Roblox revised down its full-year bookings outlook on Thursday, warning that recent safety-focused product changes are already affecting user interaction and monetization on the videogame platform. The company now forecasts fiscal 2026 bookings between $7.33 billion and $7.6 billion, narrower and lower than its previous projection range of $8.28 billion to $8.55 billion.
Roblox has invested heavily in recommendation algorithms and increased rewards for developers, moves that helped the platform attract millions of users drawn to free-to-play experiences and social features. However, the company has faced a string of serious safety incidents, including cases of child exploitation and grooming, which have prompted national bans, lawsuits and regulatory inquiries into its safety systems.
In response, Roblox introduced age-based accounts and age verification measures earlier this year, with the aim of limiting communication and interaction between younger players and older users. The platform has also expanded its content monitoring efforts. Company executives said the changes are intended to reduce risks to young users, but they acknowledge the changes have immediate effects on user behavior and engagement metrics.
"What we have observed since we started rolling out age-gating of communications features in January is less communication engagement on the platform," CFO Naveen Chopra said. "That does tend to have some knock-on effects in terms of content virality, which can then impact things like App Store ratings and the like."
Roblox reported average daily active users (DAU) of 132 million in the first quarter, a 35% increase from the same period a year earlier. Despite that year-over-year growth, the company now anticipates a sequential decline in DAU in the second quarter. It projects second-quarter bookings of $1.55 billion to $1.61 billion, a range that falls short of consensus estimates of $1.83 billion compiled by LSEG.
The stock reacted sharply to the guidance revision, trading down more than 18% in extended hours following the announcement.
Alongside the guidance update, Roblox unveiled an internal project codenamed "Roblox Reality," which the company says will enable developers to create photorealistic games by combining videogame engines with AI-driven world models. The company noted that the use of AI in game development has accelerated across the industry as publishers explore ways to reduce costs and accelerate creation timelines.
Roblox's leadership framed the product and policy shifts as necessary steps to address safety concerns while continuing to support developers and creative production. The company faces the operational challenge of balancing stricter safety controls with the engagement dynamics that have historically driven content virality and monetization on its platform.