Online gaming company Roblox (RBLX) - Get Roblox Report said after the bell Tuesday that Daily Active Users declined 1% in May from April and that bookings per DAU are estimated to be down 2% to 3% year-over-year.
The information sent shares lower in after-hours trading.
The company, which came public earlier this year, reported 43 million daily active users in May. That was down from 43.3 million in April, but up 28% from May a year ago.
Roblox and other gaming companies enjoyed unprecedented user surges during pandemic shutdowns, but with the U.S. economy reopening, demand for home entertainment options is expected by many to fall or at least plateau.
Adding to Roblox’s challenges, bookings per DAU are estimated to be between $5.02 and $5.09, down 2% to 3% year-over-year.
Roblox operates a popular online video game environment that has benefited from the surge in online activity during pandemic lockdowns. It derives much of its revenue from in-game purchases of a virtual currency that can be used to buy enhanced game experiences in its virtual worlds.
In May, Roblox reported its first financial results since coming public in March.
Analysts at JPMorgan initiated coverage of the company last month with an overweight rating and an $85 a share target price.
The JPMorgan analysts noted several additional lines of revenue that could open up for the company, notably advertising. Roblox users spend an average of more than two hours a day online and two-thirds of them are under the age of 17, the analysts said.
Several other analysts released positive notes on Roblox in early April, noting in particular that its platform blurs the distinctions between social networking and gaming.
Shares of Roblox fell $6.50, or 7.2%, to $83.30 in after-hours trading Tuesday. In the regular session the stock gained 2.3%.