3. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders as of Q4: 61
12 West Capital Management’s Equity Stake: $119.31 Million
Roblox Corporation (NYSE:RBLX), established in 2006 and based in San Mateo, California, has been a significant presence in the gaming industry, though it only recently gained widespread recognition. This rise in popularity led to a substantial increase in valuation, from $2.5 billion in 2018 to nearly $38 billion when it debuted on the New York Stock Exchange in 2021. In 2024, the company reported revenue of $3.6 billion, reflecting a 28.7% year-over-year increase. Additionally, it distributed $923 million to creators, reinforcing its commitment to user-generated content and the expansion of its virtual economy.
CEO David Baszucki emphasized the company’s focus on innovation and fostering connections within its digital ecosystem. He outlined Roblox Corporation (NYSE:RBLX)’s ambition to capture 10% of the global gaming content market while continuing investments in its virtual economy, AI-driven discovery, and platform security. Full-year revenue and bookings increased by 29% and 24%, respectively, underscoring the scalability and efficiency of Roblox’s business model.
Roblox Corporation (NYSE:RBLX) demonstrated strong financial growth in 2024, achieving $3.6 billion in revenue and $4.37 billion in bookings, reflecting 29% and 24% year-over-year increases respectively. Adjusted EBITDA reached $180.2 million while operating cash flow surged 79% to $822.3 million. Free cash flow also saw substantial growth, reaching $641.3 million, highlighting the company’s ability to generate liquidity while investing in expansion.
For 2025, Roblox Corporation (NYSE:RBLX) projects continued financial momentum, expecting full-year revenue between $4.25 billion and $4.35 billion, with bookings anticipated to range from $5.2 billion to $5.3 billion. The company forecasts a consolidated net loss between $995 million and $1.07 billion and an adjusted EBITDA between $190 million and $265 million. Operating cash flow is expected to fall between $1.05 billion and $1.11 billion, while free cash flow is projected to range from $800 million to $860 million. With strategic investments in technology, content development, and monetization, Roblox remains well-positioned for sustained long-term growth.
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)
