Roblox AI Age Estimation Tool Sparks Investor Concerns Despite Strong Growth Metrics
Roblox unveiled an AI-powered age verification system designed to enhance safety for minors on its platform. CEO David Baszucki confirmed full deployment by year-end, stating the technology will estimate every user's age. The announcement coincided with a 93% year-to-date stock surge despite Friday's 4.2% dip following guidance about increased 2026 expenditures.
Third-quarter results showed robust performance: $1.36 billion revenue (48% YoY growth) surpassed estimates, while bookings and daily active users both grew 70%. However, widening losses to $257.4 million and warnings about 'engagement friction' from the new verification system troubled analysts. JPMorgan's Cory Carpenter maintains an Overweight rating but flagged potential risks to user metrics.
