Roblox CEO issues stark forecast on 2026 bookings

Roblox had a strong first quarter on paper. But what CEO David Baszucki said about the rest of the year sent investors running for the exit. The gaming platform posted first-quarter bookings of $1.7 billion, up 43% year over year. Revenue came in at $1.4 billion, also up 39% year over year. By most measures, that's a healthy quarter. But the guidance told a different story. And now investors are asking what went wrong and how long it will last. Roblox's big safety bet is costing it users The trouble started in January, when Roblox (RBLX) became the first major online gaming platform to require age verification just to access its chat feature. The move was bold, but the fallout was bigger than expected. According to the company's shareholder letter, the age-check requirement "restricted on-platform communication for non-age checked users, diluted communication for age-checked users, and slowed new user acquisition." That's a triple hit to the top of the funnel. As of the end of Q1, only 51% of global daily active users (DAUs) had completed the age check. In the U.S., that number was 65%. Here's the problem. Users who haven't age-checked can no longer chat. And users who have age-checked have fewer people to talk to because their friends may not have completed the process yet. That reduced communication activity dampened word-of-mouth and dragged down app store ratings, which Roblox says cut into organic sign-ups. "Part of what we're rolling out with age check, we believe, is the real, right long-term way to build this platform," Baszucki said on CNBC's "Squawk Box." Roblox's nearly $1 billion guidance cut The numbers are hard to ignore. * Roblox now expects full-year 2026 bookings to land between $7.33 billion and $7.6 billion, according to CNBC. * Just last quarter, it had projected bookings of $8.28 billion to $8.55 billion. That's nearly $1 billion wiped from the forecast in a single quarter, CNBC confirmed. * Full-year revenue guidance was also trimmed to 20%-25% growth, down from an earlier, more optimistic projection. Roblox shares fell 18% following the earnings report, CNBC noted, a sharp reaction that signals how much the market had priced in stronger growth. Chief Financial Officer Naveen Chopra said the revised outlook reflects what the company is now calling "second order impacts" of the safety rollout. These include reduced viral sharing, weaker app store sentiment, and slower new user acquisition. DAUs came in at 132 million in Q1, up 35% year over year. But that growth rate has already slowed meaningfully from the roughly 70% clip seen in the prior two quarters. Roblox expands its portfolio Roblox isn't sitting still. The company is rolling out several features designed to revive communication and user growth. Global chat is already in testing and allows players across different servers in the same game to talk in a single shared room, boosting the sense of activity, even when fewer users have age-checked. Trending Tech Stocks: Preset messages are also coming soon, letting players coordinate gameplay without needing full chat access. Chopra said Roblox expects DAUs to contract further between Q1 and Q2, then return to sequential growth in Q3. That confidence rests on three things: seasonal tailwinds, planned product updates, and the upcoming launch of age-based accounts in June. On the monetization side, Roblox is sweetening the deal for developers building content for adult users. Starting June 8, creators making games for age-verified users 18 and older in the U.S. will earn 37.8% of in-game revenue, up from 26.6%. The company is also working with established game studios to bring popular mobile titles onto the Roblox platform. Baszucki framed all of this as part of a deliberate, long-term strategy. The platform has more than 400 artificial intelligence models running more than 1.5 million inferences per second, powering everything from safety filters to content discovery. It is also rolling out a photorealistic gaming initiative called Roblox Reality, aimed at attracting older, higher-spending users. The platform's 18-to-34 age group already grew more than 50% year over year in the U.S. in Q1 -- faster than any other cohort. And adult users monetize at roughly 1.5 times the rate of users under 18. Is RBLX stock undervalued? Down 66% from all-time highs, Roblox stock is valued at a market cap of $34 billion. Analysts forecast RBLX stock to expand its free cash flow from $1.35 billion in 2025 to $3.80 billion in 2030. If Roblox is priced at 25x forward FCF, which is below its current multiple of 33x, it could surge by over 150% over the next four years. Out of the 25 analysts covering Roblox stock, 14 recommend "buy," and 11 recommend "hold." The average RBLX stock price target is $90.40, indicating 90% upside from current levels. The long-term thesis for Roblox remains intact. Getting there, though, will cost Roblox a painful year of transition.