Roblox, the platform for user-generated games, will go public through a direct listing of its shares on March 10. The company also reported that it lost $253.3 million on revenues of $923.9 million for the year ended December 31.
The San Mateo, California-based company original planned for an initial public offering last fall, but it postponed that plan and raised $520 million in funding from private sources instead at a valuation of $29.5 billion. And now it shifted plans from an IPO to the direct listing, where the company’s shareholders will sell shares but the company itself will not raise any new capital.
The announcement comes at a time when the game industry is one of the few economic sectors that is doing well during the pandemic. Game engine maker Unity raised $1.3 billion at a $13.6 billion valuation in an IPO on September 18, even though it is losing money. Unity’s shares are up considerably since trading began. Playtika also raised $1.9 billion at a $11.4 billion valuation in an IPO in December.
Skillz, which turns games into skill-based cash reward competitions, went public on December 17 at a $3.5 billion valuation through a special public acquisition company (SPAC). Playstudios and Nexters are also planning SPACs. Games have become so hot that it’s hard for Roblox to determine the right price for an IPO.
Roblox’s plan to list earlier were held up by the Securities and Exchange Commission, which asked for accounting changes on the sale of virtual currency, Robux, which is how the company generates revenue from its users. Players purchase Robux and spend the money in games generated by users themselves. Roblox keeps 30% of the revenue and shares the bulk with developers.
Above: Roblox’s annual figures
Image Credit: Roblox
The direct listing method has been used by Spotify and Slack, and it saves money on fees paid to investment banks in IPOs. Roblox will trade on the New York Stock Exchange under the symbol RBLX.
The company said revenue grew 82% last year to $923.9 million for the year ended December 31. Bookings more than doubled to about $1.9 billion. But the company lost $253.3 million in 2020, wider than the $71 million lost in 2019, thanks to a big increase in expenses for infrastructure, sales, safety, marketing, and research and development.
Roblox said that, as of December 31, there were over 20 million user-created experiences on Roblox. In 2020, over 13 million of these were visited or used by the community. The daily active users rose from 17.6 million on average in 2019 to 32.6 million in 2020.
The community of active developers is above 8 million. Over 1.25 million developers earned Robux on the platform. About 4,300 earned more than 100,000 Robux. Over 1,250 earned more than $10,000, and 300 developers earned more than $100,000. Hours engaged on Roblox grew 45% from 9.4 billion in 2018 to 13.7 billion in 2019 and grew 124%, to 30.6 billion, in 2020.
Above: Roblox’s earnings pyramid.
Image Credit: Roblox
Daily paying users on Roblox grew from approximately 125,000 in 2018 to approximately 184,000 in 2019, and approximately 490,000 in 2020. Revenue grew 56% from $325.0 million in 2018 to $508.4 million in 2019 and grew 82%, to $923.9 million, in 2020. Bookings grew 39% from $499.0 million in 2018 to $694.3 million in 2019 and grew 171%, to approximately $1.9 billion, in 2020.
Net loss was $88.1 million, $71.0 million, and $253.3 million in 2018, 2019, and 2020, respectively. Net cash provided by operating activities was $101.0 million, $99.2 million, and $524.3 million in 2018, 2019, and 2020 respectively.
Free cash flow was $35.0 million, $14.5 million, and $411.2 million in 2018, 2019, and 2020, respectively.
In the year ended December 31, 2020, users spent 30.6 billion hours engaged on the platform, or an average of 2.6 hours per daily active user each day. Over the same period, our users explored an average of around 20 different experiences on the Roblox platform per month.
In December, Roblox acquired Loom.ai, a maker of 3D avatars. It disclosed that the purchase price was $86.7 million in stock and cash. And in November, Roblox acquired the assets of Imbellus, a human thought process software company, for $11.7 million in cash and stock.
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