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Earnings results often indicate what direction a company will take in the months ahead. With Q4 behind us, let’s have a look at Roblox (NYSE:RBLX) and its peers.
Since videogames were invented in the 1970s, they have gradually taken more share of entertainment time. Ubiquitous mobile devices have powered a surge in “snackable” games that can be played on the go. Over time, games have developed more social engagement features where friends can play games together over the internet. The business models of games publishers have become less volatile due to digitization of distribution, in game monetization, and like Hollywood, an increasing dependence on surefire hit franchises. Covid driven lockdowns accelerated adoption and usage of videogames – a trend that has not slowed.
The 4 video gaming stocks we track reported a softer Q4. As a group, revenues missed analysts’ consensus estimates by 5.9% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 8.1% on average since the latest earnings results.
Roblox (NYSE:RBLX)
Best known for its wide assortment of user-generated content, Roblox (NYSE:RBLX) is an online gaming platform and game creation system.
Roblox reported revenues of $988.2 million, up 31.8% year on year. This print exceeded analysts’ expectations by 1.9%. Despite the top-line beat, it was still a slower quarter for the company with full-year EBITDA guidance missing analysts’ expectations.
“Roblox had a strong 2024, driven by our commitment to innovation and community. We’re building a platform that goes beyond technology—it’s about fostering genuine connections. As we aim to support 10% of the global gaming content market, we’ll continue investing in our virtual economy, app performance, and AI-powered discovery and safety, empowering creators and enhancing the user experience,” said David Baszucki, founder and CEO of Roblox.
Roblox achieved the biggest analyst estimates beat and fastest revenue growth, but had the weakest full-year guidance update of the whole group. The company reported 85.3 million daily active users, up 19.3% year on year. Still, the market seems discontent with the results. The stock is down 21% since reporting and currently trades at $66.85.
Is now the time to buy Roblox? Access our full analysis of the earnings results here, it’s free.
Best Q4: Electronic Arts (NASDAQ:EA)
Best known for its Madden NFL and FIFA sports franchises, Electronic Arts (NASDAQ:EA) is one of the world’s largest video game publishers.
Electronic Arts reported revenues of $1.88 billion, down 3.2% year on year, falling short of analysts’ expectations by 4.6%. The business performed better than its peers, but it was unfortunately a mixed quarter with EPS guidance for next quarter exceeding analysts’ expectations but a significant miss of analysts’ EBITDA estimates.