Roblox online games service.
Lionel Bonaventure | AFP | Getty Images
Roblox has postponed plans to go public due to a review of the US Securities and Exchange Commission on how the video game platform recognizes revenue from its finances, according to a memorandum the company sent to employees on Thursday.
The delay is an obstacle to one of the most anticipated US public market debuts in 2021. The company said in a regulatory filing earlier this month that it plans to list shares on the New York Stock Exchange in February.
Roblox’s valuation rose to $ 29.5 billion in a fundraising round earlier this month, more than seven times the $ 4 billion the company valued 11 months earlier on the fund. an increase in the popularity of video games during the COVID-19 pandemic.
The SEC has reservations about how Roblox recognizes revenue from the sale of its currency, Robux, on its platform, according to the note seen by Reuters.
Players use Robux in the game to buy a mix of durable goods that last for a period of time and consumables that are used immediately. Roblox sought to treat all revenues equally and amortize them over its paid user accounts, which is about two years.
The SEC wants Roblox to be more specific and to recognize revenue on consumables as they are consumed, while sustainable services will be recognized throughout the life of the Roblox user, the memo said.
“By adopting that accounting position, our revenues will actually be slightly higher, while bookings, DAUs (daily active users), hours of commitment and cash flow will not change,” wrote the founder and CEO David Baszucki in his note to Roblox personally, whom he referred to as “Robloxians.”
“However, it will take us some time to update this change in our financial statements,” he said.
A Roblox spokesman declined to comment.
This is not the first delay in listing plans. Roblox told employees in December that it has postponed listing until 2021 because it has worked with advisors to improve the process for the benefit of employees and investors. The company has come to change gears and said it will seek to go public through a direct listing instead of an initial public offering (IPO).
Roblox’s revenue – based on its previous definition of metric value – increased 68% to $ 588.7 million in the first nine months of 2020. The company reported a net loss attributable to common shareholders of $ 203.2 million, compared $ 46.3 million a year earlier.
Roblox, which is among the most popular children’s gaming sites in the world and offers a range of games on mobile devices and game consoles, said its daily active user base has grown by 82% to 31, 1 million in the nine months ended September 30 of the same period. a year ago.
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