Cover Page - USD ($) $ in Billions	12 Months Ended
Cover Page - USD ($) $ in Billions	Dec. 31, 2021	Feb. 17, 2022	Jun. 30, 2021
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Entity File Number	001-04321
Entity Registrant Name	ROBLOX Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-0991664
Entity Address, Address Line One	970 Park Place
Entity Address, City or Town	San Mateo
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94403
City Area Code	888
Local Phone Number	858-2569
Title of 12(b) Security	Class A common stock, par value of $0.0001 per share
Trading Symbol	RBLX
Security Exchange Name	NYSE
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	false
Entity Shell Company	false
Entity Public Float			$ 36.9
Documents Incorporated by Reference	DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrants’ definitive proxy statement relating to its 2022 annual meeting of shareholders, or the “2022 Proxy Statement”, are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. The 2022 Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.
Entity Central Index Key	0001315098
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Amendment Flag	false
Document Period End Date	Dec. 31, 2021
Common Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		536,422,071
Common Class B
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		51,337,302

Audit Information	12 Months Ended
Audit Information	Dec. 31, 2021
Auditor Information [Abstract]
Auditor Name	DELOITTE & TOUCHE LLP
Auditor Location	San Jose, California
Auditor Firm ID	34

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 3,004,300	$ 893,943
Accounts receivable—net of allowances	307,349	246,986
Prepaid expenses and other current assets	32,091	26,274
Deferred cost of revenue, current portion	406,025	256,928
Total current assets	3,749,765	1,424,131
Property and equipment—net	271,352	206,415
Operating lease right-of-use assets	221,285	0
Deferred cost of revenue, long-term	137,524	113,793
Intangible assets, net	59,666	42,326
Goodwill	118,071	59,568
Other assets	2,933	1,567
Total assets	4,560,596	1,847,800
Current liabilities:
Accounts payable	64,395	12,012
Accrued expenses and other current liabilities	180,769	65,392
Developer exchange liability	163,906	80,912
Deferred revenue—current portion	1,758,022	1,070,230
Total current liabilities	2,167,092	1,228,546
Deferred revenue—net of current portion	616,834	484,699
Operating lease liabilities	194,616	0
Long-term debt, net	987,723	0
Other long-term liabilities	1,408	22,109
Total liabilities	3,967,673	1,735,354
Commitments and contingencies (Note 9)
Stockholders’ Equity (Deficit)
Convertible referred stock issued, value	0	344,827
Common stock issued, value	58	20
Additional paid-in capital	1,568,638	239,792
Accumulated other comprehensive income	62	90
Accumulated deficit	(983,941)	(492,290)
Total Roblox Corporation stockholders’ equity/(deficit)	584,817	(252,388)
Noncontrolling interests	8,106	20,007
Total stockholders’ equity/(deficit)	592,923	(232,381)
Total liabilities, convertible preferred stock, and stockholders’ equity/(deficit)	$ 4,560,596	$ 1,847,800

Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Convertible preferred stock, shares authorized (in shares)	361,744	349,522
Convertible referred stock, shares outstanding (in shares)	349,124	337,235
Convertible preferred stock, aggregate liquidation preference	$ 870,654	$ 335,654
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	5,000,000	740,000
Common stock, shares issued (in shares)	585,878	201,327
Common stock, shares outstanding (in shares)	585,878	201,327
Convertible Preferred Stock outstanding
Convertible preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, shares authorized (in shares)	0	349,522
Convertible preferred stock, shares issued (in shares)	0	337,235
Convertible referred stock, shares outstanding (in shares)	0	337,235
Convertible preferred stock, aggregate liquidation preference	$ 0	$ 335,654
Common Class A
Common stock, shares authorized (in shares)	4,935,000	675,000
Common stock, shares issued (in shares)	534,541	144,039
Common stock, shares outstanding (in shares)	534,541	144,039
Common Class B
Common stock, shares authorized (in shares)	65,000	65,000
Common stock, shares issued (in shares)	51,337	57,287
Common stock, shares outstanding (in shares)	51,337	57,287

Consolidated Statements of Operations - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2021

Dec. 31, 2020

Dec. 31, 2019

Income Statement [Abstract]

Revenue

$ 1,919,181

$ 923,885

$ 508,393

Cost and expenses:

Cost of revenue

^[1]

496,870

239,898

122,381

Developer exchange fees

538,321

328,740

111,976

Infrastructure and trust & safety

456,498

264,226

156,699

Research and development

533,207

201,433

107,095

General and administrative

303,020

97,341

41,945

Sales and marketing

86,363

58,384

44,737

Total cost and expenses

2,414,279

1,190,022

584,833

Loss from operations

(495,098)

(266,137)

(76,440)

Interest income

92

1,822

6,546

Interest expense

(6,998)

0

Other income/(expense), net

(1,796)

(32)

(1,211)

Loss before income taxes

(503,800)

(264,347)

(71,105)

Provision for/(benefit from) income taxes

(320)

(6,656)

9

Consolidated net loss

(503,480)

(257,691)

(71,114)

Net loss attributable to the noncontrolling interest

(11,829)

(4,437)

(146)

Net loss attributable to common stockholders

$ (491,651)

$ (253,254)

$ (70,968)

Net loss per share attributable to common stockholders, basic (in dollars per share)

$ (0.97)

$ (1.39)

$ (0.44)

Net loss per share attributable to common stockholders, diluted (in dollars per share)

$ (0.97)

$ (1.39)

$ (0.44)

Weighted-average shares used in computing net loss per share attributable to common stockholders—basic (in shares)

505,858,000

182,108,000

163,051,000

Weighted-average shares used in computing net loss per share attributable to common stockholders—diluted (in shares)

505,858,000

182,108,000

163,051,000

[1]	Depreciation of servers and infrastructure equipment included in infrastructure and trust & safety.

Consolidated Statements of Comprehensive Income/(Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Consolidated net loss	$ (503,480)	$ (257,691)	$ (71,114)
Other comprehensive income/(loss):
Foreign currency translation adjustments	(55)	168	12
Net change in unrealized gains (losses) on available-for-sale marketable securities, net of tax	0	(33)	41
Other comprehensive income/(loss), net of tax	(55)	135	53
Total comprehensive loss including noncontrolling interests	(503,535)	(257,556)	(71,061)
Less: net loss attributable to noncontrolling interests	(11,829)	(4,437)	(146)
Less: cumulative translation adjustments attributable to noncontrolling interests	(27)	84	6
Total comprehensive loss attributable to noncontrolling interests	(11,856)	(4,353)	(140)
Total comprehensive loss attributable to common stockholders	$ (491,679)	$ (253,203)	$ (70,921)

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity/(Deficit) - USD ($)
shares in Thousands, $ in Thousands

Total

Series A Preferred Stock

Series D Preferred Stock

Convertible Preferred Stock

Series D One Warrants

Convertible Preferred Stock

Series G Preferred Stock

Convertible Preferred Stock

Series A Preferred Stock

Convertible Preferred Stock

Series D Preferred Stock

Convertible Preferred Stock

Series H Preferred Stock

Class A and Class B Common Stock

Series A Preferred Stock

Class A and Class B Common Stock

Series D Preferred Stock

Additional Paid-In Capital

Series A Preferred Stock

Additional Paid-In Capital

Series D Preferred Stock

Accumulated Other Comprehensive (Loss) Income

Accumulated Deficit

Non- controlling Interest

Beginning balance (in shares) at Dec. 31, 2018

324,304

Beginning balance at Dec. 31, 2018

$ 187,191

Ending balance (in shares) at Dec. 31, 2019

324,304

Ending balance at Dec. 31, 2019

$ 187,191

Balance beginning (Shares) at Dec. 31, 2018

157,873

Balance beginning at Dec. 31, 2018

$ (113,189)

