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, 2025 included in our Annual Report on Form 10-K filed with the SEC (the “2025 Annual Report”). 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, 2025 included in our Annual Report on Form 10-K filed with the SEC (the “2025 Annual Report”). 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 sections 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

Consistent with our free to use business model, a small portion of our users have historically been payers. For example, in the three months ended June 30, 2026, of our 123 million average Daily Active Users (“DAUs”), only approximately 1.6 million represented our average daily unique paying users. Similarly, in the three months ended June 30, 2026, our average daily bookings per DAU was $0.14, whereas our average daily bookings per daily unique paying user was $10.42. We believe that maintaining and growing our overall number of users, including the number of users who may not purchase and spend Robux, is important to the success of our business. As a result, we believe that the number of users 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 use business model, a small portion of our users have historically been payers. For example, in the three months ended September 30, 2026, of our 138 million average daily active users (“DAUs”), only approximately 1.8 million represented our average daily unique paying users. Similarly, in the three months ended September 30, 2026, our average daily bookings per DAU was $0.13, whereas our average daily bookings per daily unique paying user was $9.98. We believe that maintaining and growing our overall number of users, including the number of users who may not purchase and spend Robux, is important to the success of our business. As a result, we believe that the number of users who choose to purchase and spend Robux will continue to constitute a small portion of our overall users.

Previous wording

We are constantly innovating our safety tools and launching new safeguards to promote a safe and enjoyable environment for 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. We continue to develop, test, and implement new systems designed to age-check users prior to accessing chat on our Platform. In addition, we recently launched Roblox Kids and Roblox Select, which are age-based account types designed to provide children and younger teens with age-appropriate games and safety features. Our safety changes have impacted and may continue to impact engagement, retention, revenue, and bookings.

Current wording

We are constantly innovating our safety tools and launching new safeguards to promote a safe and enjoyable environment for 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. We continue to develop, test, and implement new systems designed to age-check users prior to accessing chat on our Platform. In the first half of 2026, we also launched Roblox Kids and Roblox Select, which are age-based account types designed to provide children and younger teens with age-appropriate games and safety features. Our safety changes have impacted and may continue to impact engagement, retention, revenue, and bookings.

Previous wording

We manage our business by tracking several operating metrics, including those outlined below. As a management team, we believe each of these operating metrics provides useful information to investors and others. For complete definitions and limitations of these metrics, refer to the section titled “Special Note Regarding Operating Metrics” of this Quarterly Report on Form 10-Q.

Current wording

We manage our business by tracking several operating metrics, including those outlined below. As a management team, we believe each of these operating metrics provides useful information to investors and others. For complete definitions and limitations of these metrics, refer to the section titled “Special Note Regarding Operating Metrics” in this Quarterly Report on Form 10-Q.

Previous wording

(1)Includes legal expenses related to settlements and settlement negotiations with certain states regarding youth-related consumer protection and digital safety matters. The Company has determined that these matters arise outside of the ordinary course of business, have limited historical precedent, are unpredictable in their magnitude, scope, and timing, and as a result are distinct from routine expenses incurred in ongoing operations.

Current wording

(1)Includes legal expenses related to settlements and settlement negotiations with certain states and territories regarding youth-related consumer protection and digital safety matters. The Company has determined that these matters arise outside of the ordinary course of business, have limited historical precedent, are unpredictable in their magnitude, scope, and timing, and as a result are distinct from routine expenses incurred in ongoing operations.

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, 2026, personnel costs were $565 million and $1,130 million, respectively, and during the three and six months ended June 30, 2025, were $530 million and $1,027 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, 2026, personnel costs were $579 million and $1,709 million, respectively, and during the three and nine months ended September 30, 2025, were $537 million and $1,564 million, respectively.

Previous wording

On January 31, 2022, we reduced the minimum amount of earned Robux required to qualify for the Developer Exchange 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 incentivize our creator community, while promoting its long-term growth and health. As of June 30, 2026, over 42,000 creators qualified for and were registered in our Developer Exchange Program.

