Toys-as-games-platform maker Roblox has today filed paperwork with the Securities and Exchange Commission for an initial public offering. The company has been planning the move for at least the last couple of months, and it had publicly stated to CNBC that they were looking to take the company public.
As part of the filing requirements, Roblox has disclosed a number of salient points regarding its revenues and its projected future earnings, and a report from Gamesindustry.biz has a breakdown of the numbers. Gross revenues have been substantial and growing year-to-year, from $312 million USD in 2018 to $589 million USD as of September 30 of this year.
However, net losses have also grown in a proportionate manner, with $97 million USD in 2018, up to a staggering $203 million USD in the first nine months of this year. The company has not turned a profit since being founded in 2004.
The number of daily active users has been growing rapidly in the last few years, with 12 million in 2018 rising to 31 million as of the end of September 2020. More interestingly are numbers regarding developers who create content on the platform. Almost a million developers have earned at least some "Robux" (the platform's in-game currency), with over a thousand earning $10,000 USD worth of the currency and almost 250 earning $100,000 USD equivalent or more.
Roblox laid out potential risks for the company. Some are the usual factors of the games industry: seasonal shifts, dependence on online networks, potential regulatory shifts. Others are more unique, such as the currently ongoing COVID-19 pandemic. And some are uniquely related to Roblox specifically. The fact it has not turned a profit since it started is addressed and expanded upon, with the company stating that they may not be able to achieve or maintain profitability, especially when they have periods of rapid growth which might not translate to future profit. Another risk relates to the DAU count, its volatility, and the necessity of maintaining an ever-increasing number of active users to offset expenses.
User safety was also addressed, with Roblox stating that since the bulk of their user base are children, difficulties in keeping users safe from online predators could cause the business to suffer "dramatically." Finally, Roblox points to potential regulatory and government policy differences which could impact their joint venture with Tencent to create Roblox China.
The company hopes to see its valuation double to $8 billion USD as a result of this IPO.