Roblox Corp. (NYSE:RBLX) saw its shares plunge nearly 22% in premarket trading on Friday after the company sharply lowered its full-year bookings outlook, pointing to headwinds linked to its age-verification rollout, which has limited user interaction and slowed new user growth.
Q1 Results Mixed as Engagement Metrics Miss Expectations
The gaming platform reported first-quarter bookings of $1.7 billion, slightly below analyst estimates of $1.74 billion. Revenue came in at $1.4 billion, up 39% year over year but missing the $1.42 billion consensus forecast. Adjusted earnings per share of -$0.35 beat expectations of -$0.41.
However, key engagement metrics disappointed. Daily active users reached 132 million, well below the expected 143.8 million, while total hours engaged stood at 31 billion, missing forecasts of 33.68 billion.
Guidance Cut Signals Slower Growth Outlook
Roblox reduced its full-year 2026 bookings guidance to between $7.33 billion and $7.6 billion, down from its previous range of $8.28 billion to $8.55 billion. The midpoint of $7.47 billion falls significantly short of the analyst consensus of $8.38 billion.
For the second quarter, the company expects bookings in the range of $1.55 billion to $1.61 billion, with a midpoint of $1.58 billion, also well below the $1.88 billion market expectation.
“While our aggressive push to enhance safety lowers our expectations for topline growth in 2026, it makes our platform fundamentally better and amplifies the long-term growth potential of Roblox,” the company said in its shareholder letter.
Age Verification and Regional Restrictions Weigh on Growth
The company attributed the downgrade in guidance to stronger-than-anticipated headwinds from its mandatory age-verification rollout, introduced in January. The changes have limited communication for users who have not completed age checks and slowed new user acquisition.
Additionally, the platform’s ban in Russia, implemented in December 2025, has contributed to weaker growth momentum.
“Top of funnel growth seems to have hit the wall following age verification rollouts, likely a phenomenon being seen across the entire U-16 social internet currently,” said Ross Sandler in a post-earnings note.
“While disappointing near-term, this shouldn’t impact RBLX’s centrality to multiplayer interactive 3D gaming over the long run,” he added.
Analysts Turn Cautious Despite Strong Cash Flow
Separately, Andrew Marok downgraded the stock to Market Perform, stating that Roblox’s “guidance reset confirms that safety and discovery changes are creating larger-than-expected near-term pressure on engagement and growth.”
Despite these challenges, Roblox generated $596 million in free cash flow during the quarter, up 40% year over year and ahead of the $564.5 million estimate.
The company also introduced Roblox Plus, a $4.99 monthly subscription service aimed at increasing retention among its most engaged users.