Mike Guthrie: And we do see signs of different kinds of content being popular in different parts of the world, and that obviously speaks to massive developer community. And when you have that €“ again, that flywheel of content and users, it’s very powerful. So what we see being very popular in Japan is slightly different than what we see in other parts of the world, slightly different than Europe, slightly different than the U.S. There’s generally a certain measurement of local affinity. And so the more we lean into the community, which we certainly did again last year, significant investments in our creator community, the more content that’s appealing to more people around the world, and I think we’re just continuing to see that leverage.
Bernie McTernan: That’s great to hear. Thank you. And just as a follow-up to one of the previous questions on fixed costs. If we look at R&D and trust and safety, is there just a rough breakdown the rule of thumb we can think about for how those buckets are people versus infrastructure?
David Baszucki: I can go very high level on that. Trust and safety, we believe which is our top priority over time, has a lot of headroom around automation. And our view as we add more ML and more automation to our trust and safety systems, we’re optimistic this is going to scale well below a linear type rate. Whereas with R&D, we have a fair amount of more control on the more engineers we hire, the faster we can develop product and so tend to balance that independently. But look for trust and safety to scale below linear as we grow.
Mike Guthrie: And Bernie, we can spend some time on the model, but let me make a comment. I hope is helpful and let’s see if I get towards your question. On trust and safety, most of the cost today is headcount related. I think over time, it won’t all be headcount related, but that is more of a fixed cost in the short run number where you get leverage over time. Infra is about running data centers and the cost of the data center. So think of those as more like fixed cost investments where they get absorbed over time as the user base grows. And as the user base monetizes, you’ll see absorption of that and then leverage on the model. So the infra is almost all the cost of the data center is very few people cost and trust and safety is the opposite.
Bernie McTernan: Understood. Thanks guys.
Mike Guthrie: Okay.
Operator: Your next question is from the line of Brandon Ross with LightShed Partners. Your line is open.
Brandon Ross: Hey. How are you? Thanks for taking the questions. Kind of sticking on the cost theme here. I think in response to David’s earlier question and a few times throughout the call you talked about reinvestment in the community. And you paid developers more than ever in Q4. But if I look at it on a percentage of bookings basis, DevEx came down to, I think 20%, the lowest it’s been in five quarters. I was wondering if you could €“ that doesn’t feel like an area that would benefit from leverage. So just wondering what your thoughts are on the trajectory of how you’re paying the devs community on a percent of bookings basis and what you see going forward as we kind of clean up our models?
Mike Guthrie: Yes, Brandon, so it’s not intended to go down as a percentage of bookings. Bookings grew very quickly in the fourth quarter. So we had a little bit of, again, absorption if you will of the cost. And so €“ but generally, if you look at that over the last three or four years, you’re going to see a shift of a few hundred basis points. So December was €“ Q4 in general was a little bit unusual because of the spike in the growth rate of bookings. Our intention is to continue to move more of the economics towards the dev community. Our intention is to continue to find innovative and cool ways for the devs to monetize on the platform through various sources of bookings and monetization. And yes, normally, I would expect that, that’s one number that I can tell you will go up as a percentage of bookings this quarter and throughout the course of the year.
So I’ll go back up to where we have been, which is like that 22%, 23% range, and we’ll still try to push through higher numbers. So what you’re seeing in Q4 was unintended leverage because of the top line. Does that make sense?
Brandon Ross: Yes. Essentially, it’s timing. It’s like you’re timing.
Mike Guthrie: Timing okay. That’s right. That’s a good way to put it.
Brandon Ross: Just simple…
Mike Guthrie: In the month of December, that number €“ the amount of capital at the dev community was an all-time high. And obviously it’s a seasonal number because it’s €“ because we obviously have high bookings and it’s largely variable. But we noticed, as we did the math that if the run rate at December, you €“ we can see it in the near future where the market availability for debt is $1 billion plus, which is really exciting for us.
Brandon Ross: Great. And then I wanted to dig in a little bit on brands and advertising because that was a highlight at RDC and your Investor Day. So couple of questions there. How of the ad test gone that you’ve been €“ that you’ve been executing on? And do you expect advertising to be any kind of real contributor this year or next? And you mentioned brand experience the likes of Elton John, which actually caught my attention because the fan base for Elton is obviously much older than probably your typical user. And so, have those been successful from an engagement perspective? And how €“ to what extent our experiences like that driving this age up that we’re really seeing from you guys?
David Baszucki: Yes. They are a part of it and for performers like Elton John, we see millions and millions of people visiting their experience. But that’s just a part of it, there’s continuously more and more high-quality content that is a daily, weekly, monthly place where our older players come to visit as well. We are in the very early innings of advertising right now. We are €“ we have our eyes right on the target of making this a self-service platform above and beyond the early experiences we’re doing with brands. And we believe there’s a huge market for on-platform advertising for brands who want to bring people to their experiences to engage. We’ve been very, very conservative on the forecast this year as far as the contribution from advertising.
But when we look at other platforms and whether it’s print or online, web or video and we look at the level of engagement on those platforms relative to on Roblox, obviously the opportunity is really, really large. So you will see us this year rolling out more and more self-serve capabilities for advertising but we’re being very conservative on the contribution.
Mike Guthrie: And Brandon, we’re going to move on, just because we only have time for one more question, but we can catch up with you after. Thank you for the question. All right. We have time for one more.
Operator: Your final question comes from the line of Clark Lampen with BTIG. Your line is open.
Clark Lampen: Hey. Thanks guys. Two quick ones, I guess, for me. Dave, I guess, just to clarify, was there any contribution from advertising or a meaningful one in the first quarter or in January, I guess, I should say. And could you comment maybe a little bit more on sort of what’s working or not working? You talked about the ad units, sort of teleportation and then also more static units last quarter. Anything, I guess that you would call out in terms of advertiser or more to response so far? And then, Mike, if there’s time, could you remind us, I guess, given some of the lumpiness with sort of COVID and comps over the last year or two, what sort of seasonal patterns maybe we should expect for either the duration of metrics reports for the next sort of quarter or two? Thanks.
David Baszucki: Yes. We are working with a select number of brands as part of our early experiments with advertising. I think any contribution that would shop essentially shouldn’t be considered right now. We’ve got our eye on the prize of self-serve this year, at which point you’ll start to see the contribution.
Mike Guthrie: Yes. So Clark, on comps, we’re largely, I think, through COVID comparisons, which is nice to say. This time last year we were basically coming out of Omicron. And so we don’t really €“ other than in emerging markets, we don’t see too much of COVID variability in our numbers. And I think getting through that in December and January has been helpful and has cleaned up the analysis for people. So I think going forward, I’m optimistic that we’re more or less through that. I would €“ it seems to me like December and January performance would indicate that we’re done with that. So anyway, so I assume for the rest of the quarter we’ll feel the same way. We shouldn’t see anything around COVID meaningfully affecting the numbers. Again, some of the emerging markets are a little bit behind where we are in the U.S. and Europe. But we don’t really see that. We look through our trend data; we don’t see big swings related to COVID anymore.