$ 16

$ 54,871

$ (8)

$ (168,068)

$ 0

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercises of stock option (in shares)

8,895

Issuance of common stock upon exercises of stock options

$ 3,185

$ 1

3,184

0

Stock- based compensation

17,634

Others

41

Cumulative translation adjustments

12

6

Capital contribution from minority interest holder

50,000

25,500

24,500

Net loss

(71,114)

(70,968)

(146)

Issuance of warrants in connection with intangible asset purchase

482

Balance ending (Shares) at Dec. 31, 2019

166,768

Balance ending at Dec. 31, 2019

$ (112,949)

$ 17

101,671

39

(239,036)

24,360

Increase (Decrease) in Temporary Equity [Roll Forward]

Issuance of preferred stock (in shares)

23,645

Issuance of preferred stock

$ 149,669

Issuance of Series D-1 warrants upon exercise of warrants for cash (in shares)

^[1]

1,573

Issuance of Series D-1 warrants upon exercise of warrants for cash

^[1]

$ 8,225

Conversion of preferred stock to common stock (in shares)

(11,642)

(645)

Conversion of preferred stock to common stock

$ (233)

$ (25)

Ending balance (in shares) at Dec. 31, 2020

337,235

Ending balance at Dec. 31, 2020

$ 344,827

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercises of stock option (in shares)

20,590

Issuance of common stock in connection with the acquisition of a business (in shares)

933

Issuance of common stock in connection with the acquisition of a business

$ 35,203

35,203

Conversion of convertible preferred stock to common stock in connection with the direct listing (in shares)

11,642

645

Conversion of convertible preferred stock to common stock in connection with the direct listing

$ 233

$ 25

$ 1

$ 0

$ 232

$ 25

Stock- based compensation

79,158

Others

(33)

0

Cumulative translation adjustments

168

84

Net loss

(257,691)

(253,254)

(4,437)

Issuance of common stock upon exercise of stock options and settlement of RSUs (in shares)

20,871

Issuance of common stock from asset purchase (in shares)

80

Issuance of common stock from asset purchase

2,854

Issuance of restricted stock awards granted in conjunction with a business combination (in shares)

388

Issuance of restricted stock awards granted in conjunction with a business combination

5,493

Balance ending (Shares) at Dec. 31, 2020

201,327

Balance ending at Dec. 31, 2020

$ (232,381)

$ 20

239,792

90

(492,290)

20,007

Increase (Decrease) in Temporary Equity [Roll Forward]

Issuance of preferred stock (in shares)

11,889

Issuance of preferred stock

$ 534,286

Conversion of preferred stock to common stock (in shares)

(349,124)

Conversion of preferred stock to common stock

$ (879,113)

Ending balance (in shares) at Dec. 31, 2021

349,124

0

Ending balance at Dec. 31, 2021

$ 0

Increase (Decrease) in Stockholders' Equity [Roll Forward]

Issuance of common stock upon exercises of stock option (in shares)

33,373

33,372

Issuance of common stock upon exercises of stock options

$ 65,242

$ 3

65,284

(45)

Issuance of common stock in connection with the acquisition of a business (in shares)

487

Issuance of common stock in connection with the acquisition of a business

31,274

Issuance of common stock under Employee Stock Purchase Plan (in shares)

191

Issuance of common stock under Employee Stock Purchase Plan

11,268

Conversion of convertible preferred stock to common stock in connection with the direct listing (in shares)

349,124

Conversion of convertible preferred stock to common stock in connection with the direct listing

879,113

$ 35

879,078

Stock- based compensation

341,942

Release of restricted stock units (in shares)

1,376

Others (in shares)

1

Others

0

Cumulative translation adjustments

(55)

(28)

(27)

Net loss

(503,480)

(491,651)

(11,829)

Issuance of common stock upon exercise of stock options and settlement of RSUs

15,158

$ 2

15,156

Balance ending (Shares) at Dec. 31, 2021

585,878

Balance ending at Dec. 31, 2021

$ 592,923

$ 58

$ 1,568,638

$ 62

$ (983,941)

$ 8,106

[1]	Exercise of warrants for gross proceeds of $0.1 million and a reclassification of warrant liability fair market value of $8.1 million as of the exercise date

Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity/(Deficit) (Parenthetical) $ in Millions	12 Months Ended
	Dec. 31, 2020 USD ($)
Statement of Stockholders' Equity [Abstract]
Proceeds from exercise of warrants	$ 0.1
Reclassification of warrant liability fair market value	$ 8.1

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Consolidated net loss	$ (503,480)	$ (257,691)	$ (71,114)
Adjustments to reconcile net loss including noncontrolling interests to net cash provided by operations:
Depreciation and amortization	75,622	43,808	27,664
Stock-based compensation expense	341,942	79,158	17,634
Change in fair value of warrants	0	1,890	1,190
Operating lease non-cash expense	43,794	0	0
Other non-cash charges/(credits)	680	1,139	(693)
Amortization of debt issuance costs	216	0	0
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable	(61,044)	(156,865)	(40,092)
Accounts payable	23,369	4,488	(113)
Prepaid expenses and other current assets	(13,593)	(4,826)	(10,268)
Other assets	(1,367)	1,373	339
Developer exchange liability	82,994	49,905	12,897
Accrued expenses and other current liabilities	58,809	30,906	10,719
Other long-term liability	(1,189)	(4,460)	11,415
Operating lease liabilities	(34,743)	0	0
Deferred revenue	819,927	965,919	187,916
Deferred cost of revenue	(172,828)	(230,404)	(48,309)
Net cash provided by operating activities	659,109	524,340	99,185
Cash flows from investing activities:
Acquisition of property and equipment	(93,273)	(104,153)	(83,264)
Payments related to business combination, net of cash acquired	(45,692)	(40,919)	0
Purchases of short-term investments	0	(5,991)	(89,601)
Maturities of short-term investments	0	63,000	90,000
Purchases of intangible assets	(7,856)	(8,967)	(1,465)
Net cash used in investing activities	(146,821)	(97,030)	(84,330)
Cash flows from financing activities:
Proceeds from issuance of preferred stock for warrant exercises	0	147	0
Proceeds from issuance of common stock	76,177	15,156	3,112
Net proceeds from issuance of preferred stock	534,286	149,669	0
Capital contribution from noncontrolling interest holder	0	0	50,000
Proceeds from 2030 Notes	990,000	0	0
Payment of debt issuance cost	(2,339)	0	0
Net cash provided by financing activities	1,598,124	164,972	53,112
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(55)	168	12
Net increase in cash, cash equivalents and restricted cash	2,110,357	592,450	67,979
Cash, cash equivalents, and restricted cash
Beginning balance	893,943	301,493	233,514
Ending balance	3,004,300	893,943	301,493
Supplemental disclosure of cash flow information:
Cash paid for interest	0	0	0
Cash paid for income taxes	0	0	0
Supplemental disclosure of noncash investing and financing activities:
Property and equipment additions in accounts payable and accrued expenses	50,388	13,990	12,169
Fair value of common stock and unregistered restricted units issued as consideration for business combination	31,274	40,696	0
Fair value of common stock issued in exchange for intangible asset purchase	0	2,854	0
Conversion of convertible preferred stock to common stock upon direct listing	879,113	0	0
Unpaid debt issuance costs	$ 154	$ 0	$ 0

Overview and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Overview and Summary of Significant Accounting Policies

Organization and Description of Business—Roblox Corporation, or the Company, was incorporated under the laws of the state of Delaware in March 2004. The Company operates a human co-experience platform, or the Platform, or Roblox Platform, where users interact with each other to explore and develop immersive, user-generated, 3D experiences. Upon signing up for Roblox, a user personalizes their unique Roblox identity, or avatar. Users are then free to immerse themselves in experiences on Roblox and can acquire experience-specific enhancements or avatar items in the Company’s Avatar Marketplace using the virtual currency, or Robux. Any user can be a developer or creator on the Company’s platform using Roblox’s studio of software tools. Developers build the experiences that are published on Roblox and can earn Robux through microtransactions in their experiences, through engagement-based payouts, and by selling virtual items in the Roblox virtual economy.

