Roblox’s revenue soared again in the third quarter, but so did its costs.
The video game company earned nearly $1.4 billion in the quarter, up 48 percent from last year. Despite this, Roblox remains deep in the red — reporting a net loss of $257 million, slightly wider than a year ago. And reports that the company would lose even more money in 2026 prompted investors to send Roblox shares down more than 15 percent on Thursday.
Though the platform has seen a 91 percent surge in engagement hours and record-breaking daily active users, now in the hundreds of millions, up 70 percent year over year, Roblox has yet to translate that growth into profitability.
In its latest earnings call, management openly warned investors that losses will continue to grow in the near future due to increasing expenses tied to safety initiatives, developer payouts, legal battles, and cloud infrastructure putting a damper on the hype the video game company has received in 2025.
“You’re going to see some slight margin compression as we catch up over the next few quarters,” said Naveen Chopra, chief financial officer, on Thursday’s call. “But I think those investments really should give everyone even more confidence in our ability to continue to deliver sustainable long-term growth.”
The company’s expenses have ballooned quickly: payouts to game developers have climbed 85 percent to $428 million this quarter alone — pushing total payments past $1 billion for 2025, months ahead of schedule.
Chopra acknowledged that “bookings have grown faster than our ability to deploy the appropriate growth investments,” which he says the company will solve through continuing to spend.
While the company cites its increasing daily active users as a positive — it had an average of 151 million gamers on a site a day in Q3 — analysts note that the increase in the significant increase in engagement, means the company needs to continue to invest in infrastructure.
“The combination of this scaling engagement, along with concerns about child safety, could put pressure on this operating expense line item as Roblox seeks to invest in tools and technology to ensure child safety while scaling its infrastructure to support an increasing number of users,” writes Brian Pitz at BMO Capital Markets.
Safety and infrastructure spending rose 61 percent year-over-year to $208 million, and the word “safety” appeared roughly four times more often on Thursday’s call than last quarter — a sign of how central the issue has become as litigation mounts.
The company is facing lawsuits from several state attorneys general, including Louisiana’s Liz Murrill, who alleged in an August filing that Roblox “lacks safety features to protect children from predators,” calling the platform the “perfect place for pedophiles.”
On Thursday’s call, executives said the company would begin working with attorneys general nationwide to form a new child safety coalition.
But in their quarterly filing, Roblox disclosed that they are quietly rapidly increasing legal spending. Administrative costs are up almost 50 percent from a year ago, with most of those expenses being “associated with ongoing litigation.” Year to date thus far, legal and compliance spending is up more than $30 million from 2024.
Despite those headwinds, Wall Street isn’t turning its back on the company. Most analysts still rate the stock a buy, citing Roblox’s ability to sustain rapid user and revenue growth even as losses mount. But Thursday’s selloff — down to $113 a share, the lowest in more than 90 days, suggests cracks in that confidence.
On the call, Roblox CEO David Bazzucchi reiterated his goal for the company to capture 10 percent of the global gaming market, though without setting a timeline. “There’s a lot of room to go,” Bazzucchi told Bloomberg Tech on Thursday. As of Q3, Roblox currently commands only about 3.2 percent of the global gaming market.