding internationally to diversify growth.
Users over 18 years accounted for 27% of age-verified DAUs in the second quarter, the company said, a particularly valuable group as U.S. users aged 18 and older generate more than 50% higher monetization than users under 18.
(Reporting by Harshita Mary Varghese in Bengaluru; Editing by Sahal Muhammed and Sriraj Kalluvila)
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