Current wording

On January 31, 2022, we reduced the minimum amount of earned Robux required to qualify for the Developer Exchange Program from 100,000 Robux to 50,000 Robux and 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 incentivize our creator community, while promoting its long-term growth and health. As of September 30, 2026, over 45,000 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, 2026 was $58 million and $112 million, respectively, and in the three and six months ended June 30, 2025 was $44 million and $88 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, 2026 was $59 million and $171 million, respectively, and in the three and nine months ended September 30, 2025 was $46 million and $133 million, respectively.

Previous wording

Infrastructure and trust & safety expenses also include personnel costs, moderation and customer support related costs, and allocated overhead expenses. We have been and expect to continue investing in AI and automation to increase the accuracy and efficiency of our safety moderation and customer support related efforts, which has increased the quality of our safety and civility systems and led to a decrease in safety moderation and customer support costs in recent periods.

Current wording

Infrastructure and trust & safety expenses also include personnel costs, moderation and customer support related costs, trust & safety-related marketing, and allocated overhead expenses. We have been and expect to continue investing in AI and automation to increase the accuracy and efficiency of our safety moderation and customer support related efforts, which has increased the quality of our safety and civility systems.

Previous wording

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Current wording

Comparison of the Three and Nine Months Ended September 30, 2026 and 2025

Previous wording

Revenue increased $795 million, or 38%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is primarily due to a higher amortization of prior period deferred revenue and an increase in revenue recognized from current period bookings. 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 10% of virtual-item related revenue during the six months ended June 30, 2026, as compared to 9% in the six months ended June 30, 2025.

Current wording

Revenue increased $212 million, or 16%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase is primarily due to higher amortization of prior period deferred revenue. This increase was partially offset by a decrease in revenue recognized from current period bookings driven by a decrease in bookings and a decrease in consumable virtual item-related revenue, which accounted for 10% of virtual item-related revenue during the three months ended September 30, 2026 as compared to 22% in the three months ended September 30, 2025.

Previous wording

The increase in bookings during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily driven by a higher average number of daily unique paying users during the current period, which increased to approximately 1.6 million during the three months ended June 30, 2026 from approximately 1.5 million 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 redemption of prepaid cards for Robux, on an average daily basis during the respective period.

Current wording

The decrease in bookings during the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily driven by a lower average number of daily unique paying users during the current period, which decreased to approximately 1.8 million during the three months ended September 30, 2026 from approximately 2.3 million 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 $388 million, or 36%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase is primarily due to a higher amortization of prior period deferred revenue and an increase in revenue recognized from current period bookings. The increase in revenue recognized from current period bookings was driven by an increase in bookings. The increase in revenue is partially offset by a decrease in consumable virtual item-related revenue, which accounted for 9% of virtual-item related revenue during the three months ended June 30, 2026 as compared to 10% in the three months ended June 30, 2025.

Current wording

Revenue increased $1,007 million, or 29%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase is primarily due to higher amortization of prior period deferred revenue and an increase in revenue recognized from current period bookings. The increase in revenue recognized from current period bookings was driven by an increase in bookings. This increase in revenue was partially offset by a decrease in consumable virtual item-related revenue, which accounted for 10% of virtual item-related revenue during the nine months ended September 30, 2026, as compared to 14% in the nine months ended September 30, 2025.

Previous wording

The increase in bookings during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily driven by a higher average number of daily unique paying users during the current period, which increased to approximately 1.8 million during the six months ended June 30, 2026 from approximately 1.4 million during the six months ended June 30, 2025.

Current wording

The increase in bookings during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily driven by a higher average number of daily unique paying users during the current period, which increased to approximately 1.8 million during the nine months ended September 30, 2026 from approximately 1.7 million during the nine months ended September 30, 2025.

Previous wording

Cost of revenue increased $56 million, or 24%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase is primarily due to an increase of $64 million in expense associated with payment processing fees, largely from higher amortization of prior period payment processing fees and an increase in expense associated with current period payment processing fees driven by the related growth in bookings. The increase in cost of revenue recognized from current period payment processing fees was partially offset by the aforementioned decrease in consumable virtual item-related revenue, as the payment processing fees are expensed over the same period as the respective revenue. This increase was also partially offset by a mix shift toward payment processors with lower payment processing fees.

