Roblox goes public on the stock market with an IPO filing, confirms it’s operating at a loss

    
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The massively popular online game-building game Roblox is going to toss its hat into the stock market ring. The company has officially filed an initial public offering (IPO) with the US Securities and Exchange Commission under the suggested ticker name RBLX.

In addition to going public on the stock market, the filing has unveiled a number of financial details from the past three years, with $312 million in revenue in 2018, $488 million in 2019, and $589 million for the nine months ending September 30th, 2020, an increase of 68% from the same time last year. With all that said, Roblox has been experiencing net losses: $97.2 million in 2018, $86 million in 2019, and currently $203 million for the nine months ending September 30, 2020, in spite of massive numbers of unique users and revenue.

As is common in IPO filings, Roblox’s filing points out a number of risks such as seasonality, dependence on online networks, and the effects of COVID-19. In addition, there are other specific risks outlined by the company, noting that its rapid growth may not be indicative of its future trajectory, that the company expects to continue to incur net losses in the near future, and that it may not be able to be profitable. “If our DAU growth does not increase to offset these anticipated increases in our operating expenses, our business, results of operations, and financial condition will be harmed, and we may not be able to achieve or maintain profitability,” reads part of the filing.

Still, there’s no reason to panic; as VentureBeat points out, Unity’s IPO managed to raise over a billion bucks this past fall in spite of losing money, and its stock value just keeps increasing.

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Tom316

How in the heck do you make $589 million and end up having $203 million in net losses. This company must be upside down and have horrible management. They are making darn near $65 mil a month and can not keep from operating with a net loss. Doesn’t make any sense and I would love to see what there devs and management is getting paid. Someone is banking some nice $$$ at this company.

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agemyth 😩

Wow one of the biggest names in gaming has been losing money for years despite being considered a huge success story all this time.

This economy is stupid.

MilitiaMasterV
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MilitiaMasterV

I will admit to my math skills being awful, but if I understood what was said there, they got $1,002,800,000 in revenue and are not operating any sort of ‘loss’ at all, because you take your revenue and subtract any losses…as the cost of doing business. That would mean they are sitting ‘quite pretty’ actually…

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bobfish

No, they are running at a loss each year and have been kept afloat by investment money they are eating into.

They are basically spending as much as possible to grow as much as possible, so that when they go public, they can sell a lot of expensive shares and the owners/investors can make a huge profit. Because the stock market operates on Revenue not Profit.

Once public, after the IPO, they will need to slow down and turn a profit, but I suspect that will be quite easy, they’ll just produce a lot less content and cut marketing to almost nothing. Maybe even fire a lot of their staff. That will bump their share price nicely, then the shareholders will get a payout in 2022, and they’re happy too.

I think its an awful way to run a company, but its pretty common, just not so much in the games industry.

MilitiaMasterV
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MilitiaMasterV

I find it amusing that people think the stock market actually represents the economy. Many people are not even participating in it still to this day, and people on there are ‘reaping returns’ and ‘doing great’ and thinking that’s representative of the general state of things…meanwhile, the world’s collapsing because of the virus going around and wiping so many people out. It’s like there’s some kind of disconnect from reality when you jump in that pond. As an outsider looking in, I can’t wait for the inevitable collapse of the house of cards they’ve built…

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Giggilybits

Weird. They have operating costs of 792 million dollars? Servers must be expesnive.

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Armsman

Well, they can also amortize these losses on their business tax returns for the next 20 years – so in the end, we the average joe taxpayer foot the bill.