Direct Listing—On March 10, 2021, the Company completed a direct listing of its Class A common stock (“Direct Listing”) on the New York Stock Exchange (“NYSE”). The Company incurred fees primarily related to financial advisory service, audit and legal expenses, in connection with the Direct Listing and recorded general and administrative expenses of $50.7 million during the first quarter of the fiscal year ended March 31, 2021. Immediately prior to the Direct Listing, all shares of outstanding convertible preferred stock were converted into an equivalent number of shares of Class A common stock.

Basis of Presentation and Summary of Significant Accounting Policies

Fiscal Year—The Company’s fiscal year ends on December 31. For example, references to fiscal 2021, 2020 and 2019 refer to the fiscal year ending December 31, 2021, December 31, 2020, and December 31, 2019, respectively.

Basis of Presentation—The accompanying consolidated financial statements have been prepared in accordance with GAAP, and applicable rules and regulations of the SEC.

Certain prior period balances have been reclassified in the accompanying consolidated financial statements to conform to the current year presentation. These reclassifications are not material and had no effect on the prior year's net loss or accumulated deficit.

Principles of Consolidation—The consolidated financial statements include the accounts of the Company and subsidiaries over which the Company has control. All intercompany transactions and balances have been eliminated. The consolidated financial statements include 100% of the accounts of wholly owned and majority owned subsidiaries, and the ownership interest of minority investors is recorded as noncontrolling interest.

Use of Estimates—The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, the estimated period of time the virtual items are available to the user and the estimated amount of consumable and durable virtual items purchased for which the Company lacks specific information that we use for revenue recognition, useful lives of property and equipment and intangible assets, valuation of acquired goodwill and intangible assets, accrued liabilities (including accrued developer exchange fees), contingent liabilities, valuation of deferred tax assets and liabilities, stock-based compensation, the carrying value of operating lease right-of-use assets, evaluation of recoverability of long-lived assets and carrying value of goodwill. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. Actual results could differ from those estimates and any such differences may be material to the consolidated financial statements. To the extent that there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.

The novel coronavirus, or COVID-19, pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions. The full extent to which the COVID-19 pandemic will directly or indirectly impact the global economy, the lasting social effects, and impact on the Company’s business, results of operations, and financial condition will depend on future developments, such as COVID-19 vaccination rates and the availability of COVID-19 vaccines both globally and in the U.S., and the emergence of new strains of the virus, that are highly uncertain and cannot be accurately predicted. As of the date of issuance of the consolidated financial statements, the Company is not aware of any specific event of circumstance related to COVID-19 that would require it to update its estimates or judgments or adjust the carrying value of its assets or liabilities. As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods.

Foreign Currency Transactions—The functional currency of the Company’s international subsidiaries is the U.S. dollar, with the exception of a Chinese subsidiary wholly owned by Roblox China Holding Corp., as discussed in Note 14, “Joint Venture” to the Notes to Consolidated Financial Statements. Assets and liabilities are translated to U.S. dollars at the period-end exchange rate. Revenues and expenses are translated using the average exchange rate for the period. The effects of foreign currency translation are included in stockholders’ deficit as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets and periodic movements are summarized as a line item in the consolidated statements of comprehensive loss.

Stock Split—On January 31, 2020, the Company’s board of directors approved an amendment to its certificate of incorporation to effect a split of shares of the issued and outstanding common stock and convertible preferred stock at a 2-for-1 ratio. The stock split was approved by the Company’s stockholders and effected on January 31, 2020.

All issued and outstanding shares of common stock and convertible preferred stock, dividend rates, conversion rates, options to purchase common stock, exercise prices, and the related per-share amounts contained in these consolidated financial statements have been adjusted to reflect these stock splits for all periods presented.

Segments—The Company operates as a single operating and reportable segment, which is at the consolidated entity level. The chief operating decision maker or CODM of the Company is its CEO, who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated information of our revenue.

Revenue Recognition

Revenue Recognition Policy

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when control of the service is transferred to the customer. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for these services. To achieve the core principle of this standard, the Company determines revenue recognition by:

•identifying the contract, or contracts, with the customer;

•identifying the performance obligations in the contract;

•determining the transaction price;

•allocating the transaction price to performance obligations in the contract; and

•recognizing revenue when, or as, the Company satisfies performance obligations by transferring the promised services.

The Company derives substantially all of its revenue from the sale of virtual items on the Roblox Platform.

Roblox Platform

The Company operates the Roblox Platform as live services that allow users to play and socialize with others for free. Within the experience, however, users can purchase virtual currency (Robux) to obtain virtual items to enhance their social experience. Proceeds from the sale of Robux are initially recorded in deferred revenue and recognized as revenues as a user purchases and uses virtual items. The Company’s identified performance obligation is to provide users with the ability to acquire, use, and hold virtual items on the Roblox Platform over the estimated period of time the virtual items are available to the user or until the virtual items are consumed.

Users can purchase Robux, as one-time purchases or through monthly subscriptions via mobile payments, credit cards, or prepaid cards. Payments from users are non-refundable and relate to non-cancellable contracts for a fixed price that specify Company’s obligations. Revenue is recorded net of taxes, assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between the Company and its users, and estimated chargebacks. Such payments are initially recorded to deferred revenue.

The satisfaction of Company’s performance obligation is dependent on the nature of the virtual item purchased and as a result, the Company categorizes its virtual items as either consumable or durable.

•Consumable virtual items represent items that can be consumed by a specific user action. Common characteristics of consumable virtual items may include items that are no longer displayed on the user’s inventory after a short period of time or do not provide the user any continuing benefit following consumption. For the sale of consumable virtual items the Company recognizes revenue as the items are consumed.

•Durable virtual items represent items which result in a persistent change to a users’ character or item set (e.g., virtual hat, pet, or house). These items are generally available to the customer to hold, use, or display for as long as they are on the Roblox Platform. The Company recognizes revenue from the sale of durable virtual items ratably over the estimated period of time the items are available to the user which is estimated as the average lifetime of a paying user.

To separately account for consumable and durable virtual items, the Company specifically identifies each purchase for the majority of virtual items purchased on the Roblox Platform. For the remaining population, the Company estimates the amount of consumable and durable virtual items purchased based on data from specifically identified purchases and the expected behavior of the users within similar experiences. The estimation of amount of consumable and durable virtual items purchased for the population of purchases not specifically identified, requires management’s judgement as it requires the Company to evaluate and estimate the expected behavior of users in the population using information from known purchases in similar experiences.

