Roblox Corp

Previous wording

The following discussion and analysis of our financial condition, results of operations, and cash flows should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended December 31, 2024 included in the Annual Report on Form 10-K, which was filed with the SEC on February 18, 2025. This discussion and analysis and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, that involve risks, uncertainties, and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in the section titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and “Special Note Regarding Operating Metrics” included elsewhere in this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any periods in the future. Unless the context otherwise requires, all references in this report to “Roblox,” the “Company,” “we,” “our,” “us,” or similar terms refer to Roblox Corporation and its subsidiaries.

Current wording

The following discussion and analysis of our financial condition, results of operations, and cash flows should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the fiscal year ended December 31, 2024 included in our Annual Report on Form 10-K, which was filed with the SEC on February 18, 2025. This discussion and analysis and other parts of this Quarterly Report on Form 10-Q contain forward-looking statements, such as those relating to our plans, objectives, expectations, intentions, and beliefs, that involve risks, uncertainties, and assumptions. Our actual results could differ materially from these forward-looking statements as a result of many factors, including those discussed in the section titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and “Special Note Regarding Operating Metrics” included elsewhere in this Quarterly Report on Form 10-Q. Our historical results are not necessarily indicative of the results that may be expected for any periods in the future. Unless the context otherwise requires, all references in this report to “Roblox,” the “Company,” “we,” “our,” “us,” or similar terms refer to Roblox Corporation and its subsidiaries.

Previous wording

Our mission is to connect a billion users with optimism and civility. We are constantly improving the ways in which our Platform supports shared experiences, ranging from how these experiences are built by an engaged community of developers and creators to how they are enjoyed and safely accessed by users across the globe. We also believe there is a strong potential to capture a greater percentage of the global gaming market within the Roblox ecosystem. Our goal is to make it as easy as possible for creators and developers to build better experiences, including games, expand content into new genres, and ultimately reach more users.

Current wording

Our mission is to connect a billion users with optimism and civility. We are constantly improving the ways in which our Platform supports shared experiences, ranging from how these experiences are built by an engaged community of developers and creators to how they are enjoyed and safely accessed by users across the globe. We also believe there is a strong potential to capture a greater percentage of the global gaming market within the Roblox ecosystem. Our goal is to make it as easy as possible for creators and developers to build better and safer experiences, including games, and ultimately reach more users. We continue to invest in creating tools for our developers designed to promote key experience genres and deepen engagement on our Platform.

Previous wording

Consistent with our free to play business model, a small portion of our users have historically been payers. For example, in the three months ended June 30, 2025, of our 111.8 million average DAUs, only approximately 1,480,000 represented our average daily unique paying users. Similarly, in the three months ended June 30, 2025, our average daily bookings per DAU was $0.14, whereas our average daily bookings per daily unique paying user was $10.68. We believe that maintaining and growing our overall number of DAUs, including the number of DAUs who may not purchase and spend Robux, is important to the success of our business. As a result, we believe that the number of DAUs who choose to purchase and spend Robux will continue to constitute a small portion of our overall users.

Current wording

Consistent with our free to play business model, a small portion of our users have historically been payers. For example, in the three months ended September 30, 2025, of our 151.5 million average DAUs, only approximately 2,250,000 represented our average daily unique paying users. Similarly, in the three months ended September 30, 2025, our average daily bookings per DAU was $0.14, whereas our average daily bookings per daily unique paying user was $9.28. We believe that maintaining and growing our overall number of DAUs, including the number of DAUs who may not purchase and spend Robux, is important to the success of our business. As a result, we believe that the number of DAUs who choose to purchase and spend Robux will continue to constitute a small portion of our overall users.

Previous wording

In the second half of 2024 and into 2025, we implemented certain Platform policy changes and features as part of our continuing efforts to evolve and refine our safety features. As our safety teams continue to innovate and use advancements in technology to help users feel safe on our Platform, we expect to continue to implement Platform policy, product, technology and other changes, including in anticipation of and in response to regulatory requirements and evolving guidance from leading global organizations focused on child and internet safety in the U.S. and abroad. These changes have impacted and in the future may continue to impact user engagement, revenue, and bookings, particularly from younger users.

