The U.S. online gaming platform Roblox Corporation will release its Q3 2025 financial report after the U.S. market closes on October 30. Market participants hold an optimistic view on the quarterly performance, focusing on improvements in bookings, user scale, and commercialization indicators, with an emphasis on the incremental contributions from advertising and international business.

Market Forecast

According to data from the Tiger Trade app, the company is expected to report Q3 revenue of $1.63 billion, a year-over-year growth of 44.53%. Adjusted EPS is expected to be -$0.496, down 45.9% YoY.

The current core focus for the company lies in the improvement of user scale and payment efficiency, with ARPU and retention improvements supporting revenue and gross margin trends. Platform advertisements and international market expansion are widely seen as the most anticipated existing business this quarter, with advertising revenue marked as a highlight by several institutions, and user and revenue growth in international markets contributing to the overall scale expansion.

Previous Quarter Review

In the second quarter, the company achieved YoY revenue growth, gross margin improvement, narrowed net loss, and improved adjusted EPS indicators YoY. Post-results, management provided a positive outlook for the next quarter and raised some full-year operating guidance. Operationally, both bookings and daily active users (DAU) hit historical highs, ARPU increases and cash flow improvements reflected enhanced commercialization capabilities. Core business highlights included the simultaneous rise of paying users and user activity, the incremental contribution of the advertising business, and accelerated international business expansion, which optimized the overall revenue structure.

This Quarter’s Outlook

User Engagement and Payment Efficiency:

The operating focus for the third quarter remains on the continued growth of bookings and DAU. Institutions commonly forecast that, driven by summer activities and ecosystem expansion, user engagement will remain high. If retention and ARPU continue the improvement trajectory from Q2, the high growth in bookings is likely to translate into more stable revenue growth.

In communications following Q2, the company emphasized the resilience of platform engagement and payment conversion, indicating that the operating leverage is still being released. Coupled with contributions from advertising and international business, there is more confidence in the continuation of structural improvement in gross margins. On the cost side, investments in infrastructure and developer ecosystem support may lead to temporarily elevated expense rates, but with the combined effects of scale coverage and efficiency improvements, net margin convergence is feasible. Once a stronger conversion loop is formed between advertising and high-quality content supply, the impact on free cash flow will be even more apparent.

Advertising Monetization and Product Pace:

Both institutions and media previewing Q3 highlight the advertising business as a core feature, primarily based on the accelerated pace of ad product launches and the expansion of the client base. With the parallel advancement of brand and performance advertising, single-quarter ad revenue is expected to rise significantly, positively affecting overall gross margins with higher unit margins.

In the short term, ad products are still in the iteration stage of launch and optimization. The extent of EPS improvement depends on the balance between ad load and user experience and the matching of ad scale with the platform’s user structure. Notably, there is an interactive relationship between the operational data of ads and retention metrics. Once ad quality and personalized recommendations better match user behavior, the release of operating leverage will be reflected in improvements in gross margins and cash flow, making contributions to the Q3 financials more direct.

International Market and Ecosystem Expansion:

Several institutions have identified user growth and revenue increases in the international market as an incremental source for Q3 in both their Q2 reviews and Q3 previews, significantly supporting bookings and revenue. International expansion enhances the user base and optimizes regional structure, helping mitigate seasonal volatility risks and providing broader monetization space for platform advertising and premium content. If growth in key regions progresses in tandem with localized content supply, payment systems, and compliance requirements, the YoY growth in Q3 will be more sustainable. In the short term, international expansion will be accompanied by higher infrastructure, review, and compliance costs, which need to be amortized through higher payment conversion and ad loading rates. As scale effects and product capabilities strengthen, the elasticity of improvements in gross margins and net margins will gradually become evident.

Developer Ecosystem and Cost Structure:

Market views are mixed regarding developer incentive payments and tool support. On one hand, the continuous rise in developer return payments and platform incentives boosts content supply, directly driving bookings and user engagement; on the other hand, rising expenses and infrastructure costs may temporarily increase operating expenditures in Q3. The key lies in whether improvements in content supply can significantly enhance user conversion and retention, offsetting expense increases through a higher revenue base.

If significant progress is achieved in high-quality content, cross-regional collaboration, and ad monetization synergy in Q3, structural improvements in gross margins and net margins will be more pronounced, making EPS improvements more certain. Should the supporting creator tools and data analytics capabilities apply more refined content operations at the product level, the connection between bookings growth and cash flow improvement will reinforce sustaining operating leverage.

Analyst Opinions

The proportion of bullish views has increased, with several institutions maintaining a positive stance post-Q2 results and ahead of the Q3 preview.

Goldman Sachs, in its latest rating report, reiterated its overweight rating on Roblox and raised its target price to $155, based on the core judgment that Q3 ad monetization and EBITDA will exceed previous guidance and market expectations.

Citi maintained its buy rating, increasing its full-year bookings and revenue forecasts, considering the sustainability of user growth and commercialization improvements.

Morgan Stanley maintained its overweight rating, highlighting advertising and international business as the most watched drivers for Q3, explicitly emphasizing the continuation of bookings and EPS improvements. Other sell-side previews mentioned that Q3 focus points include the continuity of high bookings growth, the pace and contribution of ad monetization, and the increment of international business. The release of operating leverage and the trend of cash flow improvement remain unchanged, with Q3 further likely to demonstrate structural recovery in gross and net margins.

Summary

With the structural support in the third quarter, if Roblox’s user engagement and payment efficiency continue the improvement trend from the second quarter, high bookings growth is expected to more effectively translate into revenue growth and gross margin improvements. Advertising, driven by productization pace and client base expansion, is broadly viewed as the most resilient incremental source this quarter. Once ad load and user experience achieve a better balance, the contributions to EPS and cash flow will be more direct.

International market expansion not only enlarges user and revenue scale but also provides support in regional structure and risk diversification; synchronized advancement with localized content, payment, and compliance will make operating leverage more sustainable.

Summarizing institutional views, the highlights of Q3 are the high-level operation of bookings and user engagement, the combined contributions from advertising and international business, and the positive feedback from the developer ecosystem. If these elements work in tandem, the recovery in profit structure and the stability of cash flow will become the main features of this quarter.