Roblox Corporation

Thank you. I would now like to turn the call over to Stephanie Notani. You may now begin your conference.

Thank you, John. Good morning, everyone. Thank you for joining our Q&A session to discuss Roblox's Q4 and full year 2024 results. With me today is Roblox co-founder and CEO David Buzuki and CFO Mike Guthrie. Our shareholder letter, press release, SEC filings, supplemental slides, and a replay of today's call can be found on our investor relations website. Our commentary today may include forward-looking statements, which 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 risk, uncertainties, and assumptions are included in our SEC filings, including our most recent reports on Form 10-K and Form 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. Good morning. Hey, thank you all for joining us today. We're excited to share our outstanding results from Q4. And once again, I want to highlight our surpassing all of our guidance metrics, everything we provided in our Q3 earnings call and our 2023 investor day goals. And we're going to lead you through a bit of our continued journey on moving to a goal of having 10% of the gaming content ecosystem running through our platform. But let's start a bit with some of our results. Once again, high growth rates across really all of our key financial and operating metrics and surpassing our guidance in every single data point where we provided guidance in our Q3 earnings call. Q4 revenue, $988 million, up 32% year-on-year, ahead of our high end of guidance of $960 million. Q4 bookings, 1.362 billion, up 21% year-on-year ahead of the top end of our guidance, which was at 1.361 million. DAUs in Q4, 85.3 million, up 19% year-on-year. Want to highlight, once again, in Japan and India, two very large markets for us, growth over 50% year-on-year. Also highlighting, as we continue to expand the range of ages on our platform, over 61% of our total DAUs are over 13, and over 13 saw 26% year-on-year growth. Hours, 18.7 billion hours of engagement in Q4, up 21% year-on-year. Similar plus 50% in India and Japan. Once again, strong growth over 13. On the cost and cap expenditure side, we've continued to be very diligent, except in one area, DevEx was up 25%. We shared over $922 million with the developer community in 2024. And in Q4, we shared $280 million through DevEx, which is up 27% year on year. That's an all time high, and it's really part of our commitment of moving as much money through our platform to creators on trust and safety and infrastructure. This is our whole cloud. This is all of the AI supporting safety and civility. This is all of our live ops. This was up 2% year on year and down 2% versus Q3. I want to highlight this is all because of efficiency. We're improving quality on all metrics. This is as we improve the way we drive quality and efficiency with AI and the way we run lean infrastructure. That was 13% of revenue and 9% of bookings, which decreased to the last year. And I just want to highlight a lot of AI-driven modernization with quality that will share a bit more. On personnel costs, not including stock-based compensation, $200 million. Once again, driving on operational excellence, we were at 20% of revenue and 15% of bookings. This decreased relative to the previous year, both as a percentage of revenue and bookings. On operations, Q4 cash was up 29% year-on-year to $184 million. Free cash flow Q4 120 million, up 54%. Once again, all of our metrics above guidance, free cash flow above the high end of the guide at 115 million. For the year, free cash flow up over 5x from 124 in 2023 to 641 million in 2024. Let's pop into our roadmap. In 2024, really at the start of the year, in our first earnings call, we shared a commitment to perf quality, live ops, discovery, and economy. All of these initiatives, we believe, contributed to our continued growth. And I want to highlight once again, up and down our stack throughout the year, app launch time, crash rates, frame rates, overall app quality. All, we believe, contribute to higher engagement and spending. And a little highlight on infrastructure quality. In December, our uptime hit five nines, 99.999% uptime, which is really a new high point for us. And once again, signifies commitment to engineering excellence. On the LiveOps side, in 2024, we introduced platform LiveOps. We saw a large content slate from the creators supporting LiveOps. We've seen a lot of great content breakout this year. Phish emerged as a breakout hit. We've seen NFL Universe pop into the top 25 as far as bookings on the platform. We've seen SpongeBob from Paramount pop into the top 25. More to come on that as we talk about content. And finally, on the discovery side, we shared with all of you a commitment to transparent discovery that optimizes personalized results for everyone. I want to highlight that inexperienced hours for experiences beyond the top 1,000 grew faster than our top thousand this year. And that's a highlight to discovery matching people with great content. On economy, we at the start of the year shared a commitment to driving bookings per hour with a lot of improvements to our economy. We launched dynamic price floors. We moved our UGC economy to UGC for all, which means we opened up our avatar marketplace to all creators. We launched inexperienced price optimization as well. This has driven monetization everywhere. Bookings per DAU, bookings per hour, and bookings per payer all increased in 24 relative to 