Roblox Corporation

Good morning. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Roblox fourth quarter and full year 2022 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star 1. Thank you. Stephanie Notani, you may begin your conference.

Thank you. Good morning, everyone, and thank you for joining our Q&A session to discuss WorldWAT's Q4 and full year 2022 results. With me today is WorldBlock's co-founder and CEO, David Bezouki, and CFO, Mike Guthrie. Before we begin, I want to remind everyone that earlier this morning, we published a shareholder letter and earnings results on our investor relations website at ir.worldblocks.com. On this call, we will make some brief opening remarks and reserve the rest of the time for your questions. For our webcast participants, please Note the question icon at the bottom right of your screen where you can type in your questions. We'll do our best to take as many questions as possible in the time we have allotted today. On today's call, we may be making some forward-looking statements, including but not limited to our expectations of our business, future financial results and business, and financial strategies. Forward-looking statements are subject to risks and uncertainties that can cause actual results to differ materially from those described in our forward-looking statements. And such risks are described in our risk factors included in our SEC filings, including our annual report on Form 10-K and quarterly reports on Form 10-Q. You should not rely on our forward-looking statements as predictions of future events. We disclaim any obligation to update any forward-looking statements except as required by law. During this call, we will also discuss certain non-GAAP financial measures. Reconciliations between GAAP and non-GAAP metrics for our reported results can be found in our press release issued this morning, as well as in our supplemental slides, copies of which can be found on our investor relations website. Finally, this call is being webcast. The webcast will be archived on our IR website shortly afterwards. With that, I'll turn the call over to Dave.

Thank you very much. And welcome, team. Welcome, Mike. It's a pleasure to be here. Welcome to the Roblox community and welcome to all of our investors. We continue to focus on innovation and we're very pleased with our results from Q4 and the early signal on January. We have enormous headroom in our business. We have the whole company focused on one product, one platform. And in the midst of a fair amount of turmoil over the last year, we continue to hire and build an amazing team with amazing people. We're focused on our four growth vectors. One is bringing people together all around the world. One is expanding our platform to encompass people of all ages. Third growth vector is we continue to see expansion into education, into concerts, into communication. And finally, our economy is vibrant and growing as we'll share in our call. A couple details, Q4 bookings, 899 million, up 17% year over year, or 21% on constant currency. And highlighting this is around the world, including US, Canada, and APAC, each at 19% growth in Q4. Some slight acceleration in 2022 going into 2023 with December 20% year-on-year, January 21% year-on-year. And this is highlighting our global growth in January with Europe and APAC up 29% year-on-year. For older users, which is an enormous opportunity for the platform, sometimes referred to as aging up, This is not a new thing for us. We are in the middle of aging up and in January we saw our 17 through 24 year old segment grow at 39% year on year for bookings. Going into usage and DAUs, we're proud to report that in January we had our highest ever DAUs at 65 million DAU. And Q4 DAUs continue to show really strong growth. Europe, 24%. APAC, 21%. U.S. and Canada up 19% in Q4 DAUs. Amazingly, well, not really amazingly, because we're so focused on innovation, we burned almost no cash in 2022, roughly negative 0.5% cash, which we're really, really proud of. And on an adjusted basis in Q4, our EBITDA was 183 million or 20.3% of bookings. I want to highlight that underneath all of this progress, we focus very heavily on key drivers around signups, retention, frequency, engagement, and monetization. And all of these numbers continue to be near or at all time highs, even as we've emerged from COVID. Long term, we remain singularly focused on ushering in this new category of immersive communication. And we continue to see what we believe are the benefits of this new category as we start to roll out voice and facial animation. including the ability for people to be virtually in the same place as they communicate, the ability to pick up many cues around human interaction, including eye tracking, arm tracking, which we don't sometimes pick up on the phone or on a video call, The ability to simulate more and more of the audio that we see in the real world that helps our communication. And finally, of course, what everyone does on Roblox, in addition to communicating, doing things together. This vision, we think, has enormous headroom for us. If you've been with us on our investor day or some of our calls at RDC, We believe this is the next generation of communication following from audio, phone, video calls, texting, messaging. Behind the scenes on our innovation stack, there's a lot of metrics that are moving that to our average user are invisible, but are very, very important, go side by side with our innovation. We're constantly making improvements in the performance of all of our apps, in the speed at which people can connect to Roblox experiences, in the performance of our cloud around the world, and the performance all around the world as we roll out new edge data centers. And of course, the more visible parts of our innovation continue to be visible as well. We continue to roll out voice. We've had over a million experiences so far enabled voice chat. And as we continue to roll this out, we're very pleased with the adoption and the level of immersiveness that this has brought. We talk about dynamic heads and facial animation because we're in the middle of this rollout. But we believe very soon we will assume this is just a core part of Roblox and we will stop referring to dynamic ads. It'll just be part of an active avatar. This is the same with layered clothing with over 100 million, 115 million people adopting layered clothing so far. This will transition to just being called the clothing system on Roblox. And finally, we're well on our way, I believe we passed 90% of our catalog now being UGC. We're well on our way to that being 100%, including all of the avatars on the system as well. And finally, we're really pleased from a safety and civility standpoint to have rolled out experience guidelines in Q4, which is really just continuing our vision of building a platform for all ages around the world. Our active developers are up 33% year on year. We've had 70 experiences now pass a billion visits at the end of 2022. Brands continue to come to Roblox as this is a new form of bringing people together with brands. We're proud to welcome the NFL, FIFA, Netflix, and of course Elton John, Mariah Carey. We have a lot more coming in 2023. And something really near and dear to my heart, just given my prior company was an educational software company, we're really proud to see institutions like the Museum of Science in Boston start to roll out large, immersive educational efforts, such as their mission to Mars, Roblox Interactive Experience, Finally, safety and civility is a foundation for us, and we were really pleased to be the first tech company to support the landmark child safety legislation in California last year called the California age appropriate design code. And we're hopeful more states will adopt it. With that, we'll either turn it over to comments and let Mike have something to chime in on.