Shares of Roblox Corporation experienced a severe pre-market plunge of 22.55% on Friday. The sharp decline followed the company's release of its first-quarter financial results and a significantly reduced outlook for the full year.

The primary driver of the sell-off was Roblox's decision to slash its annual bookings forecast. The company now expects fiscal 2026 bookings in the range of $7.33 billion to $7.6 billion, a substantial reduction from its prior guidance of $8.28 billion to $8.55 billion. Furthermore, its second-quarter revenue guidance fell well below analyst estimates. Company executives attributed the weaker outlook to greater-than-expected headwinds from the rollout of new age-verification and safety features, which have led to reduced communication engagement on the platform, impacting content virality and user growth.

The company also accrued a $57 million expense in the quarter related to settlements with several states over youth-related consumer protection and digital safety matters. In response to the disappointing guidance, multiple analysts cut their price targets on the stock, reflecting a significant deterioration in institutional expectations for the company's near-term performance.