- A/R: 73% of every revenue dollar went uncollected during the year.
- A/P: RBLX vendors financed 1.30% of every revenue dollar
- Deferred Revenue: 46% of every rev dollar RBLX collected upfront from its customers without recognizing it as revenue.
8/ Cash Impact of WC From 2019 - 2020
Like GM & SG&A, we can see the cash impact of revenue growth on $RBLX WC requirements.
Interesting notes:
- A/R drained $110M more cash than the previous period
- RBLX had vendors finance ~$10M in revenue for the period (positive A/P).
9/ Cash Impact of Growth on GM, SG&A, and WC (2019-2020)
The changes in growth, margins, and operating efficiencies resulted in $83.03M of cash INFLOWS from its $415M in top-line growth.
Yet another example of how RBLX creates value from revenue growth.
Bring on COGP/FCFGP!
10/ Getting $RBLX COGP Figs
COGP/FCFGP are fwd-looking figures.
They report the $ of core operating cash flow/FCF that we can expect for any measured amount of growth in revs under the assumption that a firm’s operating cushion and operating working capital remain unchanged.
11/ What Our COGP Percentages Mean
Since COGP is forward-looking, we can assume that for every $1 in incremental revenue RBLX generates during 2021, ~80% of that should flow through to core operating cash flow.
That’s an astounding figure.
12/ Calculating $RBLX FCFGP Figs
From here, we get FCFGP by subtracting CAPEX and taxes as a percentage of revenue.
The company’s FCFGP increased 16% since 2018 thanks to an 8% increase in COGP and an 8% decrease in CAPEX spend.
13/ Industry Comparables Analysis
We compared $RBLX COGP/FCFGP figures with three companies:
The last decade hasn't been the same as Graham points out in his book.
It hasn't been better to "buy a group of large companies that are relatively unpopular."
In fact, it's been better to buy "glamorous and dangers fields of anticipated growth"
2/ Using Microsoft as An Example
When you stop and think about $MSFT, it'll blow your mind. Anderson notes:
"In its last year as a private company, $MSFT made $24 million net profit. In 2018 it earned $30.27 billion. That’s at a 24& CAGR over 33 years w/ 30% EBIT margins."