roblox Shares plunged 18% on Friday after the company reported first-quarter earnings as new child safety measures weighed on bookings.
CEO David Baszucki said Friday on CNBC’s “Squawk Box” that “part of what we’re rolling out with age checks is we believe it’s the real, right long-term way to build this platform.”
In a letter to shareholders, the company wrote that the new age-check feature caused more headwinds than expected because it “restricted communication on the platform for users who were not age-checked, diluted communication for users who were age-checked, and slowed new user acquisition.”
In January, the company restricted chat functionality to users who completed age verification. As of January 31, 73% of Roblox’s age-verified daily active users were under the age of 18, and 35% were under the age of 13, according to the company.
Roblox lowered its full-year 2026 outlook to account for slower growth.
The company updated its full-year 2026 bookings to be in the range of $7.33 billion to $7.6 billion. The company expected 2026 bookings to be between $8.28 billion and $8.55 billion, up nearly $1 billion from the previous quarter.
In a letter to shareholders, the company said, “While our aggressive drive toward enhanced safety reduces our expectations for revenue growth in 2026, it fundamentally improves our platform and amplifies Roblox’s long-term growth potential through more effective content targeting, customized communication experiences, and improved community sentiment.”
Roblox’s first-quarter results beat Wall Street expectations, with a loss of 35 cents per share beating the expected loss of 41 cents per share. The company reported revenue of $1.73 billion for the quarter, narrowly beating analysts’ estimates of $1.72 billion.
Roblox is facing more than 140 lawsuits in U.S. federal court for failing to protect children from sexual exploitation, according to Reuters. Last month, the company reached a settlement with the states of Alabama and West Virginia, agreeing to pay a combined $23.2 million.
Last month, the company announced new account types for younger age groups and expanded parental controls.
Roblox 5-day stock price chart.