The average lifetime of a paying user estimate is calculated based on historical monthly retention data for each user cohort to project future participation on the Roblox Platform and is currently estimated to be 23 months. Determining the estimated average lifetime of a paying user requires management’s judgment as it requires the Company to analyze the most recent trends in player cohort activity and other qualitative factors to estimate the average lifetime of a paying user. The Company also considers results from prior analyses in determining the estimated average lifetime of a paying user. The Company believes this estimate is the best representation of the average life of the durable virtual items.

Principal Agent Considerations

The Company evaluates the sales of Robux via third-party payment processors to determine whether its revenues should be reported gross or net of fees either retained by the payment processor or paid to the developers and creators (Developer Exchange Fees). The Company is the principal in the transaction with the end user as a result of controlling, hosting, and integrating the delivery of the virtual items to the end user. The Company records revenue gross as a principal and records fees paid to payment processors and Developer Exchange Fees as an expense.

Other Revenue

Other revenue primarily consists of revenue from advertising, licenses, and royalties. The Company recognizes revenue based on the performance obligations of the underlying agreements, in an amount that reflects the consideration that the Company expects to be entitled to.

Refer to Note 2, “Revenue from Contracts with Customers” to the Notes to Consolidated Financial Statements for more information, including disaggregation of revenue, contract balances, and changes in deferred revenue during the period.

Cost of Revenue—Cost of revenue primarily consists of payment processing fees charged by various distribution channels.

Deferred Cost of Revenue—The Company defers contract costs that are direct and incremental to obtaining user contracts (i.e., sale of Robux). Deferred cost of revenue primarily consists of payment processing fees charged by third-party payment processors. Payment processing fees for initial contracts are commensurate with subsequent sales, and as a result, are amortized over the estimated period of time the virtual items are available to the user on the Roblox Platform (based on the nature of the virtual item as either consumable or durable) in proportion to the revenue recognized. The Company classifies deferred cost of revenue as short-term or long-term based on when the Company expects to recognize the expense. Short-term and long-term deferred cost of revenue are included on the Company’s consolidated balance sheets. Deferred cost of revenue are periodically reviewed for impairment.

Concentration of Credit Risk and Significant Customers—Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivables. Cash and cash equivalents are deposited with high quality financial institutions and may, at times, exceed federally insured limits. Management believes that the financial institutions that hold the Company’s deposits are financially credit worthy and, accordingly, minimal credit risk exists with respect to those balances. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal interest rate risk.

The Company provides credit, in the normal course of business, to various customers, performs ongoing credit evaluations of its customers, and maintains allowances for potential credit losses on customers’ accounts when deemed necessary. The Company has not experienced any material credit losses to date.

The Company uses various distribution channels to collect and remit payments from users. As of December 31, 2021, 2020, and 2019, two distribution channels accounted for 54%, 50%, and 56% of our accounts receivable, respectively. One distribution channel accounted for 19%, 25%, and 28%, of our accounts receivable as of December 31, 2021, 2020, and 2019, respectively. A second distribution channel accounted for 35%, 25%, and 28% of our accounts receivable as of December 31, 2021, 2020, and 2019, respectively.

One distribution channel processed 35%, 35% and 30%, of our overall revenue transactions for the years ended December 31, 2021, 2020, and 2019, respectively. A second distribution channel processed 19%, 19% and 18%, of our overall revenue transactions for the years ended December 31, 2021, 2020, and 2019, respectively.

Fair Value Hierarchy—Assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity, associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1—Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Cash, Cash Equivalents and Restricted Cash—Cash and cash equivalents primarily consisted of cash in hand, money market instruments, and U.S. Treasuries with maturities of 90 days or less from the date of purchase.

Restricted cash consists of cash deposited with financial institutions as collateral for the Company’s obligations under its facility leases. These restricted cash balances have been excluded from our cash and cash equivalents balance and are classified as restricted cash on our consolidated balance sheets. As of December 31, 2021, and 2020, there was no restricted cash balance.

Short-Term Investments—The Company determines the appropriate classification of its investments at the time of purchase and reevaluates such determination at each balance sheet date based on their maturities and the Company’s reasonable expectation with regard to those securities (i.e., expectations of sales and redemptions). Based on our intentions regarding our short-term investments, all short-term investments are classified as available-for-sale and are reported at fair value, which is based on quoted market prices for such securities, if available, or based on quoted market prices of financial instruments with similar characteristics. Unrealized gains and losses recorded as a separate component of other comprehensive loss, net of income taxes. The Company periodically reviews whether its securities may be other-than-temporarily impaired, including whether or not (i) the Company has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If one of these factors is met, the Company will record an impairment loss associated with its impaired investment. Realized gains and losses and other-than-temporary impairments, if any, on available-for-sale securities are recognized upon sale and are included in other expense, net in the consolidated statements of operations. The Company had no short-term investments as of December 31, 2021 and December 31, 2020.

Accounts Receivable and Related Allowance—Accounts receivable represent amounts due to us based on contractual obligations with our customers. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations, it records a specific allowance as a reduction to the accounts receivable balance to reduce it to its net realizable value. In addition, the Company holds a reserve for chargebacks based on historical data and current trends and projections. Specific allowances and chargeback reserves have not been material for any of the period presented.

Property and Equipment—Net—Property and equipment are recorded at historical cost less accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight line basis over the estimated useful lives of the respective assets. Repair and maintenance costs are expensed as incurred. The estimated useful life for each asset category is as follows:


Property and Equipment			Estimated Useful Life
Servers and related equipment			5 years
Computer hardware and software			2 - 5 years
Furniture and fixtures			2 years
Leasehold improvements			Shorter of 10 years or life of lease

Goodwill and Intangible Assets—Goodwill is not amortized but rather tested for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination and is allocated to reporting units expected to benefit from the business combination. The Company has determined that it has one operating segment and one reporting unit. The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the Company determines that as a result of the qualitative assessment that it is more likely than not (i.e., greater than 50% likelihood) that the fair value of a reporting unit is less than its carrying amount, then the quantitative test is required or it can directly perform the quantitative analysis. Goodwill impairment is recognized when the quantitative assessment results in the carrying value exceeding the fair value, in which case an impairment charge is recorded to the extent the carrying value exceeds the fair value. There were no impairment charges to goodwill during the periods presented.

Intangible assets with finite lives are carried at cost, less accumulated amortization. Intangible assets are amortized on a straight-line basis over the estimated useful life of up to five years. Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization.

Business Combinations and Asset Acquisitions —The Company applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction is accounted for as an asset acquisition or business combination. When the Company acquires a business, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated respective fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The Company’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. In addition, unanticipated events and circumstances may occur that may affect the accuracy or validity of such estimates. As a result, during the measurement period, which may be up to one year following the acquisition date, if new information is obtained about facts and circumstances that existed as of the acquisition date, the Company may record adjustments to the fair value of these assets and liabilities, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded within the accompanying consolidated statements of operations.

The Company accounts for a transaction as an asset acquisition pursuant to the provisions of ASU No. 2017-01, Clarifying the Definition of a Business, when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or otherwise does not meet the definition of a business. Asset acquisition-related costs are capitalized as part of the asset or assets acquired.

Software Development Costs—The Company incurs costs related to developing the Roblox Platform and related support systems. The Company capitalizes development costs when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. Development costs meeting the Company’s capitalization criteria were not material during the periods presented.

