Roblox Corporation

Hello everyone, thank you for joining us and welcome to the Roblox third quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Jaime Morris, head of investor relations. Jaime, please go ahead.

Good afternoon, everyone. Thank you for joining us to discuss our Q3 2026 earnings results. With me today is Roblox's co-founder and CEO, David Baszucki, and our Chief Financial Officer, Naveen Chopra. Before we begin, I would like to remind you that our commentary today may include forward-looking statements which are subject to risks, 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 Form 10-Q. You should not rely on our forward-looking statements as predictions of future events, and 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 shareholder letter and supplemental materials, which are available on our investor relations website. With that, I will turn the call over to Dave.

Thank you. Welcome to our Q3 2026 earnings call. There's a lot going on right now in the industry. I'm really excited about it. And especially with regard to ROBLOX, my comments may go slightly longer than normal today. So first I want to reiterate our long-term vision is to capture 10% of the global gaming market on Roblox with an even greater share in the US. And we do estimate that in our app approximately 20% of US under 18 market revenue is already on Roblox. I'm going to share today all of the things we have in motion to replicate that success with 18 and over starting in the USA. and our long-term mission remains to connect a billion daily active users with optimism and civility. There's a lot of technology, things are changing every day and we've seen just in the last few weeks or month really reverse engineering of all standalone code has become very commonplace. We've seen capability both open source and frontier models continue to accelerate and the time required to go from an idea to a playable game is compressing dramatically and we're seeing that on Roblox with Roblox Bill and we're seeing it in the top charts on Roblox. We're going to talk more about that today. There is a massive surge in creation velocity happening right now on Roblox and I'll share a few stats this month. Daily asset uploads to our Roblox cloud have tripled month to month. And we think assets with our images, textures, meshes are good proxy for the amount of creativity that's going on. Our game volume leveraging AI has grown 50% quarter by quarter. We're seeing some of these experiences now become AI driven hits. Since Q2, the time we estimate that's being spent with AI tools, and that includes build, studio, assistant, and external AI with MCP has tripled amongst our top creators. Daily active users of MCP has increased nearly 5x quarter by quarter. And MCP is the way people can connect their own external frontier models to Roblox. Over the last month, more than 80% of the top 100 games when we ranked by hours used AI to creation. And we've seen two titles created almost exclusively with AI hit the top 20 by concurrent players during Q3. That's Break of Steel and Egg and Hustle Valley. There's also an inflection point going on in our ad system as more devs are using ads to buy traffic. Now I want to share, we're running several initiatives to drive 18 and up adoption. We shared what we've done with DevEx and our engine and marketing. We have updates on these in our shareholder letter, but I do want to talk about two new initiatives. The first is Roblox Everywhere. We announced this at RDC. This is a framework to allow creators and Roblox to publish directly in app stores with two phases. In phase one, which we estimate will launch in the first half of 27, we're at Roblox going to directly curate and publish select top titles as standalone apps directly into major app stores. In phase two, our vision is to allow any creator to generate a standalone binary directly within their creator portal and submit it on their own to the app store of their choice. The way to think about this is imagine going to search for Grow a Garden in your favorite app store and finding both a standalone game called Grow a Garden as well as that game being available on the Roblox app at the same time. This leverages the view of build once, publish everywhere. Creators on Roblox already build once and publish across devices. They'll now publish within our app and ultimately into app stores. And Roblox Everywhere gives full access to a lot, if not all, of the Roblox platform capabilities, safety infrastructure, our social graph, economy, and communications. This is something devs have been asking for for quite a while. which is a highly attractive alternative to how they create and support their standalone games right now. Second, we're starting to share more and more our vision of what we call a universal player. You've seen a lot of chatter lately probably about people bringing games into Roblox. What the initiative of our Roblox player is really two pieces. We're developing an AI supported system which is going to allow creators to import literally any existing PC, console, or mobile game directly onto the platform. We're making a lot of investments in our platform on scale, 2D and 3D perp, our terrain system, and many other aspects to make our infrastructure and game engine a true universal player. And second, something really important to note is that once games are brought into Roblox, they're available for what I personally call Robloxification. And it's all of the things that have shown a lot of the success we've seen already on the platform. Any game that comes into our universal player can become multiplayer. Games that creators build on Roblox run both on high-end PC as well as low-end two gig Android at the same time. Games on Roblox join instantly with 3D streaming rather than with a download. We do local 3D to eliminate the feeling of latency with your avatar. Creators using Roblox right now can do instant updates and many of them update many times a day. and Roblox Games are supported once again by safety, social graph and the economic system all running on our back end. So with our current platform, plus everywhere, plus universal player, we're really expanding the framework for 18 and up growth. I'm going to discuss our Q3 results in the context of five strategic initiatives that support and power our long term growth. First is Roblox is a distribution platform powered by social growth. And