5. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders as of Q4: 61
Ark Invest’s Equity Stake: $586.85 Million
Founded in 2006 and headquartered in San Mateo, California, Roblox Corporation (NYSE:RBLX) has been a long-standing player in the gaming industry but has only recently gained mainstream recognition. This surge in popularity significantly boosted its valuation, climbing from $2.5 billion in 2018 to nearly $38 billion upon its debut on the New York Stock Exchange in 2021. In 2024, Roblox reported a revenue of $3.6 billion, reflecting a 28.7% year-over-year increase. The company also paid out $923 million to creators, reinforcing its commitment to supporting user-generated content and expanding its virtual economy.
Roblox CEO David Baszucki highlighted the company’s focus on innovation and fostering meaningful connections within its digital ecosystem. He emphasized Roblox Corporation (NYSE:RBLX)’s ambition to capture 10% of the global gaming content market while continuing to invest in its virtual economy, AI-powered discovery, and platform safety. Chief Financial Officer Michael Guthrie echoed this sentiment, noting that Q4 2024 results met or exceeded previous guidance. Full-year revenue and bookings increased by 29% and 24%, respectively, showcasing the scalability and efficiency of the company’s business model.
Roblox Corporation (NYSE:RBLX)’s financial performance in 2024 demonstrated strong growth; the company achieved $3.6 billion in revenue and $4.37 billion in bookings, marking a 29% and 24% year-over-year increase, respectively. Adjusted EBITDA stood at $180.2 million, while cash provided by operating activities climbed 79% to $822.3 million. Free cash flow also experienced substantial growth, reaching $641.3 million, underscoring Roblox’s ability to generate liquidity while investing in future expansion.
Looking ahead, Roblox Corporation (NYSE:RBLX) projects continued financial momentum in 2025, forecasting full-year revenue between $4.25 billion and $4.35 billion, with bookings expected to reach between $5.2 billion and $5.3 billion. The company anticipates a consolidated net loss between $995 million and $1.07 billion, alongside an adjusted EBITDA range of $190 million to $265 million. Operating cash flow is estimated to be between $1.05 billion and $1.11 billion, while free cash flow is projected between $800 million and $860 million. With strategic investments in technology, content, and monetization strategies, Roblox remains well-positioned for long-term growth and expansion.
SaltLight Capital stated the following regarding Roblox Corporation (NYSE:RBLX) in its Q3 2024 investor letter:
“Roblox Corporation (NYSE:RBLX) has firmly established itself as the dominant player in user-generated gaming within Western markets. Meanwhile, Tencent has developed a similar ecosystem in China with its WeChat Mini-games platform. Owning both gives us a unique vantage point to assess the evolving landscape of user-generated gaming platforms globally.
At its recent investor day, Roblox set an ambitious target of reaching 10% of gaming content revenue, of which it estimates the total pool is around $180bn (for context, in the last twelve months, it made $4bn in bookings).
We think this will be a challenging target, but it will be positive for the business directionally. The reason is that Roblox has spent the last three years heavily investing in re-engineering its game platform to be high fidelity, performant and widely available across platforms. They also share economics with their creators to the point now that the absolute numbers in highly engaged games are enough to support a small game studio. The result is that the quality of games has materially improved, attracting additional engagement – particularly from older users…” (Click here to read the full text)