Impairment of Long-Lived Assets—The Company periodically evaluates the carrying value of long-lived assets to be held and used when indicators of impairment exist. The carrying value of a long-lived asset to be held and used is considered impaired when the estimated separately identifiable undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the estimated cash flows discounted at a rate commensurate with the risk involved. No impairment charges have been recorded during the periods presented.

Developer Exchange Fees—The Company has established an incentive program for developers and creators to build and operate virtual worlds within the Roblox environment. Developers and creators may charge other users virtual currency to participate in their world. Under certain conditions as outlined in the Developer Exchange Program agreement with developers and creators, such as earning a minimum amount of 100,000 Robux, having a verified account, and an account in good standing; and in compliance with applicable law, these developers and creators can receive a cash payout based on the amount of accumulated earned Robux from other users. The Company records the expense and liability associated with this program on the accompanying consolidated statements of operations and balance sheet, respectively.

Infrastructure and Trust & Safety—Infrastructure and trust & safety consists primarily of expenses related to the operation of our data centers and technical infrastructure in order to deliver our platform to our users. Infrastructure expenses also include personnel costs and allocated overhead for employees and team members whose primary responsibilities relate to supporting our infrastructure and trust & safety initiatives.

Research and Development— Research and development costs are expensed as incurred and consist primarily of personnel costs and allocated overhead.

Stock-Based Compensation—The Company measures and recognizes stock-based compensation expense for all stock-based awards, including stock options, RSAs, RSUs, and PSUs granted to employees, directors, and non-employees, and stock purchase rights granted under the 2020 ESPP to employees, based on the estimated grant date fair value of the awards.

The fair value of each stock option granted and stock purchase right granted under the 2020 ESPP is estimated using the Black-Scholes option-pricing model and is recognized as compensation expense on a straight-line basis over the requisite service period of the awards. The Black-Scholes option pricing model requires certain subjective inputs and assumptions, including the fair value of the Company’s Class A common stock, the expected term, risk-free interest rates, expected stock price volatility, and expected dividend yield of our Class A common stock. The assumptions used to determine the fair value of the option awards represent management’s best estimates. These estimates involve inherent uncertainties and the application of management’s judgment. These assumptions and estimates are as follows:

•Fair value of Class A common stock— Prior to the Direct Listing, the fair value of the shares of Class A common stock underlying the stock options and RSUs has historically been determined by the Company’s board of directors along with management as there was no public market for the underlying common stock. The Company’s board of directors along with management determined the fair value of the Company’s common stock by considering a number of objective and subjective factors including: contemporaneous third-party valuations of its common stock, the valuation of comparable companies, sales of the Company’s common and convertible preferred stock to outside investors in arms-length transactions, the Company’s operating and financial performance, the lack of marketability, and the general and industry specific economic outlook, amongst other factors. After the completion of the Direct listing, the fair value of the Company’s Class A common stock is determined based on the NYSE closing price on the date of grant.

•Expected term—The expected term represents the period stock-based awards are expected to be outstanding. The expected term assumptions are determined based on the vesting terms, estimated exercise behavior, post-vesting cancellations and contractual lives of the awards.

•Risk-free interest rates—The risk-free interest rate is based on the implied yields in effect at the time of the grant of U.S. Treasury notes with terms approximately equal to the expected term of the award.

•Expected stock price volatility— Prior to the Direct Listing, the Company used the historical volatility of the Class A common stock price of similar publicly-traded peer companies. After the completion of the Direct Listing the Company continues to use the historical volatility of the stock price of similar publicly traded peer companies since it has not established sufficient public trading history.

•Expected dividend yield—The Company utilized a dividend yield of zero, as it had no history or plan of declaring dividends on its common stock.

RSUs granted by the Company prior to March 2021, vest upon the satisfaction of both a service-based vesting condition, which is typically four years, and a liquidity event-related performance vesting condition. The liquidity event-related performance vesting condition was satisfied on the Effective Date, and the Company recorded a cumulative stock-based compensation expense as of the Direct Listing date for those RSUs for which the service-based vesting condition has been satisfied. Stock-based compensation related to the remaining service-based period after the liquidity event-related performance vesting condition was satisfied will be recorded over the remaining requisite service period using the accelerated attribution method.

In February 2021, the leadership development and compensation committee of the Company’s board of directors granted the CEO a Long-Term Performance Award (“CEO Long-Term Performance Award”), an RSU award that includes a service and a market condition. The fair value of the CEO Long-Term Performance Award is determined using a Monte Carlo simulation model. The fair value of the common stock underlying the award was determined by the Company’s board of directors along with management by considering a number of objective and subjective factors. The Company estimated the expected term based on the time period from the valuation date to the end of the performance period. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant for zero-coupon U.S. Treasury notes. The expected volatility is derived from the historical stock volatility of selected peers over a period equivalent to the expected term of the CEO Long-Term Performance Award. The associated stock-based compensation is recorded over the derived service period, using the accelerated attribution method. If the stock price goals are met sooner than the derived service period, the Company will adjust the stock-based compensation expense to reflect the cumulative expense associated with the vested portion of the CEO Long-Term Performance Award. Provided that David Baszucki continues to be the CEO of the Company, stock-based compensation expense is recognized over the derived service period, regardless of whether the stock price goals are achieved.

The Company records forfeitures when they occur for all stock-based awards.

Basic and Diluted Net Loss Per Common Share—Basic and diluted net loss per share attributable to common stockholders is computed in conformity with the two-class method required for participating securities. The Company considers all series of its convertible preferred stock to be participating securities as the holders of such stock have the right to receive nonforfeitable dividends on a pari passu basis in the event that a dividend is paid on common stock. Under the two-class method, the net loss attributable to common stockholders is not allocated to the convertible preferred stock as the preferred stockholders do not have a contractual obligation to share in the Company’s losses.

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potentially dilutive common stock equivalents to the extent they are dilutive. For purposes of this calculation, convertible preferred stock, stock options, RSAs, convertible preferred stock warrants, and common stock warrants are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented.

Income Taxes—The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized by applying enacted statutory tax rates applicable to future years to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefit for which the future realization is uncertain.

The tax effects of a position are recognized only if it is more likely than not to be sustained based solely on its technical merits as of the reporting date. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments.

Leases—Effective January 1, 2021, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases (Topic 842)” (“Topic 842”) along with all subsequent ASU clarifications and improvements that are applicable to the Company on January 1, 2021 utilizing the modified retrospective transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated.

The Company leases facilities under non-cancelable operating lease agreements. These leases have varying terms that range from one to 10 years and contain leasehold improvement incentives, rent holidays and escalation clauses. In addition, some of these leases have renewal options for up to five years after expiration of the initial term. The Company determines if an arrangement contains a lease at inception. The Company determines if a contract contains a lease based on whether we have the right to obtain substantially all of the economic benefits from the use of an identified asset and whether we have the right to direct the use of an identified asset in exchange for consideration, which relates to an asset which we do not own.

Operating lease right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term. Operating lease liabilities represent our obligation to make lease payments arising from the lease at the commencement date and are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. Operating lease ROU assets are recognized as the lease liability, adjusted for lease incentives received, initial direct costs and prepayments made.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, or IBR, on a collateralized basis to determine the present value of lease payments. The IBR represents the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The Company utilizes a market-based approach to estimate the IBR. The approach requires significant judgment and therefore, the Company utilizes different data sets to estimate IBRs via an analysis of (i) yields on corporate bond with a credit rating similar to the Company; (ii) yields on our outstanding unsecured debt; and (iii) indicative pricing on both secured and unsecured debt received from potential lenders. The Company is required to reassess the discount rate for any new and modified lease contracts as of the lease effective date. Certain lease agreements include options to renew or terminate the lease, and such options are factored into determination of the lease term and future lease payments when it is reasonably certain that the Company will exercise the option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term.