in Q3, highlighting some tough compares last year with Q3, we achieved the highest seasonally adjusted overall platform retention since 2021 on the platform. We hit 138 million DAUs in Q3, up 12% quarter on quarter. We have nearly 34 billion hours of engagement in Q3 of 17% quarter on quarter. And I want to highlight over the last three years, both our DAUs and ours have nearly doubled relative to Q3 23. Looking more into some of the cohorts on the platform, our estimate is right now 30% of US 13 through 17 year olds are not just on Roblox, but they use it daily. and over 80% of them have age checked. In the U.S. right now for 18 and up, those DAUs are growing 18% year on year and 89% over two years. And 18 and up users monetize 50% or more than our under 18 cohort. Looking internationally, once again on tough year on year compares, France DAUs are up 12% year on year, Germany 13%. Japan DAUs are up 33%, India DAUs are up 37%, and we have a lot of runway. Outside of the US, less than 2% of the international population uses Roblox daily. On monetization, Roblox Plus has scaled to millions, and I want to note that Roblox Plus subscribers average twice the play time. and seven times higher on Roblox spend and more and more functionality is entering Roblox Plus all the time. Our sponsored tiles and rewarded video products are demonstrating really expanding product market fit with over 70% of the top 100 games running sponsored ads. and we expect to be testing skippable pre-roll video ads in select cohorts and countries with expanding first party inventory this year we continue to innovate and lead on safety and most recently for content we are completely live with our kids and select content system for younger users we're Our vision of a dynamic configurable safety architecture continues to be well received with regulators including Australia and Indonesia and beyond. Second, Roblox is a UGC platform with discovery continuously improving and we're, as I said, poised for a massive increase in content on the platform as AI accelerates content. In Q3, we've more and more incorporated age cohorts and play data into our recommendation algorithm. We believe our discovery systems are continuing to drive meaningful lifts in retention and engagement. And I want to highlight on content diversity, 40% of the weekly top 100 recommended for you games by impressions were created within the last three months. We're significantly accelerating the surfacing of great content into our top charts. Moments is now live in most of the US, and we're directly connecting the games found in Moments to active gameplay. A third strategic vector I want to highlight is just our proprietary data and models. We have over 20 years of data now on the platform and we get over 350 million hours of daily data. This is powering now over 400 internal proprietary models that we fine-tuned on top of open weights in some cases. An example that I just want to share which we're working on is in safety. Moving to the capture of 4D telemetry, that means location and time, all the way down to the instance and frame level. This is part of our vision to support more and more multimodal moderation, which evaluates entire 3D scenes. And I'd highlight, for example, we're now evaluating avatars in the combinations of clothing. They work automatically as part of our moderation system. Our discovery models are trained on billions of daily signals right now. and our economy models more and more are optimizing pricing and storefront placement. Fourth, we shared today the continuing goal of creating what we call a universal player infrastructure. And I want to leverage how this highlights the difference right now between traditional gaming in many cases, which is the production of a large binary blob with the whole game, and a Roblox architectural simulation, which includes an app, an engine, cloud infrastructure, and core services. And we really want our universal player to be a universal way for any game to be created and distributed. We have a lot of advancements that ship this quarter on our universal player, including procedural terrain, are slim runtime, which is a way of optimizing LOD and how we share systems. Our dynamic LOD mesh system, our texture streaming system, and server authority with client prediction for fair low latency play. We have three really interesting things coming in our universal player. The first is Roblox Reality. We've shared that at RDC. You can go see it online. which couples generative video world models to move towards really the dream of multiplayer photo realism. We have early access scheduled for Roblox Reality in the first half of 2027. On our expansion to 2D play and offline play, I do want to highlight we are moving towards supporting disconnected solo play, which is what a lot of people who use puzzle games and other people have asked for. and finally within all of the targets in our platform including mobile, PC, desktop, consoles and beyond we are also now targeting WebAssembly with the exact same Roblox engine and we expect this to enable instant one-click browser play initially in Google Chrome so stay tuned for that Roblox without a download. And then finally, I just want to highlight that this fifth strategic pillar involves our use of all of our data and systems to create what we see as the ultimate AI harness for game creation. Right now, games and experiences on Roblox are built either directly human in studio with the Roblox Studio Assistant, with Roblox Build, or connecting Roblox Studio to MCP and external AI. We're making big progress on this harness, both within Roblox Build and Studio Assistant. Our harness right now is routing prompts across multiple models, both for code, for 3D scene gen, for audio. Avatar models are coming online and more. In our testing so far in New Zealand, Singapore, Serbia, and Thailand, we've tested with over 500,000 users. We've seen over 70,000 games published with Roblox Build. We already see multiple titles running ads and making money. And the vast majority of Build users have never previously opened Roblox Studio. We're going to be doing a broader US release of Build in December, and a global rollout in 2027. So summarizing, we're really excited about how AI is unlocking our platform. We're already seeing early benefits. We believe we're really well positioned to capitalize on this moment. And with that, I'll pass it to Naveen.