Current wording

We are constantly innovating our safety tools and launching new safeguards to promote a safe and enjoyable environment for all our users. As our safety teams continue to innovate and use advancements in technology to help users feel safe on our Platform, we expect to continue to implement Platform policy, product, technology and other changes, including in anticipation of and in response to regulatory requirements and evolving guidance from leading global organizations focused on child and internet safety in the U.S. and abroad. Specifically, in the near future, we expect to expand age verification and/or assurance technology, parental consents or identification verification for users who access voice or text-based chat on the Roblox Platform. Our safety changes have impacted and in the future may continue to impact user engagement, retention, revenue, and bookings, particularly from younger users.

Previous wording

We believe that DAUs, hours engaged, and bookings are highly correlated and over long periods of time, we would expect hours engaged to grow slightly faster than DAUs, and bookings to grow faster than hours engaged. There are many reasons, but generally over long periods of time, as the content on our Platform improves and DAUs increase in tenure, hours engaged tends to go up. Similarly, over time as the content improves and our Platform functionality gets better, we expect more users to become payers and for payers, on average, to increase their purchase of Robux which drives up both average bookings per monthly unique payer and overall bookings per hour engaged. Further, we expect growth in our payers and monetization to lead to growth in revenue and bookings. Within any given month or quarter, the relative behavior of the metrics has not been, and will not always be, consistent.

Current wording

We believe that DAUs, hours engaged, and bookings are highly correlated and over long periods of time, we would expect hours engaged to grow slightly faster than DAUs, and bookings to grow faster than hours engaged. There are many reasons, but generally over long periods of time, as the content on our Platform improves and DAUs increase in tenure, hours engaged tend to go up. Similarly, over time as the content improves and our Platform functionality gets better, we expect more users to become payers and for payers, on average, to increase their purchase of Robux which drives up both average bookings per monthly unique payer and overall bookings per hour engaged. Further, we expect growth in our payers and monetization to lead to growth in revenue and bookings. Within any given period, the relative behavior of the metrics has not been, and will not always be, consistent. For example, in periods of high international growth we may see hours engaged grow faster than bookings as a result of the variation in regional monetization. Additionally, engagement and monetization may vary depending on the popularity and virality of certain experiences.

Previous wording

We define new monthly unique payers as user accounts that made their first payment on the Platform, or via redemption of prepaid cards, during a given month. Average new monthly unique payers for a specified period is the average of the new monthly unique payers for each month during that period.

Current wording

We define monthly unique payers as user accounts that made a payment on the Platform or redeemed a prepaid card during a given month. Average monthly unique payers for a specified period is the average of the monthly unique payers for each month during that period. We use this measure to understand our monetization across our payers.

Previous wording

Based on the carrying amount of deferred revenue and deferred cost of revenue as of March 31, 2024, the change resulted in an increase in revenue and cost of revenue during the three months ended June 30, 2024 of $58.9 million and $12.4 million, respectively.

Current wording

Based on the carrying amount of deferred revenue and deferred cost of revenue as of March 31, 2024, the change resulted in an increase in revenue and cost of revenue during the three months ended September 30, 2024 of $26.4 million and $5.4 million, respectively, and during the nine months ended September 30, 2024 of $85.3 million and $17.8 million, respectively.

Previous wording

We generate substantially all of our revenue through the sale of or access to virtual content to users, enabling them to enhance their social experience on the Roblox Platform. We recognize revenue over the estimated period of time the virtual items are available to the user on the Roblox Platform (estimated average lifetime of a paying user) or at the time the virtual item is consumed. The estimated average lifetime of a paying user is calculated based on the monthly retention data for each paying user cohort. We then calculate the average retention period by determining the weighted-average period paying users have spent on the Platform and are projected to participate in the Roblox environment.

Current wording

We generate substantially all of our revenue through the sale of or access to virtual content to users, enabling them to enhance their social experience on the Roblox Platform. We recognize revenue over the estimated period of time the virtual content is available to the user on the Roblox Platform (estimated average lifetime of a paying user) or at the time the virtual content is consumed. In recent periods, we have seen an increase in user purchases of consumable virtual content, which results in a higher amount of revenue from bookings generated in the same period. For example, consumable virtual items accounted for 22% and 14% of virtual item-related revenue for the three and nine months ended September 30, 2025, respectively, and 8% for each of the three and nine months ended September 30, 2024. In the future, we expect to continue seeing the mix of durable and consumable revenues shift in either direction based on user purchasing preferences, the variety of virtual content being offered by developers and creators, and seasonal variations, amongst other factors.