2023. And recently in Q4, we began to offer more Robux for users buying on platforms other than mobile, essentially giving Robux out roughly proportional to the cash we get in during the purchase. And this has improved the share of economics as well that we share with the developer community. On ads and brands, we've seen Elf Beauty on the platform. Amazon is now buying ads on our platform. Mr. Beast, in conjunction with Beast Games going live on TV and on streaming, brought a Mr. Beast experience. We've hired a lot of key leadership in our ads engineering and product orgs. We're now live with Shopify integration. And a cool cultural moment, five of the 10 top grossing 2024 movies had activations on Roblox, including recently Beetlejuice and Wicked. In safety, constantly shipping improvements. We had over 40. the releases this year, and we launched our party product as well, which brings people together on the platform and made improvements in how we treat people of all ages as part of that. On the AI side, I just got the recent update on the number of AI pipelines and systems we're running on the platform. It's over 200 now. We've been doing this for over four years behind the scenes on our safety and civility side. And an example of the innovations we're making is our voice safety model has been, we open sourced it on Hugging Face because we want other people to take advantage of our expertise in voice safety. It's been downloaded over 20,000 times. We launched Avatar Auto Setup in Q4, which takes any really industry 3D avatar model and turns it into a fully functional Roblox avatar. Skinning, boning, adding facts to the face, making it support facial animation. This is a real early signal in the ability of Roblox to use AI to ingest text, images, 3D objects, and convert them really into functioning Roblox objects. And also, Roblox Assistant is fully launched in Q4. It allows conversational creation inside Roblox Studio. Stay tuned because a lot more of that's coming. At RDC, we shared a vision that we believe we're going to see 10% of all gaming content running on the Roblox platform. Today, our market share is 2.4%. which speaks a bit to the available headroom we have as we drive our platform. We see a fundamental shift incurring in the gaming ecosystem driven by our vision of technology. And that's a vision of 3D streaming supporting instant connection with 3D content. It's instant connection on any device anywhere in the world. It's enabling developers to publish once to a cloud and, once again, have their content live, any language, any platform, and ultimately powered by AI. And finally, this is not video streaming. This is 3D streaming with very low latency, local simulation of avatar, and very responsive 3D interactions. So this is really add a lot of clarity to, um, just for, for all of you and for how we're working with our creators. So stay tuned on this. I want to share a bit of what we got planned for 2025 and beyond as part of this goal, really of getting 10% of gaming on our platform. We're really watching the genres on Roblox. Some of our genres, uh, like avatar simulation. are arguably already pretty huge relative to that gaming ecosystem but there's a lot of opportunity for us in role playing in sports and racing in action and battle royale we're really going to be driving platform tech including perf and quality we are we've announced an uh affiliate program to support on and off platform acquisition and supplement the organic growth on our platform We're continuing to expand our economy, and we've shared more about this with paid access games and our ad economy. And then finally, I want to just give a little highlight of the future of AI on our platform. Just like in the early days of Roblox, when this immersive 3D online multiplayer simulation that we created started to support new genres of gaming that have been popping up on Roblox, We believe AI will continue to do that. Our expectation is in Q1, we're going to be shipping text generation available inside Roblox experiences. That means creators will be able to take advantage of this and make AI-based characters. So we can imagine a virtual George Washington teaching Roblox in history driven by text gen as a service. We have also shared that we have so much 3D data we're going to be making available a 3D foundational model that is 3D native and state of the art transformer based that has been trained with our data. We're going to make this available in studio and in Q2 we expect to extend 3D creation and 3D generation in experience. That means a fashion creation game will start to allow everyone not just to mix and match an outfit, but to generate 3D outfits with a text prompt. So stay tuned for that. Finally, on safety, the foundation of our company, we have huge ambitions for the year. And I want to highlight safety and civility at Roblox isn't just under 13. When we think of safety and civility, we're talking every single age on the platform and building that in. So stay tuned on that. We continue to produce more and more operating leverage, even as we bring in world-class talent. We're expanding and improving infrastructure, trust and safety systems, and we're driving the economics. I'm going to hand over to Mike, but I do want to highlight, we continue to drive top-line growth at 20% plus. While we increase cash flow, And while we're on to really this goal of 10% of gaming, which is almost a 4X for us as available headroom, with that, over to Mike.