Roblox guided third-quarter bookings to $1.576 billion to $1.653 billion, a decline of 14% to 18% from a year ago, and withdrew its full-year outlook, accelerating a planned shift to quarterly-only guidance. Management attributed part of the decline to an April change in its discovery algorithm that now optimizes for long-term player retention by judging games on 28 days of player behavior instead of seven, intentionally providing more impressions for highly retentive games at the expense of near-term monetization. The impact was largest among younger players in the U.S. and Canada, where the falloff in spending per hour exceeded expectations. Second-quarter revenue rose 36% year over year to $1.47 billion, but bookings grew just 8%, at the low end of guidance, while daily active users climbed 10% to 123 million and hours engaged rose 5% to 29 billion. Shares fell about 27% on Friday, hitting a fresh 52-week low near $34, as the market treats the strategy as a cost until reported numbers show that longer retention eventually makes up for lower spending per hour.
Roblox CorpAlgorithm change prioritizing retention over monetization drives bookings guidance down 14-18% and full-year outlook withdrawal.