Previous wording

Personnel costs generally include employee expenses (salaries, benefits, and stock-based compensation expense) and contractor expenses, and are reflected in each expense category, with the exception of cost of revenue and developer exchange fees. In the three and six months ended June 30, 2025, personnel costs were $529.5 million and $1,027.0 million, respectively, and during the three and six months ended June 30, 2024, were $456.5 million and $923.3 million, respectively.

Current wording

Personnel costs generally include employee expenses (salaries, benefits, and stock-based compensation expense) and contractor expenses, and are reflected in each expense category, with the exception of cost of revenue and developer exchange fees. In the three and nine months ended September 30, 2025, personnel costs were $537.3 million and $1,564.2 million, respectively, and during the three and nine months ended September 30, 2024, were $467.4 million and $1,390.7 million, respectively.

Previous wording

Developer exchange fees expense represent the amount earned by developers and creators on the Roblox Platform that are qualified and registered in the Developer Exchange Program. Developers and creators are able to exchange their earned Robux for fiat currency under certain conditions outlined in our Developer Exchange Program. Developers and creators can earn Robux through the sale of access to their experiences and enhancements in their experiences, the incorporation of immersive ads, the sale of content and tools between developers through the Creator Store, and the sale of items to users through the Marketplace. Through July 23, 2025, developers also were able to earn Robux through our engagement-based payouts (“EBP”) program which rewarded developers based on the number of hours spent in their experiences by Roblox Premium subscribers. Beginning July 24, 2025, our EBP program was replaced by our Creator Rewards program, a bonus program that allows creators who publish experiences to earn directly from the engagement their content drives on our Platform. We expect that moving forward, aggregate creator earnings under our Creator Rewards program will exceed aggregate creator earnings under the previous EBP program.

Current wording

Developer exchange fees expense represent the amount earned by developers and creators on the Roblox Platform that are qualified and registered in the Developer Exchange Program. Developers and creators are able to exchange their earned Robux for fiat currency under certain conditions outlined in our Developer Exchange Program. Developers and creators can earn Robux through the sale of access to their experiences and enhancements in their experiences, the incorporation of immersive ads, the sale of content and tools between developers through the Creator Store, and the sale of items to users through the Marketplace.

Previous wording

In order to be qualified for our Developer Exchange Program and eligible to exchange earned Robux for fiat currency, developers and creators must meet certain conditions, such as having earned the minimum amount of Robux required to qualify for the program, a verified developer account, and an account in good standing. On January 31, 2022, we reduced the minimum amount of earned Robux required to qualify for the program from 100,000 Robux to 50,000 Robux and subsequently on January 31, 2023, we further reduced the minimum requirement from 50,000 Robux to 30,000 Robux. We believe these reductions in the minimum amounts required further incentivize our developer and creator community, and promote the long-term growth and the health of such community. As of June 30, 2025, over 29,000 developers and creators qualified for and were registered in our Developer Exchange Program.

Current wording

In order to be qualified for our Developer Exchange Program and eligible to exchange earned Robux for fiat currency, developers and creators must meet certain conditions, such as having earned the minimum amount of Robux required to qualify for the program, a verified developer account, and an account in good standing. On January 31, 2022, we reduced the minimum amount of earned Robux required to qualify for the program from 100,000 Robux to 50,000 Robux and subsequently on January 31, 2023, we further reduced the minimum requirement from 50,000 Robux to 30,000 Robux. We believe these reductions in the minimum amounts required further incentivize our developer and creator community, and promote the long-term growth and the health of such community. As of September 30, 2025, over 32,000 developers and creators qualified for and were registered in our Developer Exchange Program.

