1/ Incredibly impressed with what @DavidBaszucki & the team at $RBLX presented at their investor day today. The pace of development on the platform is absolutely mind blowing. Some of the things they're working on:
2/ Better engine/tech/tools to help create content for older users @mbronstein
3/ An updated avatar system with full UGC capability, layered clothing, AI reactive movement, and dynamic heads
4/ Opt-in facial tracking combined with voice communication providing not just lip syncing but eyebrow movement, head nodding, and other non-verbal cues to facilitate real communication. @maheshramas
5/ In-game immersive advertisements for branded experiences with hyper-accurate attribution. @intheheights#blockparty
6/ Real world commerce: You bought your avatar Van's shoes using Robux, in the future you can use Robux to buy physical Van's shoes shipped to your door. $RBLX can be a primary channel for brands. @kavitakanetkar
7/ Expanded virtual ownership beyond just avatars, clothing and accessories (think furniture, pets, and vehicles that can travel with you across experiences) @3nricoD
8/ Educational experiences and partnership such as with @FilamentGames and @museumofscience to teach kids about a mission to mars
9/ More immersive music events, experiences, concerts, launch parties, and listening parties (@LilNasX#verch sales are almost $10m to date) @vlasso
10/ Infrastructure investments that allow bigger, faster, and more scalable experiences and events.
11/ The Roblox Open Cloud facilitating easy, scalable, and collaborative development of experiences. @SeraBLOX
12/ And market penetration still in the early stages, especially internationally @craigoodle
• • •
Missing some Tweet in this thread? You can try to
force a refresh
1/ $RBLX reported Q2 and stock getting hit AH -13% to $41. We saw bookings growth turn back positive in Jun +9% & Jul +10% but EBITDA margin of 8.5% is at a low (last 3 Q2s have been 26%, 34%, 13%). DAU growth and scale is impressive but market not seeing it in financials.
2/ Over 13yo demographic is now 53% of DAUs and growing 30%+. At this point $RBLX has successfully put to bed the argument they can't age up and grow the TAM.
3/ The big issue from the market's perspective is the previously mentioned EBITDA (and FCF) margins. The biggest headwind here is personnel expense which has grown explosively.
1/ Big question for travel stocks is whether strong summer demand can continue into fall or if it's one-time from pent up covid demand. There's a lot of noise but it appears it's more odd seasonality as opposed to consumer weakness. This chart shows YTD air bookings vs 2019.
2/ Historically summer demand peaks right around July 4th, you can see this in the web traffic stats for OTAs $ABNB, $EXPE, $BKNG. My sense is that this normal seasonality has been disrupted for a couple reasons.
3/ First is that real business travel hasn't really returned to pre-covid levels so the booking curves for airlines like $UAL & $DAL have been extended out further. The result is that GBV peak came in a lot earlier and the post-peak trough comped historically strong periods.
1/ $ABNB printed a beat for Q2. GBV +27% Y/Y, EBITDA of $711m (33.8% margin) and announces a $2bn repurchase authorization but the stock is down 9% AH on a "weak" Q3 guide.
2/ Q3 guide for revs of $2.78-2.88B but what really matters is GBV. Experiences booked guidance of "stable w/ Q2" aka ~25% and ADRs "slightly higher" Y/Y implies GBV approx +27% in Q3 vs street +34% so a miss vs expectations.
3/ Not a lot of room for a miss with an expensive stock. $ABNB is an A+ company but entered earnings at 25x 2023 EV/EBITDA and a 3.6% FCF Yield. Fair value depends on what you think 2023+ will look like for growth and what steady state margins are.
1/ $UBER with a strong report, finally seeing meaningful profitability (and importantly FCF). GBV +33%, EBITDA $364m (4.5% rev margin, 1.3% GBV margin) $382m of FCF, and reaffirm long term ability to hit $5B of EBITDA (with $4B+ of FCF) in 2024
2/ Driver supply has improved, wait times down, % of trips surged also down (and both trending towards pre-covid levels). Doing this while avg driver earning well >$30/hr in the US. This is a sustainably profitable business now.
3/ Delivery business in transition from hyper-growth -> profitability and digesting the "covid bump". $UBER US delivery +21% in Q2 (and active couriers +53% Y/Y playing catch up). Helps that they're seeing a rationalization of the competitive environment. (#RIP 15min delivery)
1/ Profitability, FCF, and Margins matter. $LYFT clearly living in 2021 where management thinks growth at the expense of profitability is important. $UBER will see sequentially growing margins, FCF, and profitability throughout 2022.
2/ Network effects matter. $UBER US/Canada Q1 drivers +79% Y/Y (and new drivers +121% in Apr) vs $LYFT +40% in Q1. @dkhos emphasized the earning power and flexibility drivers have with logging onto @Uber and choosing mobility vs delivery.
3/ $UBER driver onboarding focused on reducing friction and time from sign-up to driving (@dkhos emphasized high earning power of drivers and high retention once onboarded). $LYFT approach seems to be broader incentive based.
1/ The $AMZN Luna launch has the potential to be big, especially if they can drive user acquisition through Twitch integration. More likely Luna is a loser in cloud gaming like Stadia because content is king
2/ The winner that combines cloud gaming and content is xCloud/Game Pass. Luna and Stadia have no competitive advantage versus xCloud when content is the most important component to drive users.