Current wording

Cost of revenue increased $22 million, or 7%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase is primarily due to an increase of $19 million in expense associated with payment processing fees, largely from higher amortization of prior period payment processing fees. Additionally, the increase in cost of revenue was supplemented by higher prepaid card printing costs. The increase in cost of revenue was partially offset by a decrease in current period payment processing fees driven by the related decline in bookings, a decrease in consumable virtual item-related revenue as the related payment processing fees are expensed over the same period as the respective revenue, and a mix shift toward payment processors with lower payment processing fees.

Previous wording

Cost of revenue increased $125 million, or 27%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is primarily due to an increase of $135 million in expense for payment processing fees, largely from higher amortization of prior period payment processing fees and an increase in expense associated with current period payment processing fees driven by the related growth in bookings. The increase in cost of revenue recognized from current period payment processing fees was also driven by the aforementioned increase in consumable virtual item-related revenue, as the payment processing fees are expensed over the same period as the respective revenue. This increase was partially offset by a mix shift toward payment processors with lower payment processing fees.

Current wording

Cost of revenue increased $147 million, or 19%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase is primarily due to an increase of $154 million in expense for payment processing fees, largely from higher amortization of prior period payment processing fees, and an increase in expense associated with current period payment processing fees driven by the related growth in bookings. Additionally, the increase in cost of revenue was supplemented by higher prepaid card printing costs. The increase in cost of revenue was partially offset by the aforementioned decrease in consumable virtual item-related revenue, as the payment processing fees are expensed over the same period as the respective revenue, and by a mix shift toward payment processors with lower payment processing fees.

Previous wording

Developer exchange fees increased $47 million, or 15%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase is primarily driven by an increase in amounts earned by 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 an 8.5% increase in the amount creators in our Developer Exchange Program can receive in fiat currency based on earned Robux accumulated, prospectively from September 5, 2025 onwards, and the launch of Creator Rewards in July 2025, which generated higher expense than our legacy EBP program in the prior period.

Current wording

Developer exchange fees decreased $25 million, or 6%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The decrease is primarily driven by a decrease in amounts earned by creators due to the decline in bookings over the same period. The decrease was partially offset by an 8.5% increase in the amount creators in our Developer Exchange Program can receive in fiat currency based on earned Robux accumulated, from September 5, 2025 onwards, and by the increase in the Developer Exchange rate for eligible in-game spend generated by age-checked U.S. users 18 or older beginning June 8, 2026.

Previous wording

Developer exchange fees increased $188 million, or 31%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is primarily driven by an increase in amounts earned by 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 8.5% increase in the amount creators in our Developer Exchange Program can receive in fiat currency based on earned Robux accumulated and launch of Creator Rewards in July 2025, which generated higher expense than our legacy EBP program in the prior period.

Current wording

Developer exchange fees increased $163 million, or 16%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase is primarily driven by an increase in amounts earned by 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 8.5% increase in the amount creators in our Developer Exchange Program can receive in fiat currency based on earned Robux accumulated and the launch of Creator Rewards in July 2025.

Previous wording

Infrastructure and trust & safety expenses increased $102 million, or 39%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase is primarily driven by an increase of $76 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 increase was supplemented by an increase of $15 million in trust & safety-related marketing expenses. Additionally, personnel costs increased by $5 million, primarily due to an increase in headcount.

Current wording

Infrastructure and trust & safety expenses increased $64 million, or 20%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase is primarily driven by an increase of $47 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 increase was supplemented by an increase of $7 million in trust & safety-related marketing expenses and an increase of $4 million in moderation and customer support related costs.

Previous wording

Infrastructure and trust & safety expenses increased $184 million, or 37%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is primarily due to an increase of $142 million related to data center and technical infrastructure expenses (including depreciation and amortization) associated with providing the Platform to our users. The increase was supplemented by an increase of $19 million in trust & safety-related marketing expenses. Additionally, personnel costs increased by $14 million, primarily due to an increase in headcount.

Current wording

Infrastructure and trust & safety expenses increased $248 million, or 30%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase is primarily due to an increase of $189 million related to data center and technical infrastructure expenses (including depreciation and amortization) associated with providing the Platform to our users. The increase was supplemented by an increase of $26 million in trust & safety-related marketing expenses and an increase of $7 million in moderation and customer support related costs. Additionally, personnel costs increased by $14 million, primarily due to an increase in headcount.