Previous wording

Infrastructure and trust & safety expenses consist primarily of expenses related to the operation of our data centers and technical infrastructure. These costs include third-party service provider costs, such as cloud computing or other hosting and data storage, facilities-related expenses for our co-located data centers and edge data centers that we lease and operate, and network and bandwidth costs, as well as depreciation and associated support and maintenance costs of our servers and infrastructure equipment. Depreciation and amortization expense related to infrastructure and trust & safety in the three and six months ended June 30, 2025 was $43.9 million and $87.7 million, respectively, and in the three and six months ended June 30, 2024 was $45.4 million and $91.6 million, respectively.

Current wording

Infrastructure and trust & safety expenses consist primarily of expenses related to the operation of our data centers and technical infrastructure. These costs include third-party service provider costs, such as cloud computing or other hosting and data storage, facilities-related expenses for our co-located data centers and edge data centers that we lease and operate, and network and bandwidth costs, as well as depreciation and associated support and maintenance costs of our servers and infrastructure equipment. Depreciation and amortization expense related to infrastructure and trust & safety in the three and nine months ended September 30, 2025 was $45.6 million and $133.3 million, respectively, and in the three and nine months ended September 30, 2024 was $61.3 million and $152.9 million, respectively.

Previous wording

We plan to continue increasing the capacity, capability, and reliability of our infrastructure to support more sophisticated content, more users, and increased engagement. In fiscal year 2023, we invested heavily in our infrastructure, and as a result, were able to moderate our investment in infrastructure throughout fiscal year 2024 and into the first quarter of 2025. In the second quarter of 2025, our investment in infrastructure grew to meet the demands of continued Platform growth. Over the long term, we expect to increase our investment to support our global infrastructure. We intend to achieve scalability by building and maintaining our own technical infrastructure, while generating operating leverage over the long term.

Current wording

We plan to continue increasing the capacity, capability, and reliability of our infrastructure to support more sophisticated content, more users, and increased engagement. In fiscal year 2023, we invested heavily in our infrastructure, and as a result, were able to moderate our investment in infrastructure throughout fiscal year 2024 and into the first quarter of 2025. Since that time, our investment in infrastructure has grown to meet the demands of continued Platform growth. Over the long term, we expect to increase our investment to support our global infrastructure. We intend to achieve scalability by building and maintaining our own technical infrastructure, while generating operating leverage over the long term.

Previous wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into U.S. law. The OBBBA contains numerous tax reform provisions including immediate deduction of domestic research and development expenditures and accelerated fixed asset depreciation. We are required to recognize the effect of the tax law changes in the period of enactment which is the third quarter of 2025. We do not expect the OBBBA to have a material impact due to anticipated U.S. taxable losses and the full valuation allowance on our net U.S. deferred tax assets. We will continue to evaluate the impact this tax legislation may have on our business.

Current wording

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into U.S. law. The OBBBA contains numerous tax reform provisions including immediate deduction of domestic research and development expenditures and accelerated fixed asset depreciation. The effect of tax law changes are recognized in the period of enactment, which was the third quarter of 2025. The OBBBA did not have a material impact on the financial statements due to the forecasted U.S. taxable loss and the full valuation allowance on the Company’s U.S. deferred tax assets.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

Current wording

Comparison of the Three and Nine Months Ended September 30, 2025 and 2024

Previous wording

The increase in bookings during the three months ended June 30, 2025 compared to the three months ended June 30, 2024 was primarily driven by a higher average number of daily unique paying users during the current period, which increased from approximately 983,000 during the three months ended June 30, 2024 to approximately 1,480,000 during the three months ended June 30, 2025. The average number of daily unique paying users represents the number of user accounts that made a payment on the Platform, including via redemption of prepaid cards for Robux, on an average daily basis during the respective period.

Current wording

The increase in bookings during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily driven by a higher average number of daily unique paying users during the current period, which increased from approximately 1,143,000 during the three months ended September 30, 2024 to approximately 2,250,000 during the three months ended September 30, 2025. The average number of daily unique paying users represents the number of user accounts that made a payment on the Platform, including redemption of prepaid cards for Robux, on an average daily basis during the respective period.

Previous wording

Revenue increased $421.0 million, or 25%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase is primarily due to higher amortization of prior period deferred revenue and an increase in bookings in the current period. The increase in the amortization of prior period deferred revenue was supplemented by the decrease of the estimated average lifetime of a paying user to 27 months in the second quarter of 2024. Refer to the heading “Change in Accounting Estimate” earlier in this section above for more information on the change in paying user life estimates in fiscal year 2024.

