Shares of Roblox closed up 42.2% on Tuesday, a day after the video game company reported strong third-quarter financial results.
Investors seem impressed with the company’s strong October results, rather than the full third quarter ended Sept. 30, as it could indicate what’s ahead for the fourth quarter.
“Historically, October has been the smallest month of 4Q, providing further confidence around our 4Q assumptions,” Stifel analysts wrote in a note Monday.
Roblox said average daily active users increased 43% year over year during the first 27 days of October. The company also reported strong engagement during that period. The game was offline between Oct. 28 and Oct. 31, however.
Still, Roblox beat Wall Street expectations when it came to revenue, or bookings.
Roblox reported bookings of $637.8 million, up 28% year over year, compared wit an estimated $636.5 million. Revenue excluding deferred revenue came in at $509.3 million, up 102% year over year.
Roblox had more than 47.3 million average daily active users in the third quarter, up 31% year over year and up from 43.2 million in the second quarter.
“It’s clear that even as users revert back to pre-pandemic routines and behaviors, Roblox remains an important part of their day,” executives wrote in a letter to shareholders.
— CNBC’s Jordan Novet and Michael Bloom contributed to this report.