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Roblox, the kids’ gaming company that’s getting set to go public, released an updated prospectus on Thursday with restated financials because of a “material weakness” in its reporting. Revenue for the first three quarters of 2020 was higher than previously reported, while its net loss was lower.
Revenue through September jumped 70% from a year earlier to $613.9 million, the company said. In its prior prospectus in mid-January, Roblox said revenue over that stretch climbed 68% to $588.7 million. Its revised net loss for the period was $194.5 million, down from $213.3 million as reported before.
“We have identified a material weakness in our internal control over financial reporting which resulted in our restatement of our financial statements for the years ended December 31, 2018 and December 31, 2019 and the nine months ended September 30, 2020,” the filing said.
The disclosure comes after Reuters reported in late January that the company postponed its stock market debut because the SEC was scrutinizing the company’s method of recognizing revenue through its digital currency. In the story, Reuters cited a memo sent to employees.
Roblox said that it now expects its direct listing to take place in March, rather than February as it indicated in a prior filing. Roblox had originally planned to go public through a traditional IPO in December, but it delayed its debut a first time and changed to a direct listing after Doordash and Airbnb priced their IPOs well below where the stocks opened.
Roblox, which has one of the top-grossing apps on Apple and Google devices, makes money by allowing its millions of users to buy virtual currency called Robux that can be used to dress up their avatar or advance in games.
The company said that the financial restatement was related to how and when it books Robux purchases as revenue instead of leaving it as deferred revenue.