Current wording

Revenue increased $861.7 million, or 33%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is primarily due to an increase in revenue recognized from current period bookings and a higher amortization of prior period deferred revenue. The increase in revenue recognized from current period bookings was driven by an increase in bookings, coupled with an increase in consumable virtual item-related revenue, which accounted for 14% of virtual-item related revenue during the nine months ended September 30, 2025, as compared to 8% in the nine months ended September 30, 2024. The increase in the amortization of prior period deferred revenue was supplemented by the decrease of the estimated average lifetime of a paying user to 27 months in the second quarter of 2024. Refer to the heading “Change in Accounting Estimate” earlier in this section above for more information on the change in paying user life estimates in fiscal year 2024.

Previous wording

The increase in bookings during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was primarily driven by a higher average number of daily unique paying users during the current period, which increased from approximately 949,000 during the six months ended June 30, 2024 to approximately 1,350,000 during the six months ended June 30, 2025.

Current wording

The increase in bookings during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily driven by a higher average number of daily unique paying users during the current period, which increased from approximately 1,013,000 during the nine months ended September 30, 2024 to approximately 1,650,000 during the nine months ended September 30, 2025.

Previous wording

Cost of revenue increased $37.6 million, or 19%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase is primarily due to an increase of $34.8 million in expense for payment processing fees, primarily driven by a higher amortization of prior period deferred cost of revenue and an increase in current period payment processing fees from the related growth in bookings.

Current wording

Cost of revenue increased $91.5 million, or 45%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is primarily due to an increase of $87.9 million in expense for payment processing fees, primarily driven by an increase in cost of revenue generated by current period payment processing fees from the related growth in bookings and a higher amortization of prior period deferred cost of revenue. The increase in cost of revenue recognized from current period payment processing fees was driven by an increase in bookings, coupled with the aforementioned increase in consumable virtual item-related revenue, as the payment processing fees are expensed over the same period as the respective revenue.

Previous wording

Cost of revenue increased $83.4 million, or 22%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase is primarily due to an increase of $81.3 million in expense for payment processing fees, primarily driven by a higher amortization of prior period deferred cost of revenue and an increase in current period payment processing fees from the related growth in bookings. The increase in the amortization of prior period deferred cost of revenue was supplemented by the decrease of the estimated average lifetime of a paying user to 27 months in the second quarter of 2024. Refer to the heading “Change in Accounting Estimate” earlier in this section above for more information on the change in paying user life estimates in fiscal year 2024.

Current wording

The increase in the amortization of prior period deferred cost of revenue was supplemented by the decrease of the estimated average lifetime of a paying user to 27 months in the second quarter of 2024. Refer to the heading “Change in Accounting Estimate” earlier in this section above for more information on the change in paying user life estimates in fiscal year 2024.

Previous wording

Developer exchange fees increased $108.1 million, or 52%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase is primarily driven by an increase in amounts earned by developers and creators due to the growth in bookings over the same period. However, the growth in developer exchange fees slightly exceeded the growth in bookings, primarily driven by differential Robux pricing which launched in November 2024, and offers more Robux for users purchasing Robux through payment processing channels with lower transaction processing fees, which in turn increases the supply of Robux available for developers to earn.

Current wording

Developer exchange fees increased $196.4 million, or 85%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is primarily driven by an increase in amounts earned by developers and creators due to the growth in bookings over the same period. The growth in developer exchange fees exceeded the growth in bookings, primarily driven by (i) differential Robux pricing which launched in November 2024, and offers more Robux for users purchasing Robux through payment processing channels with lower transaction processing fees, which in turn increases the supply of Robux available for developers to earn, (ii) the launch of Creator Rewards in July 2025, which generated higher expense than our legacy EBP program in the prior period, and (iii) the increase of the exchange rate of earned Robux to fiat currency by 8.5% for Robux earned by developers and creators prospectively from September 5, 2025 onwards.