Previous wording

Research and development expenses increased $83 million, or 11%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is primarily due to an increase of $81 million in personnel costs, which includes an increase of $21 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 $36 million, or 9%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase is primarily due to an increase of $28 million in personnel costs, primarily due to growth in headcount supporting our engineering, design, and product teams.

Previous wording

Research and development expenses increased $35 million, or 9%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase is primarily due to an increase of $33 million in personnel costs, which includes an increase of $6 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 $119 million, or 10%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase is primarily due to an increase of $110 million in personnel costs, which includes an increase of $31 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 $47 million, or 31%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase is primarily due to $34 million in legal settlement accruals related to settlements and settlement negotiations with various states regarding youth-related consumer protection and digital safety matters. The increase also includes an increase of $18 million in professional services, primarily from legal fees associated with ongoing litigation and investigations.

Current wording

General and administrative expenses increased $58 million, or 40%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase is primarily due to $49 million in legal settlement accruals related to settlements and settlement negotiations with various states and territories regarding youth-related consumer protection and digital safety matters. The increase also includes an increase of $4 million in professional services, primarily from legal fees associated with ongoing litigation and investigations.

Previous wording

General and administrative expenses increased $137 million, or 51%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is primarily due to $91 million in legal settlement accruals related to settlements and settlement negotiations with various states regarding youth-related consumer protection and digital safety matters. The increase also includes an increase of $33 million in professional services-related expense, primarily from legal fees associated with ongoing litigation and investigations.

Current wording

General and administrative expenses increased $195 million, or 47%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase is primarily due to $140 million in legal settlement accruals related to settlements and settlement negotiations with various states and territories regarding youth-related consumer protection and digital safety matters. The increase also includes an increase of $37 million in professional services, primarily from legal fees associated with ongoing litigation and investigations, and an increase of $7 million in personnel costs, primarily due to growth in headcount.

Previous wording

Sales and marketing expenses increased $8 million, or 15%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase is primarily due to an increase of $4 million in advertising and promotional expenses, and an increase of $3 million in personnel costs, primarily due to growth in headcount.

Current wording

Sales and marketing expenses increased $44 million, or 66%, for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. The increase is primarily due to an increase of $31 million in advertising and promotional expenses, and an increase of $9 million in personnel costs, primarily due to growth in headcount.

Previous wording

Sales and marketing expenses increased $24 million, or 24%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase is primarily due to an increase of $17 million in advertising and promotional expenses, and an increase of $4 million in personnel costs, primarily due to continued growth in headcount.

Current wording

Sales and marketing expenses increased $68 million, or 40%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase is primarily due to an increase of $48 million in advertising and promotional expenses, and an increase of $14 million in personnel costs, primarily due to growth in headcount.

Previous wording

Interest income increased $10 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 and increased $19 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. 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 $8 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 and increased $27 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase for both periods was primarily due to higher average investments in debt securities, partially offset by lower average interest rates.

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, 2026 compared to the same periods of the prior year.

Current wording

Other income/(expense), net, 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, 2026 compared to the same periods of the prior year.

Previous wording

As of June 30, 2026 and December 31, 2025, our principal sources of liquidity were cash and cash equivalents and short-term and long-term investments of $6.1 billion and $5.5 billion, respectively, which were primarily held for working capital purposes, capital expenditures, share repurchases, 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, 2026 and December 31, 2025, our principal sources of liquidity were cash and cash equivalents and short-term and long-term investments of $6.2 billion and $5.5 billion, respectively, which were primarily held for working capital purposes, capital expenditures, share repurchases, 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

The 2030 Notes are unsecured obligations and the Indenture contains covenants limiting the Company and its subsidiaries’ ability to: (i) create certain liens and enter into sale and lease-back transactions; (ii) create, assume, incur, or guarantee indebtedness; or (iii) consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of the Company and its subsidiaries’ assets to another person, all of which are limited to amounts not to exceed the greater of $4.0 billion and 3.5x “Consolidated EBITDA” (as defined in the Indenture and referred to as “Covenant Adjusted EBITDA” throughout this section). Non-compliance with these covenants may result in the acceleration of repayment of the 2030 Notes and any accrued and unpaid interest.

