Roblox Corporation

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 during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Stephanie Notani, Senior Director, Financial Communications. You may now begin your conference.

Thank you, Dennis. Good morning, everyone. Thank you for joining our Q&A session to discuss Roblox's fourth quarter and full year 2023 results. With me today is Roblox co-founder and CEO David Bazzucchi and CFO Mike Guthrie. As a reminder, our shareholder letter, press release, SEC filings, supplemental slides, and a replay of today's call can be found on our investor relations website at ir.roblox.com. On this call, we will make some brief opening remarks and reserve the rest of the time for your questions. Our commentary today may include forward-looking statements, including but not limited to expectations of our business, future financial results, and strategy. Forward-looking statements are subject to risk, uncertainties, and assumptions that could cause actual results to differ materially from those described in our forward-looking statements. A description of these risks, uncertainties, and assumptions are included in our SEC filings, including our most recent reports on Form 10-K and 10-Q. You should not rely on our forward-looking statements as predictions of future events. We disclaim any obligation to update these 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 can be found in our press release and supplemental slides. With that, I'll turn the call over to Dave.

Thank you. Hey, welcome everyone to our Q4 and full year 2023 earning call. It's great seeing or hearing or talking with all of you and it was great seeing you all at Investor Day. We had a strong fourth quarter and a strong full year 2023 consistent with the outlook we made at Investor Day. Some highlights in Q4, our DAU 71.5 million up 22%. Hours engaged $15.5 billion, up 21% year-on-year. Revenue $749 million, up 30% year-on-year. And bookings $1.1 billion, up 25% year-on-year. It was our first quarter over a billion in bookings and also our highest quarterly growth rate in two years. For the full year and fiscal year 2023, DAUs up 22%, hours up 22%, revenue up 26%, and bookings of 3.5 billion up 23% year on year. We continue to invest in innovation and simultaneously invest very thoughtfully in the growth rate of those investments. And at our investor day, we discuss thoughtfully balancing the growth rate with our investments, both in cost of revenue, infrastructure, expense, people, and capital expenses. And we're pleased to share that in Q4, we delivered net cash flow from operations of 143 million, up 20% year on year, strong net liquidity of 2.2 billion, and our covenant adjusted EBITDA was 259 million. Mike will talk more about the balance of our investments and the management of our margin targets. I want to highlight going all the way back to our S-1, our four-dimensional growth strategy, including all ages, international, roadblocks everywhere, and a vibrant economy. And in all four of these dimensions, we made great progress. On all ages, our 13 and over DAUs grew 28% in the last quarter, and over 58% of our DAUs are now 13 and up. And these older DAUs are interesting and exciting for the advertising business that we're building. Our growth continues to be the result of innovation and investment in the platform, as well as our amazing creator community. On the international side, DAUs in the U.S. and Canada grew 17%. DAUs outside of the U.S. and Canada grew 23%. A couple highlights in Q4, Japan DAUs 45%, India Q4 DAUs up 59% year on year. This growth we believe is supported by our international expansion playbook including a foundation of safety and civility, automatic AI powered language translation so all of the content our creators create can run Around the world, our infrastructure, including edge data centers around the world to supply performance and reliability, great content developers popping up all around the world and continued innovation here on Monday. We announced that our own AI model is powering real time AI chat translation. allowing people around the world to communicate with people who are chatting in a different language. On Roblox Everywhere in Q4, we released Roblox on PlayStation and on MetaQuest. Both of them attracted new users and continued on our vision that we want Roblox Everywhere. In our vibrant economy expansion in Q4, we delivered developer subscriptions. We're moving consistent with the vision of everything is creator-driven, our avatar platform to full UGC. And quick update on our advertising initiative. We had the most brand engagements ever in Q4, 69 great brands working with the platform, and we're scaling up over 2024. A couple highlights on innovation that we're building on top of all of this. On our social side, we're connecting more friends all the time. We released real names for 17 and up players. We released video capture, or sorry, image capture now, hint of where we might go there someday. On the immersive communication side, we saw great growth in our voice DAUs. Voice DAUs are up 161%. year over year, which is just highlighting our vision of Roblox connecting and really acting as a connection and communication platform. On the avatar front, we continue to make progress in immersive connective avatars. In addition to layered clothing, we released this year and we're seeing more penetration on facial animation everywhere. We are seeing more penetration on voice chat. And a hint of what's to come at our Roblox Developer Conference, we hinted around the use of our own AI to generatively create avatar. The AI opportunity at Roblox is manifest and everywhere. We've been working on this behind the scenes for many, many years. On the more visible generative side, We have announced Roblox Assistant, which is now in beta where creators can use natural language text prompts to generate new ideas in addition to code assist and material assist. Behind the scenes, we continue to roll out more and more AI on real-time image, voice, and chat moderation, which in addition to constantly improving quality, is also making our whole safety platform much more efficient. Looking forward, we will continue on our path of innovation and execution consistent with what we shared with you at Investor Day in 2024. We are driving growth and engagement in DAUs. We are relentlessly focusing on the leverage we gain from raw performance, quality, and cost to serve efficiency. We are focused on accelerating monetization through advertising and our virtual economy. We are using AI both in, once again, the user-facing generative way to accelerate creation and expression, but also behind the scenes for cost and quality. And underlying this always since day one is our focus on safety and civility from the start of our platform. to really this day forward. And we continue to be optimistic about our mission to connect a billion people every day with optimism and civility, not just in gaming, but in entertainment, ultimately in shopping, ultimately in social communication, and ultimately in learning and education where we're making amazing progress as well. With that, I'm going to pass it over to Mike Guthrie, our CFO.