Variable lease payments are expensed as incurred and are not included within the ROU asset and lease liability calculation. Variable lease payments primarily include reimbursements of costs incurred by lessors for common area maintenance and utilities.

The Company subleases certain real estate under agreements that are classified as operating leases.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company does not account for lease components (e.g., fixed payments including rent) separately from the non-lease components (e.g., common-area maintenance costs). Refer to Note 3, “Leases” to the Notes to Consolidated Financial Statements for more information.

Recent Accounting Pronouncements

JOBS Act Accounting Election

As of the date of our Direct Listing, we were an emerging growth company, as defined in the Jumpstart Our Business Startups (JOBS) Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We chose to use the extended transition period under the JOBS Act for the adoption of certain accounting standards until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. The adoption dates discussed below reflect this election. We ceased being an emerging growth company on December 31, 2021.

Accounting Pronouncements Recently Adopted

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses, Topic 326: Measurement of Credit Losses on Financial Instruments,” which requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected, with further clarifications made more recently regarding the treatment of accrued interest, transfers between classifications for loans and debt securities, recoveries and the option to irrevocably elect the fair value option (on an instrument-by-instrument basis) for eligible financial assets at amortized costs. The new standard requires that an entity measure and recognize expected credit losses for financial assets held at amortized cost and replaces the incurred loss impairment methodology in prior GAAP with a methodology that requires consideration of a broader range of information to estimate credit losses. The Company adopted the guidance during the quarter ended September 30, 2021 on a modified retrospective basis as of January 1, 2021. The adoption of this standard did not result in any cumulative effect adjustment on our consolidated financial statements upon adoption as of January 1, 2021.

In February 2016, the FASB issued ASU No. 2016-02, Topic 842, which amends the existing accounting standards for leases. The new standard requires lessees to record a right-of-use asset and a corresponding lease liability on the balance sheet (with the exception of short-term leases). For lessees, leases will continue to be classified as either operating or financing in the income statement. The Company adopted the guidance on January 1, 2021 utilizing the modified retrospective transition method through a cumulative-effect adjustment at the beginning of the first quarter of 2021. The Company elected the package of practical expedients permitted under the transition guidance, which allowed the Company to carryforward its historical lease classification, assessment on whether a contract was or contains a lease, and initial direct costs for leases that existed prior to January 1, 2021. The Company also elected to combine its lease and non-lease components and not recognize ROU assets and lease liabilities for leases with an initial term of 12 months or less. The Company did not elect to apply the hindsight practical expedient when determining lease term and assessing impairment of ROU assets. See Note 3, “Leases” to the Notes to Consolidated Financial Statements for more information.

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract,” which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new standard requires capitalized costs to be amortized on a straight-line basis generally over the term of the arrangement, and the financial statement presentation for these capitalized costs would be the same as that of the fees related to the hosting arrangements. This new guidance was effective for the Company beginning on January 1, 2021, and did not have a material impact on the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The purpose of ASU 2019-12 is to reduce complexity in the accounting standards for income taxes by removing certain exceptions as well as clarifying certain allocations. This update removed the exception to the incremental approach for intraperiod tax allocation when there is a loss from continuing operation and income or a gain from other items (for example, discontinued operations or other comprehensive income). This update also addresses the split recognition of franchise taxes that are partially based on income between income-based tax and non-income-based tax. This guidance is effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company elected to adopt ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted

None

Revenue from Contracts with Customers

12 Months Ended

Dec. 31, 2021

Disaggregation of Revenue [Abstract]

Revenue from Contracts with Customers

Disaggregation of Revenue

The following table summarizes revenue by region based on the billing country of users (in thousands, except percentages):


	Year Ended December 31,
	2021				2020				2019
	Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount		Percentage of Revenue
United States and Canada (1)	$	1,298,938	68	%	$	638,354	69	%	$	364,114	72	%
Europe	357,656		19		168,303		18		83,271		16
Asia-Pacific, including Australia and New Zealand	145,464		7		70,530		8		37,677		7
Rest of world	117,123		6		46,698		5		23,331		5
Total	$	1,919,181	100	%	$	923,885	100	%	$	508,393	100	%

(1)The Company’s revenues in the U.S. were 63%, 65%, and 67% of consolidated revenues for each of the years ended December 31, 2021, 2020, and 2019, respectively.

No individual country, other than those disclosed above, exceeded 10% of our total revenue for any period presented.

Consumable virtual items accounted for 11%, 13% and 13%, of Roblox Platform revenue in the years ended December 31, 2021, 2020, and 2019, respectively. Durable virtual items accounted for 89%, 87% and 87%, of Roblox Platform revenue in the years ended December 31, 2021, 2020, and 2019, respectively.

Contract Balances and Deferred Revenue

The Company receives payments from its users based on the payment terms established in its contracts. Such payments are initially recorded to deferred revenue and are recognized into revenue as the Company satisfies its performance obligations. Further, payments made by the Company’s users are collected by payment processors and remitted to us generally within 30 days.

Deferred revenue mostly consists of payments we receive from users in advance of revenue recognition. The increase in the deferred revenue balances for the year ended December 31, 2021 was driven by cash payments from users in advance of satisfying our performance obligations, offset by $1,070.1 million of revenue recognized that was included in the current portion deferred revenue balance at the beginning of the period.

As of December 31, 2021, the aggregate amount of revenue allocated to unsatisfied performance obligations is included in our deferred revenue balances. As of December 31, 2021, the Company expects to recognize $1,758.0 million, respectively, as revenue over the next 12 months, and the remainder thereafter.

As mentioned above, the Company bills in advance of our performance obligations and as such, does not have unbilled receivables.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

Adoption of Topic 842

Effective January 1, 2021, the Company adopted Topic 842 utilizing the modified retrospective transition method, which requires a cumulative-effect adjustment, if any, to the opening balance of retained earnings to be recognized on the date of adoption with prior periods not restated. The primary impact for the Company was the balance sheet recognition of operating lease ROU assets and operating lease liabilities. The Company does not have any finance leases.

The following table summarizes the impacts of adopting Topic 842 on the Company’s consolidated balance sheet as of December 31, 2020 (in thousands):


	As Reported Balance as of December 31, 2020		Adjustments due to Topic 842		As Adjusted Balance as of January 1, 2021
Assets
Operating lease right-of-use assets	—		$	195,944	$	195,944
Prepaid expenses and other current assets	26,274		(8,106)		18,168
Total	$	26,274	$	187,838	$	214,112
Liabilities
Accrued expenses and other current liabilities	$	65,392	$	(1,704)	$	63,688
Other long-term liabilities	22,109		(21,983)		126
Operating lease liabilities—short-term	—		32,162		32,162
Operating lease liabilities—long-term	—		179,363		179,363
Total	$	87,501	$	187,838	$	275,339

The Company has operating leases for real estate, and co-located data centers. During the year ended December 31, 2021, operating lease expense was approximately $53.4 million. Variable lease cost, short-term lease cost and sublease income were immaterial during the years ended December 31, 2021. As of December 31, 2021, $51.3 million was included in accrued expenses and other current liabilities and $194.6 million as long-term operating lease liabilities.