Previous wording

Developer exchange fees increased $187.3 million, or 46%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase is primarily driven by an increase in amounts earned by developers and creators due to the growth in bookings over the same period. However, the growth in developer exchange fees exceeded the growth in bookings, primarily driven by the aforementioned differential Robux pricing which launched in November 2024.

Current wording

Developer exchange fees increased $383.7 million, or 60%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is primarily driven by an increase in amounts earned by developers and creators due to the growth in bookings over the same period. The growth in developer exchange fees exceeded the growth in bookings, primarily driven by the aforementioned (i) differential Robux pricing which launched in November 2024 and (ii) launch of Creator Rewards in July 2025.

Previous wording

Infrastructure and trust & safety expenses increased $39.6 million, or 18%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase is primarily driven by an increase of $27.7 million related to data center and technical infrastructure expenses (including depreciation and amortization) and hosting costs associated with providing the Platform to our users, as well as an increase of $10.4 million in personnel costs, which includes an increase of $6.6 million in stock-based compensation expense, primarily due to an increase in headcount to support our infrastructure growth.

Current wording

Infrastructure and trust & safety expenses increased $76.8 million, or 31%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is primarily driven by an increase of $61.1 million related to data center and technical infrastructure expenses (including depreciation and amortization) and hosting costs associated with providing the Platform to our users. The overall change in data center and technical infrastructure expenses reflects the one-time $17.9 million acceleration of depreciation expense in the third quarter of 2024 related to the Company’s re-assessment of the estimated useful life of certain software licenses.

Previous wording

Infrastructure and trust & safety expenses increased $54.8 million, or 12%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase is primarily due to an increase of $37.8 million related to data center and technical infrastructure expenses (including depreciation and amortization) associated with providing the Platform to our users, as well as an increase of $18.2 million in personnel costs, which includes an increase of $12.9 million in stock-based compensation expense, primarily due to an increase in headcount to support our infrastructure growth. The overall increase was offset bya decrease of $6.2 million in moderation and customer support related costs primarily due to internal efficiency gains and automation from AI-driven tools.

Current wording

The increase in infrastructure and trust & safety expenses was supplemented by an increase of $32.0 million in personnel costs, which includes an increase of $20.4 million in stock-based compensation expense, primarily due to an increase in headcount to support our infrastructure growth. The overall increase in infrastructure and trust & safety expenseswas offset bya decrease of $6.2 million in moderation and customer support related costs primarily due to internal efficiency gains and automation from AI-driven tools.

Previous wording

Research and development expenses increased $23.3 million, or 6%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase is primarily due to an increase of $26.0 million in personnel costs, which includes an increase of $8.1 million in stock-based compensation expense, primarily due to growth in headcount supporting our engineering, design, and product teams.

Current wording

Research and development expenses increased $32.9 million, or 9%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is primarily due to an increase of $32.3 million in personnel costs, which includes an increase of $6.8 million in stock-based compensation expense, primarily due to growth in headcount supporting our engineering, design, and product teams.

Previous wording

Research and development expenses increased $35.8 million, or 5%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase is primarily due to an increase of $36.0 million in personnel costs, which includes an increase of $11.8 million in stock-based compensation expense, primarily due to growth in headcount supporting our engineering, design, and product teams.

Current wording

Research and development expenses increased $68.7 million, or 6%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is primarily due to an increase of $68.3 million in personnel costs, which includes an increase of $18.6 million in stock-based compensation expense, primarily due to growth in headcount supporting our engineering, design, and product teams.

Previous wording

General and administrative expenses increased $46.5 million, or 44%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase is primarily due to an increase of $27.1 million in personnel costs, which includes an increase of $13.8 million in stock-based compensation expense, primarily due to growth in headcount, an increase of $10.3 million in professional services-related expense, primarily related to litigation costs, and an increase of $3.1 million in withholding-related taxes.

Current wording

General and administrative expenses increased $46.3 million, or 47%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is primarily due to an increase of $16.5 million in personnel costs, which includes an increase of $5.2 million in stock-based compensation expense, primarily due to growth in headcount, an increase of $15.2 million in transactional taxes, and an increase of $9.8 million in professional services-related expense, primarily related to legal fees associated with ongoing litigation.

