Q&A（Question-and-Answer Session）is a session after the company's prepared remarks where institutional investors and analysts ask management questions. In this dialogue, you may find some valuable information that might affect the stock price in the following weeks.
Now let's look at some key points from Roblox Q4 2022 Q&A Session Transcript $Roblox Corporation(RBLX)$
Q:The first one is on the January trends for bookings, a 3-point acceleration ex-FX. So I was just curious in terms of how to parse that out. You guys also mentioned the Lunar New Year coming in January this year. Is that typically an uplift to bookings or a drag? So any color in terms of what that trend looked like before diluting the year would be helpful.
A:Well, December bookings is probably a good guide before the Lunar New Year because it was before Lunar New Year and the growth rate was pretty high. So that’s probably a good way to look at it. What was – and so what was the other question about?
Yes. So January, Yes, January accelerated a little bit over December because the business is accelerating. There’s more content. There’s better content. We’re seeing growth. It really is basic stuff. We’re seeing growth around the world, as Dave talked about, specifically incredibly strong growth in strategic regions. So I think Western Europe and East Asia, we talked about that area being a secular tailwind of the company, I think, in the last earnings call, and that continues to be the case.
As an example, just in the month of January, within the strategic region alone, bookings grew by about 37%. So – and that’s now becoming a pretty big part of the bookings. Opportunistic regions, Latin America, Southeast Asia, et cetera, grew at 23% in January. So again, huge part of the world, lots of population and also healthy growth. The other thing that’s continued to allow us to drive bookings growth overall is the fact that in our core markets, U.S., Canada, UK, Scandinavia, ANZ. Those are the parts of the world where we had highest rates of penetration, biggest businesses going into COVID, obviously, they popped up very high during COVID because we were so well established there
But we are now through that and now growing above the peaks that we had in terms of the user base in COVID. And in particular, our younger users continue to grow, even though that’s the most highly penetrated part of the market. But really, it’s those aged up users that Dave referenced, 13 to 16, in particular, 17 to 24-year olds. And now we’re seeing really interesting growth and substantial scale in the 25 and over user base. So really, its strength around the world and strength in all age demos, but in particular aged up.
Q:Everybody is talking about ChatGPT; it's being asked of all the big companies. So I wanted to ask, how does the availability of this new technology maybe accelerate or not your time line towards inexperienced creation tools? And what proprietary data sets do you have that could break through – domain-specific – that could create breakthrough domain-specific applications using the GPT3 models?
A:There is going to be a block post from our CTO, Dan Sterman, coming out tomorrow sharing really the wide range of opportunities that you could imagine ML will accelerate and stuff we've been working on for quite a while. Going through the whole Roblox virtual universe, we can, of course, imagine code acceleration and the amazingly large data set of Lua code that all of our creators have built on the platform that sits in our cloud that we can accelerate.
Of course, we can model, imagine 3D model acceleration and something very near and dear to the heart of every player on Roblox is their own personal Avatar. Traditionally, Avatar have been created in many, many ways, including mixing and matching parts, moving sliders, but we're going to see more and more a range of innovation around Avatar creation that’s much more natural and natural language-based creation.
And behind the scenes, in addition to this, there is another wide range of opportunities around customer service, around how NPCs perform around the performance of search and discovery, around the creation of 3D materials. So there's many, many ways we're going to harvest and tap into ML here. We have a lot of data and feedback from our users. And stand by, and read more, please, on Thursday.
Q:I guess first for a follow-up and a separate question, you've talked about the kind of transition, you've talked about the transition to a limited items, economy and exclusively limited items, economy on Roblox. I just wanted to hear how your thoughts have evolved on that and what you see timing might be, whether that would be phased or if it's already in progress and when it would kind of be complete?
Also, I guess, as part of that process, will you still be having items created primarily by UGC creator program? Or will it become open by the time of the completion to the general public and the general user base?
A:I will share the long-term vision. You are going to see pieces of this rollout throughout the year. With long-term in the real physical world, there's no constraints on who can create the items that we use in our everyday life. New people can enter that market at any point in time. And we have a wide range of pricing and activity in the real world. We have generic items like white T-shirts, we also have very expensive items like Gucci purses.
We're working as quickly as we can to mimic the range and expressiveness of the commerce we see in the real world and potentially go beyond that. So this is actively under development. We're moving to a UGC economy where there is no limits, where everyone can participate and where robots doesn't make everything – anything really our community makes all of it, where the economy is very vibrant where more and more creators can make a living, creating items on Roblox, and we have a wide range of pricing that makes economic sense.
So, look for more and more things during the course of this year and more and more innovations that mirror how the real world economy works in a virtual world like Roblox.
The above Q&A are highlights that are edited for brevity.Click here for the full Roblox Q4 2022 Earnings Call Transcript.
If you want to know more details, you can click here to re-watch the Roblox Q4 2022 Earnings Conference Call
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