Current wording

The 2030 Notes are unsecured obligations and the Indenture contains covenants limiting the Company and its subsidiaries’ ability to: (i) create certain liens and enter into sale and lease-back transactions; (ii) create, assume, incur, or guarantee indebtedness; or (iii) consolidate or merge with or into, or sell or otherwise dispose of all or substantially all of the Company and its subsidiaries’ assets to another person, all of which are limited to amounts not to exceed the greater of $4.0 billion and 3.5x “Consolidated EBITDA” (as defined in the Indenture and referred to as “Covenant Adjusted EBITDA” throughout this section). Noncompliance with these covenants may result in the acceleration of repayment of the 2030 Notes and any accrued and unpaid interest.

Previous wording

Accordingly, the Company presents Covenant Adjusted EBITDA calculated in accordance with “Consolidated EBITDA” as that term is defined in the Indenture, which is not calculated in accordance with GAAP and may not conform to the calculation of Adjusted EBITDA by other companies. Covenant Adjusted EBITDA should not be considered as a substitute for a measure of our financial performance or other liquidity measures prepared in accordance with GAAP and is also not indicative of income or loss calculated in accordance with GAAP. Management believes that this calculation is useful to investors for purposes of analyzing our compliance with certain covenants specified in the Indenture.

Current wording

Accordingly, we present Covenant Adjusted EBITDA calculated in accordance with “Consolidated EBITDA” as that term is defined in the Indenture, which is not calculated in accordance with GAAP and may not conform to the calculation of Adjusted EBITDA by other companies. Covenant Adjusted EBITDA should not be considered as a substitute for a measure of our financial performance or other liquidity measures prepared in accordance with GAAP and is also not indicative of income or loss calculated in accordance with GAAP. Management believes that this calculation is useful to investors for purposes of analyzing our compliance with certain covenants specified in the Indenture.

Previous wording

(1)Includes legal expenses related to settlements and settlement negotiations with certain states regarding youth-related consumer protection and digital safety matters. The Company has determined that these matters arise outside of the ordinary course of business, have limited historical precedent, are unpredictable in their magnitude, scope, and timing, and as a result are distinct from routine expenses incurred in ongoing operations.

Current wording

(1)Includes legal expenses related to settlements and settlement negotiations with certain states and territories regarding youth-related consumer protection and digital safety matters. The Company has determined that these matters arise outside of the ordinary course of business, have limited historical precedent, are unpredictable in their magnitude, scope, and timing, and as a result are distinct from routine expenses incurred in ongoing operations.

Previous wording

In May 2026, our Board of Directors authorized a share repurchase program for up to $3.0 billion of our Class A common stock. During the three months ended June 30, 2026, we repurchased and subsequently retired 8.2 million shares of our Class A common stock for an aggregate amount of $380 million. Although we intend to repurchase up to $1.0 billion over the first 12 months of the program, the ultimate timing, manner, price, and amount of any repurchases will be determined by us at our discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. The program may also be suspended or discontinued at any time, and does not obligate us to repurchase any amount of Class A common stock. Refer to Note 9, “Stockholders’ Equity” in the notes to condensed consolidated financial statements, and “Purchases of Equity Securities by the Issuer and Affiliated Purchasers” included in Part II, Item 2 of this Quarterly Report on Form 10-Q for further details.

Current wording

In May 2026, our Board of Directors authorized a share repurchase program for up to $3.0 billion of our Class A common stock. During the three and nine months ended September 30, 2026, we repurchased and subsequently retired 4.4 million and 12.6 million shares of our Class A common stock, respectively, for an aggregate amount of $200 million and $580 million, respectively. Although we intend to repurchase up to $1.0 billion over the first 12 months of the program, the ultimate timing, manner, price, and amount of any repurchases will be determined by us at our discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. The program may also be suspended or discontinued at any time, and does not obligate us to repurchase any amount of Class A common stock. Refer to Note 9, “Stockholders’ Equity/(Deficit)” in the notes to condensed consolidated financial statements, and “Purchases of Equity Securities by the Issuer and Affiliated Purchasers” included in Part II, Item 2 of this Quarterly Report on Form 10-Q for further details.

