Roblox Q3 explosive data: daily active users soared 70% to 150 million, engagement increased by 91% to 40 billion hours, and bookings surged 70%. But there is a painful point here - the profit margin expectations have instead weakened.

What is the reason? The management bluntly stated that 2026 will be under pressure because they are spending money like crazy: increasing developer revenue share, expanding data centers and GPUs, and strengthening AI safety reviews (including facial age recognition). In the short term, it seems like self-harm, but the logic is clear—user and ecological health is the foundation for long-term growth.

Competitive pressure is also present, with Meta pouring money into Horizon Worlds and Unity vying for developers. Roblox has simply chosen a growth-first approach.

Valuation perspective: The stock price has risen 20% in 6 months (industry average 10.1%), but the P/S ratio of 8.04X far exceeds the industry average of 2.66X, clearly overvalued. Zacks has given a Hold rating. Can user growth + monetization turn around this overvaluation? This may depend on execution in 2026.