Roblox Corp., the kid-focused gaming company that’s planning to go public this month, warned investors that the booming user growth it enjoyed during the pandemic is about to disappear.
The total hours that users spend engaged with the gaming platform could drop by as much as 11% in the second quarter, Roblox said in a statement. Though the number of daily active users is expected to grow 3% to 9%, that’s a fraction of the growth it’s been experiencing during Covid-19 lockdowns, which have kept many kids home from school.
The outlook threatens to temper excitement for Roblox’s direct listing, which is slated for around March 10. The company has been a phenomenon during the pandemic, with kids — particularly tweens — using the platform to hold virtual birthday parties, graduations and other events.
The company’s daily active users grew 85% in 2020. The amount of time those users spent engaged on the platform more than doubled.
“We headed into 2020 with strong organic growth which was further bolstered by social distancing restrictions,” Chief Financial Officer Michael Guthrie said in the statement. “As those restrictions ease, we expect the rates of growth in 2021 will be well below the rates in 2020, however, we believe we will see absolute growth in most of our core metrics for the full year.”
For all of 2021, daily active users are expected to climb as much as 12% to 36.4 million. Hours engaged will range between a drop of 3% and a gain of 3%. The company also expects one-time expenses of $51 million tied to its direct listing.