The following table presents maturity of lease liabilities under the Company’s non-cancelable operating leases as of December 31, 2021 (in thousands):


2022	$	59,907
2023	54,694
2024	45,598
2025	37,413
2026	27,556
Thereafter	53,299
Total lease payments	$	278,467
Less: interest(1)	32,548
Present value of lease liabilities	$	245,919

(1)Calculated using the interest rate for each lease.

In addition, the Company has executed operating leases for data centers, colocation space and facilities which have not commenced as of December 31, 2021. The legally binding minimum lease payments for these leases is $132.0 million with lease term ranging between three to nine years.

Of the above, approximately $90.0 million pertains to an amendment signed by the Company on June 30, 2021 for its headquarters office lease to include an additional space of approximately 123,000 square feet for a term of 9 years. The possession of this space was obtained in the first quarter of 2022.

The following table presents supplemental information for the year ended December 31, 2021 (in thousands, except for weighted average and percentage data):


Weighted average remaining lease term	5.79
Weighted average discount rate	4.0		%
Cash paid for amounts included in the measurement of lease liabilities(1)	$	52,942
Lease liabilities arising from obtaining new ROU assets	$	70,068

(1)Does not include $9.1 million of leasehold incentives received from the landlord.

ASC 840 Disclosures

Prior to the adoption of Topic 842, future minimum lease payments as of December 31, 2020, which were undiscounted, were as follows (in thousands):


2021	$	51,397
2022	54,477
2023	47,915
2024	38,970
2025	32,223
Thereafter	55,882
Total lease payments	$	280,864

Rent expense for the year ended December 31, 2020 was $42.9 million.

Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments consist of Level 1 assets and Level 2 liabilities. Level 1 assets include highly liquid money market funds that are included in cash and cash equivalents.

There were no transfers of financial assets or liabilities into or out of Level 1, Level 2, or Level 3 during the years ended December 31, 2021 and 2020.

A summary of assets, related to our financial instruments, measured at fair value on a recurring basis, is set forth below (in thousands):


		Fair Value
	Fair Value Hierarchy	December 31,
Financial Instrument		2021		2020
Financial Assets:
Money Market funds classified as cash equivalents	Level 1	$	2,853,055	$	310,392

Financial Liabilities

The Company’s financial liabilities that are not measured at fair value on a recurring basis consist of its 2030 Notes. Refer to Note 8, “Debt” to the Notes to Consolidated Financial Statements for more information.

As of December 31, 2021, the estimated fair value of the 2030 Notes was approximately $1,016.2 million. While the 2030 Notes are recorded at cost, the fair value of the 2030 Notes was determined based on the trading price per $101.62 of the 2030 Notes on the last trading day of the reporting period. The fair value of the 2030 Notes is categorized as a Level 2 measurement as they are not actively traded.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Acquisitions

12 Months Ended

Dec. 31, 2021

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Guilded Acquisition

On August 16, 2021 (“Acquisition Date”), the Company acquired all outstanding equity interests of Guilded, Inc., (“Guilded”), a privately-held company, that operates a communications platform for connecting gaming communities. The acquisition has been accounted for as a business combination. The Acquisition Date fair value of the consideration transferred was $77.6 million, which consisted of $46.3 million paid in cash and 0.5 million shares of Class A common stock with a fair value of $31.3 million. The aggregate purchase consideration for Guilded was comprised of the following (in thousands):


	Fair Value
Cash paid	$	46,285
Common stock issued	22,744
Replacement awards attributable to pre-acquisition service	8,530
Total purchase price	$	77,559

The acquisition-related costs were not material and were recorded as general and administrative expenses in the Company’s consolidated statements of operations for the year ended December 31, 2021.

In connection with the acquisition, the Company entered into a stock-based consideration revesting agreement with the Guilded founder. The portion of the fair value of the common stock associated with pre-acquisition service of the Guilded founder represented a component of the total purchase consideration, as presented above. The remaining fair value of $8.5 million of these issued shares was excluded from the purchase price. These shares, which are subject to the recipients’ continued service with the Company, will be recognized ratably as stock-based compensation expense over the requisite service period of 3 years.

The total purchase consideration of the Guilded acquisition was allocated to the tangible and intangible assets acquired, and liabilities assumed, based upon their respective fair values as of the date of the acquisition. Management determined the preliminary fair values based on a number of factors, including a valuation from an independent third-party valuation firm. The excess of the purchase price over the net assets acquired was recorded as goodwill. Goodwill is attributable to the assembled workforce and anticipated synergies arising from the acquisition. The goodwill recorded in the acquisition is not expected to be deductible for income tax purposes.

The following table summarizes the Company’s preliminary allocation of the purchase consideration based on the fair value of assets acquired and liabilities assumed at the Acquisition Date (in thousands):


	August 16, 2021
Cash and cash equivalents	$	593
Goodwill	58,503
Identified intangible assets	19,600
Deferred tax liabilities	(999)
Accrued expenses and other current liabilities	(138)
Total purchase price	$	77,559

The following table presents details of the identifiable assets acquired at the Acquisition Date (in thousands except estimated useful life):


	Carrying Amount		Estimated Useful Life (Years)
Developed Technology	$	19,100	5
Trade Name	500		5
Total	$	19,600

The Company expects to finalize the allocation of the purchase consideration as soon as practicable, pending finalization of income taxes. The Company currently expects to finalize this allocation during its third quarter ending September 30, 2022.

The acquisition is not material to the Company for the periods presented, and therefore, pro forma information has not been presented.

Other Acquisitions

During the year ended December 31, 2021, the Company completed two individually immaterial acquisitions. These transactions were accounted for as asset acquisitions as they did not meet the definition of a business. The acquired assets consisted entirely of assembled workforce and have a fair value of $8.5 million with an estimated useful life of 3 years. The aggregate purchase consideration consisted of $8.5 million, paid in cash.

Loom.ai Acquisition

On December 11, 2020, the Company acquired Loom.ai, a privately-held company specializing in real-time facial animation technology for 3D avatars using deep learning, computer vision and VFX. The acquisition has been accounted as a business combination. The acquisition date fair value of the consideration transferred was $86.7 million, which consisted of cash and 1.3 million shares of Class A common stock with a fair value of $40.7 million. The aggregate purchase consideration for Loom.ai was comprised of the following (in thousands):


	Fair Value
Cash paid	$	45,998
Common stock issued	35,203
Replacement awards attributable to pre-acquisition service	5,493
Total purchase price	$	86,694

Cash consideration included reimbursement of acquisition-related transaction costs of $0.8 million incurred by Loom.ai to execute the transaction. Additionally, the acquisition-related costs were not material and were recorded as general and administrative expenses in the Company’s consolidated statements of operations for the year ended December 31, 2020.

In connection with the acquisition, the Company entered into stock-based consideration revestment agreements with the Loom.ai founders. The portion of the fair value of the common stock associated with pre-acquisition service of Loom.ai founders represented a component of the total purchase consideration, as presented above. The remaining fair value of $9.2 million of these issued shares was excluded from the purchase price. These shares, which are subject to the recipients’ continued service with the Company, will be recognized ratably as stock-based compensation expense over the requisite service period of 3 years.

The total purchase consideration of the Loom.ai acquisition was allocated to the tangible and intangible assets acquired, and liabilities assumed, based upon their respective fair values as of the date of the acquisition. Management determined the fair values based on a number of factors, including a valuation from an independent third-party valuation firm. The excess of the purchase price over the net assets acquired was recorded as goodwill. Goodwill is attributable to the assembled workforce and anticipated synergies arising from the acquisition. $6.7 million of the goodwill recorded in connection with the acquisition of Loom.ai is deductible for tax purposes.