Previous wording

General and administrative expenses increased $67.8 million, or 33%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase is primarily due to an increase of $32.8 million in personnel costs, which includes an increase of $18.1 million in stock-based compensation expense, primarily due to growth in headcount, an increase of $23.7 million in professional services-related expense, primarily related to litigation costs, and an increase of $4.1 million in withholding-related taxes.

Current wording

General and administrative expenses increased $114.1 million, or 38%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is primarily due to an increase of $49.3 million in personnel costs, which includes an increase of $23.3 million in stock-based compensation expense, primarily due to growth in headcount, an increase of $33.5 million in professional services-related expense, primarily related to legal fees associated with ongoing litigation, and an increase of $17.9 million in transactional taxes.

Previous wording

Sales and marketing expenses increased $16.5 million, or 46%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase is primarily due to an increase of $9.5 million in personnel costs, which includes an increase of $4.3 million in stock-based compensation expense, primarily due to continued growth in headcount to support our sales and marketing teams, and an increase of $6.9 million in advertising and promotional expenses.

Current wording

Sales and marketing expenses increased $14.5 million, or 28%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is primarily due to an increase of $7.7 million in advertising and promotional expenses and an increase of $7.3 million in personnel costs, which includes an increase of $2.4 million in stock-based compensation expense, primarily due to continued growth in headcount to support our sales and marketing teams.

Previous wording

Sales and marketing expenses increased $28.8 million, or 40%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase is primarily due to an increase of $16.6 million in personnel costs, which includes an increase of $8.5 million in stock-based compensation expense, primarily due to continued growth in headcount to support our sales and marketing teams, and an increase of $11.4 million in advertising and promotional expenses.

Current wording

Sales and marketing expenses increased $43.3 million, or 35%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase is primarily due to an increase of $23.9 million in personnel costs, which includes an increase of $10.8 million in stock-based compensation expense, primarily due to continued growth in headcount to support our sales and marketing teams, and an increase of $19.1 million in advertising and promotional expenses.

Previous wording

Interest income increased $4.5 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 and increased $8.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase for both periods was primarily due to higher average investments in debt securities, partially offset by lower average interest rates.

Current wording

Interest income increased $5.4 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 and increased $14.0 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase for both periods was primarily due to higher average investments in debt securities, partially offset by lower average interest rates.

Previous wording

Other income/(expense), net changed by $8.4 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 and changed by $12.1 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The change was primarily driven by foreign currency exchange gains.

Current wording

Other income/(expense), net changed by $4.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 and changed by $7.9 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The change was primarily driven by changes in foreign currency exchange gains/(losses).

Previous wording

Interest expense and provision for/(benefit from) income taxes were relatively flat (in terms of amount) for the three and six months ended June 30, 2025 compared to the same periods of the prior year.

Current wording

Interest expense and provision for/(benefit from) income taxes were relatively flat (in terms of amount) for the three and nine months ended September 30, 2025 compared to the same periods of the prior year.

Previous wording

As of June 30, 2025 and December 31, 2024, our principal sources of liquidity were cash and cash equivalents and short-term and long-term investments of $4.7 billion and $4.0 billion, respectively, which were primarily held for working capital purposes, capital expenditures, and acquisitions. Our investment policy and strategy are focused on the preservation of capital and supporting our liquidity requirements. We do not enter into investments for trading or speculative purposes.

Current wording

As of September 30, 2025 and December 31, 2024, our principal sources of liquidity were cash and cash equivalents and short-term and long-term investments of $5.2 billion and $4.0 billion, respectively, which were primarily held for working capital purposes, capital expenditures, and acquisitions. Our investment policy and strategy are focused on the preservation of capital and supporting our liquidity requirements. We do not enter into investments for trading or speculative purposes.

Previous wording

During the six months ended June 30, 2025, net cash and cash equivalents provided by operating activities was $643.2 million, which consisted of consolidated net loss of $496.1 million, adjusted by non-cash charges of $682.9 million and net cash inflows from the change in net operating assets and liabilities of $456.4 million. The non-cash charges were primarily comprised of stock-based compensation expense of $543.7 million and depreciation and amortization expense of $107.5 million. The net cash and cash equivalents inflow from the change in our net operating assets and liabilities was primarily due to a $538.8 million increase in deferred revenue, primarily due to bookings generated in the current period, and an $87.7 million decrease in accounts receivable, net, due to the timing of collection of prior period bookings and receipts on bookings generated in the current period. The overall increase was offset by a $93.3 million increase in deferred cost of revenue, primarily due to payment processing fees incurred in the current period, and a $53.1 million decrease due to payment of operating lease liabilities.