Previous wording

During the six months ended June 30, 2026, net cash and cash equivalents provided by operating activities was $947 million, which consisted of consolidated net loss of $433 million, adjusted by non-cash charges of $715 million and net cash inflows from the change in net operating assets and liabilities of $665 million. The non-cash charges were primarily comprised of stock-based compensation expense of $557 million and depreciation and amortization expense of $126 million. The net cash and cash equivalents inflow from the change in our net operating assets and liabilities was primarily due to a $407 million decrease in accounts receivable due to the timing of collection of prior period bookings and a $401 million increase in deferred revenue, primarily due to bookings generated in the current period. The overall increase was offset by a $75 million decrease in our developer exchange liability, primarily driven by the timing of payments, and a $72 million decrease in our operating lease liabilities, driven by lease payments.

Current wording

During the nine months ended September 30, 2026, net cash and cash equivalents provided by operating activities was $1,342 million, which consisted of consolidated net loss of $663 million, adjusted by non-cash charges of $1,102 million and net cash inflows from the change in net operating assets and liabilities of $903 million. The non-cash charges were primarily comprised of stock-based compensation expense of $855 million and depreciation and amortization expense of $193 million. The net cash and cash equivalents inflow from the change in our net operating assets and liabilities was primarily due to a $533 million increase in deferred revenue, primarily due to bookings generated in the current period, and a $410 million decrease in accounts receivable due to the timing of collection of prior period bookings. The overall increase was partially offset by a $52 million decrease in our developer exchange liability, primarily driven by the timing of payments, and a $109 million decrease in our operating lease liabilities, driven by lease payments.

Previous wording

During the six months ended June 30, 2026, net cash and cash equivalents used in investing activities was $817 million, primarily consisting of $757 million of investment purchases – net of sales and maturities, and capital expenditures of $55 million.

Current wording

During the nine months ended September 30, 2026, net cash and cash equivalents used in investing activities was $923 million, primarily consisting of $833 million of investment purchases – net of sales and maturities, and capital expenditures of $83 million.

Previous wording

During the six months ended June 30, 2026, net cash and cash equivalents used in financing activities was $341 million, driven by settled repurchases of common stock of $375 million, partially offset by proceeds from the exercise of stock options and purchase of shares under our employee stock purchase plan of $34 million.

Current wording

During the nine months ended September 30, 2026, net cash and cash equivalents used in financing activities was $531 million, driven by settled repurchases of common stock of $576 million, partially offset by proceeds from the exercise of stock options and purchase of shares under our employee stock purchase plan of $45 million.

Previous wording

We have letters of credit primarily in connection with our office facilities in San Mateo, California and data center facilities in Ashburn, Virginia and Chicago, Illinois which are not reflected in our condensed consolidated balance sheets as of June 30, 2026 and December 31, 2025. There have been no material changes to our letters of credit during the six months ended June 30, 2026. 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

We have letters of credit primarily in connection with our office facilities in San Mateo, California and data center facilities in Ashburn, Virginia as of September 30, 2026, as well as data center facilities in Chicago, Illinois as of December 31, 2025, which are not reflected in our respective condensed consolidated balance sheets. There have been no material changes to our letters of credit during the nine months ended September 30, 2026. 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, 2026, 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, 2026, 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 our purchase obligations during the six months ended June 30, 2026, other than for non-cancellable obligations primarily related to data center hosting providers, software vendors, and payment processors in the ordinary course of business. Refer to Note 8, “Commitments and Contingencies” in the notes to condensed consolidated financial statements for additional information regarding our contractual commitments.

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 our purchase obligations during the nine months ended September 30, 2026, other than for non-cancellable obligations primarily related to data center hosting providers, software vendors, and payment processors in the ordinary course of business. Refer to Note 8, “Commitments and Contingencies” in the notes to condensed consolidated financial statements for additional information regarding our contractual commitments.

Previous wording

We are and, from time to time may in the future become, involved in legal proceedings, claims, and litigation. Discussion of legal matters and contingencies can be referred to under Item 1, “Note 8 – Commitments and Contingencies – Legal Proceedings” to the condensed consolidated financial statements.

Current wording

We are and, from time to time may in the future become, involved in legal proceedings, claims, and litigation. Discussion of legal matters and contingencies can be referred to under Note 8, “Commitments and Contingencies – Legal Proceedings” to the condensed consolidated financial statements.