David Baszucki: And on future platforms, the vision would be immersive 3D multiplayer communication and connection technology. Ultimately, it should run on any form factor and any device.
Brandon Ross: Great. And then on the DevEx, just to clarify from earlier, was it the loophole that made DevEx only 20% of bookings in the quarter? And then like generally on DevEx, how are you thinking about your profit and cash flow generation off the leverage and kind of cost control versus giving back to the dev community kind of what goes into that decision and how will advertising affect that?
Michael Guthrie: So there’s a lot in that question. So first and foremost, our goal is to continue to push high growth in DevEx to the community. The investment that we make there is why we have great content and growing content. And so, we’re always looking for ways to grow that overall. Our desire, Brandon, on leveraging cash flow is really to leverage the efficiency in our fixed cost, which is around headcount and infrastructure. Those are the primary fixed costs in the business. Generally over the last few years of COGS, as we have seen efficiency in COGS, we’ve tried to share those pretty much dollar for dollar with the community and that’s been really effective. And so historically, if you look back three or four years, the DevEx rates were quite a bit lower than they are today.
So we’re in a much more sustainable place and an ability to continue to push more of those economics to the developers. As we open up the economy, things like advertising, we fully intend for the community to participate in those economics. And so we’re really excited about the scale and the growth and the ability to continue to invest in it, because that’s really what’s driving the flywheel, it’s content and users, and that investment that we make pays back. So we’re always trying to grow it.
Brandon Ross: Awesome. Thank you.
David Baszucki: Thanks, Brandon.
Operator: Your next question comes from the line of Matthew Cost from Morgan Stanley. Please go ahead.
Matthew Cost: Hi, everybody. Thanks for taking the questions. Maybe I’ll start with one for Dave and then one for Mike. Just on the AI tools, you mentioned the moderation pipeline shifting more in that direction, and then a lot of exciting use cases for those new tools. Are you still on track to build everything you’re planning to build from an AI perspective on open source or from scratch? And is that from a CapEx and headcount perspective, is that fully baked into kind of your view from here?
David Baszucki: Yeah, I think we have so much breadth in the AI. We’ve highlighted we’ve got 70 ML pipelines running right now inside the company that goes all the way from our safety systems, moderation systems, real-time translation systems, gets into our search and discovery systems, and then gets into more of the user-facing things, like Roblox Assistant. I think the big takeaway is, we want to run super high volume inference, for example, voice, as much as possible on our own hardware so we can do this extremely efficiently. And I would highlight on our edge data centers using as much as possible the same hardware to run inference. It gives us the ability in parts of the world that are not as active to use that for inference.
As far as the collection of tools we’re using, I would say generally yes, yes, yes, open source. The market is in a really interesting time as far as what people are building and training and tuning and distilling and optimizing internally. And we’re building a full AI internal platform that many of our teams will then use for high performance inference.
Matthew Cost: Thanks. And then for Mike. I just want to revisit the goal of $800 million of DevEx that you guys mentioned last quarter. I think in order to hit that versus consensus, you’d need to do 26% of bookings as DevEx next quarter. I guess, are you reiterating that $800 million target?
Michael Guthrie: So I think we’ve talked about this, Matt, many, many times. So it would be unlikely for us to hit $800 million this year. But if you look at what we are accomplishing this year, it’s a massive pool of capital that has grown at very high rates over the last few years. And we’re super excited about what we are delivering to developers this year, just like we’re excited with the top line growth in the business and the operating margins of the business. So, incredibly proud of the numbers that we’re printing and incredibly proud of how the developers are sharing in that. And we’re going to continue to drive efficiencies across the business. And that’s what we’re going to focus on.
Matthew Cost: Great. Thank you.
Operator: Your next question comes from the line of Eric Sheridan from Goldman Sachs. Please go ahead.
Eric Sheridan: Thanks so much for taking the questions. Maybe two that are sort of follow-ups to topics we’ve talked about and hopefully not front running next week. But to put a finer point on it, when you think about the developer community and lining up platform investments to meet the needs of the developer community. What are your highest priority items as you move out of 2023 and into 2024? And then to come back on the infrastructure investment, is there a way to think about capacity utilization in your data center network and how much excess capacity you have right now to better understand engagement growth and filling that capacity to where capex could be coming in under expectations like now versus a more normalized trend longer term? Thanks so much.
David Baszucki: Yeah. I’m going to go really fast on three points. On core data centers, we want to highlight just our infra platform teams ruthlessly at improving quality efficiency performance of all of our componentry there to really squeeze out as much as we can on the cost side. Also on our cloud expenses, we’re being very, very thoughtful there, moving as much cost internally as possible. On the edge capacity, just highlighted ability to run inference on the same grid where we run real time simulation, so we can run more and more inference for super, super low cost. So a little bit of a vision there as well.
Michael Guthrie: And Eric, I’m not going to give you a direct number on capacity, but I would suggest to you that our capacity has quite a long way to go. It’s not through 2024 for sure before we would have to start thinking about adding capacity. So we’re in a really comfortable place right now.
Operator: We have time for one more question. Tom Champion from Piper Sandler. Please go ahead.
Unidentified Analyst: Hi, thanks. This is Jim on for Tom. Just a quick one on cost of revenue. So we’ve seen this shift toward bookings through lower fee channels. I guess, can we sort of talk about has that trend continued and how should we think about modellings, like leverage in that line going forward? Thanks.
David Baszucki: I’ll go through this at really high level and Mike, you talk about modelling. You’re highlighting more the complexity once again consumable, durable, different mix shift. As an example, developer subscriptions on the platform over time with some of our partners may have different COGS than other type of Roblox purchases, which bodes well for COGS. Prepaid business bodes well for COGS as well. Mike may talk more about the mix shift.