Current wording

During the nine months ended September 30, 2025, net cash and cash equivalents provided by operating activities was $1,189.4 million, which consisted of consolidated net loss of $753.5 million, adjusted by non-cash charges of $1,035.5 million and net cash inflows from the change in net operating assets and liabilities of $907.4 million. The non-cash charges were primarily comprised of stock-based compensation expense of $830.6 million and depreciation and amortization expense of $162.8 million. The net cash and cash equivalents inflow from the change in our net operating assets and liabilities was primarily due to a $1,113.1 million increase in deferred revenue, primarily due to bookings generated in the current period, and a $52.1 million increase in our developer exchange liability, primarily driven by the increase in bookings generated in the current period, coupled with the timing of payments. The overall increase was offset by a $208.6 million increase in deferred cost of revenue, primarily due to payment processing fees incurred in the current period, and a $84.6 million decrease related to the payment of operating lease liabilities.

Previous wording

During the six months ended June 30, 2025, net cash and cash equivalents used in investing activities was $429.7 million, primarily consisting of $389.7 million of investment purchases – net of sales and maturities, and capital expenditures of $40.0 million.

Current wording

During the nine months ended September 30, 2025, net cash and cash equivalents used in investing activities was $973.1 million, primarily consisting of $829.6 million of investment purchases – net of sales and maturities, and capital expenditures of $142.6 million.

Previous wording

During the six months ended June 30, 2025, net cash and cash equivalents provided by financing activities was $63.7 million, driven by the exercise of stock options and purchase of shares under our employee stock purchase plan.

Current wording

During the nine months ended September 30, 2025, net cash and cash equivalents provided by financing activities was $84.5 million, driven by the exercise of stock options and purchase of shares under our employee stock purchase plan.

Previous wording

The Company has letters of credit in connection with its office facilities in San Mateo, California and data center facilities in Ashburn, Virginia and Chicago, Illinois which are not reflected in the Company’s condensed consolidated balance sheets as of June 30, 2025 and December 31, 2024. There have been no material changes to the Company’s letters of credit during the six months ended June 30, 2025. We did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other purposes.

Current wording

The Company has letters of credit in connection with its office facilities in San Mateo, California and data center facilities in Ashburn, Virginia and Chicago, Illinois which are not reflected in the Company’s condensed consolidated balance sheets as of September 30, 2025 and December 31, 2024. There have been no material changes to the Company’s letters of credit during the nine months ended September 30, 2025. We did not have any relationships with unconsolidated entities or financial partnerships, such as structured finance or special purpose entities that were established for the purpose of facilitating off-balance sheet arrangements or other purposes.

Previous wording

Contractual commitments include obligations under operating leases for office facilities and data center operations. There have been no material changes to the nature of our operating lease commitments during the six months ended June 30, 2025, except for lease commitments primarily related to office facilities and space for data center operations in the ordinary course of business.

Current wording

Contractual commitments include obligations under operating leases for office facilities and data center operations. There have been no material changes to the nature of our operating lease commitments during the nine months ended September 30, 2025, except for lease commitments primarily related to office facilities and space for data center operations in the ordinary course of business.

Previous wording

Other purchase obligations primarily consist of non-cancellable obligations with our data center hosting providers, software vendors, and payment processors. There have been no material changes in the Company’s purchase obligations during the six months ended June 30, 2025, other than for non-cancellable obligations primarily related to data center hosting providers, software vendors, and payment processors in the ordinary course of business.

Current wording

Other purchase obligations primarily consist of non-cancellable obligations with our data center hosting providers, software vendors, and payment processors. There have been no material changes in the Company’s purchase obligations during the nine months ended September 30, 2025, other than for non-cancellable obligations primarily related to data center hosting providers, software vendors, and payment processors in the ordinary course of business.