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):


	December 11, 2020
Cash and cash equivalents	$	5,080
Prepaid expenses and other current assets	45
Goodwill	59,568
Identified intangible asset - developed technology	29,000
Deferred tax liabilities	(6,681)
Accrued expenses and other current liabilities	(318)
Total purchase price	$	86,694

The identifiable intangible assets acquired consisted entirely of existing technology, which has a fair value of $29.0 million and an estimated remaining useful life of 5 years as of December 31, 2020.

The acquisition is not material to the Company for the periods presented, and therefore, pro forma information has not been presented.

Imbellus Acquisition

On November 30, 2020, the Company completed the acquisition of substantially all of the assets from Imbellus, Inc., a privately-held software company, which developed simulation-based cognitive assessments that measure human thought process. The asset acquisition consisted entirely of existing technology, which has a fair value of $11.7 million and an estimated remaining useful life of 5 years as of December 31, 2020. The purchase consideration consisted of 80,000 shares of Class A common stock, with a fair value of $2.9 million and $8.8 million of cash including direct transaction costs.

Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill

Goodwill is recorded when the purchase price of an acquisition exceeds the fair value of the net tangible and identified intangible assets required.

The following table represents the changes to goodwill during the year ended December 31, 2021 (in thousands):


	Carrying Amount
Balance as of December 31, 2020	$	59,568
Addition from acquisition	58,503
Balance as of December 31, 2021	$	118,071

There was no goodwill during the year ended December 31, 2019.

There are no accumulated impairment losses for any period presented.

Intangible Assets

Intangible assets are carried at cost less accumulated amortization.

The following tables present details of the Company’s intangible assets as of December 31, 2021 and December 31, 2020 (in thousands):


	As of December 31, 2021
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets with finite lives
Developed Technology	$	62,059	$	(11,233)	$	50,826
Assembled Workforce	8,500		(708)		7,792
Trade Name	500		(25)		475
Total Intangible Assets	$	71,059	$	(11,966)	$	59,093


	As of December 31, 2020
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Intangible assets with finite lives
Developed Technology	$	42,959	$	(1,206)	$	41,753
Total Intangible Assets	$	42,959	$	(1,206)	$	41,753

The above does not include $0.6 million each of indefinite lived intangible assets as of December 31, 2021 and December 31, 2020.

Amortization expense was $10.8 million, $1.1 million, and zero for the year ended December 31, 2021, 2020, and 2019, respectively.

The expected future amortization expenses related to the intangible assets as of December 31, 2021 were as follows (in thousands):


2022	$	15,249
2023	15,249
2024	14,196
2025	11,786
2026	2,613
Thereafter	—
Total remaining amortization	$	59,093

Other Balance Sheet Components

12 Months Ended

Dec. 31, 2021

Other Balance Sheet Components [Abstract]

Other Balance Sheet Components

Prepaid expenses and other current assets

Prepaid expenses and other current assets consisted of the following (in thousands):


	As of December 31,
	2021		2020
Prepaid Expenses	$	27,671	$	17,606
Other current assets	4,420		8,668
Total prepaid expenses and other current assets	$	32,091	$	26,274

Property and equipment, net

Property and equipment, net, consisted of the following (in thousands):


	As of December 31,
	2021		2020
Servers and related equipment	$	361,227	$	264,994
Computer hardware and software	16,154		3,498
Furniture and fixtures	179		162
Leasehold improvements	30,482		27,437
Construction in progress	16,837		294
Total property and equipment	424,879		296,385
Less accumulated depreciation and amortization	(153,527)		(89,970)
Property and equipment—net	$	271,352	$	206,415

Construction in progress includes costs mostly related to leasehold improvements related to the Company’s office buildings and network equipment infrastructure to support the Company’s data centers.

Depreciation expense was $64.9 million, $42.7 million, and $27.6 million for years ended December 31, 2021, 2020, and 2019, respectively.

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):


	As of December 31,
	2021		2020
General accrued expenses	$	56,134	$	41,699
Short term operating lease liabilities(1)	51,303		—
Accrued interest 2030 Notes	6,781		—
Taxes payable	43,286		19,119
Accrued compensation and other employee related liabilities	14,511		801
Other current liability	8,754		3,773
Total accrued liabilities and other current liabilities	$	180,769	$	65,392

(1)Refer to Note 3, “Leases” to the Notes to Consolidated Financial Statements for more information.

Other long-term liabilities include zero and $21.9 million in deferred rent as of December 31, 2021, and December 31, 2020, respectively.

Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Debt

2030 Notes

Long-term debt consisted of the following (in thousands):


	As of December 31, 2021
2030 Notes
Principal	$	1,000,000
Unamortized issuance costs	12,277
Net carrying amount	$	987,723

On October 29, 2021, the Company issued $1.0 billion aggregate principal amount of its 3.875% Senior Notes due 2030 (the “2030 Notes”). The 2030 Notes mature on May 1, 2030. The 2030 Notes bear interest at a rate of 3.875% per annum. Interest on the 2030 Notes is payable semi-annually in arrears on May 1 and November 1 of each year, commencing on May 1, 2022.

The aggregate proceeds from offering of the 2030 Notes were approximately $987.5 million, after deducting lenders cost and other issuance costs, paid and payable by the Company. The issuance costs of $12.5 million will be amortized into interest expense using the effective interest method over the term of the 2030 Notes.

The Company may voluntarily redeem the 2030 Notes, in whole or in part, under the following circumstances:

(1)at any time prior to November 1, 2024, the Company may on any one or more occasions redeem up to 40% of the aggregate principal amount of the 2030 Notes at a redemption price of 103.875% of the principal amount including accrued and unpaid interest, if any, with the net cash proceeds of certain equity offerings; provided that (1) at least 50% of the aggregate principal amount of 2030 Notes originally issued remains outstanding immediately after the occurrence of such redemption (excluding 2030 Notes held by the Company and its subsidiaries); and (2) the redemption occurs within 180 days of the date of the closing of such equity offering.

(2)on or after November 1, 2024, the Company may redeem all or a part of the 2030 Notes at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption date:


Year	Percentage
2024	101.938	%
2025	100.969	%
2026 and thereafter	100.000	%

(3)at any time prior to November 1, 2024, the Company may redeem all or a part of the 2030 Notes at a redemption price equal to 100% of the principal amount of 2030 Notes redeemed, including accrued and unpaid interest, if any plus the applicable “make-whole” premium set forth in the indenture governing the 2030 Notes (“the Indenture”) as of the date of such redemption.

(4)in connection with any tender offer for the 2030 Notes, including an offer to purchase, if holders of not less than 90% in aggregate principal amount of the outstanding 2030 Notes validly tender and do not withdraw such notes in such tender offer and the Company (or any third party making such a tender offer in lieu of the Company) purchases all of the 2030 Notes validly tendered and not withdrawn by such holders, the Company (or such third party) will have the right, upon not less than 10, but not more than 60 days’ prior notice, given not more than 30 days following such purchase date to the holders of the 2030 Notes and the trustee, to redeem all of the 2030 Notes that remain outstanding following such purchase at a redemption price equal to the price offered to each holder of 2030 Notes (excluding any early tender or incentive fee) in such tender offer plus to the extent not included in the tender offer payment, accrued and unpaid interest, if any.

In certain circumstances involving a change of control triggering event (as defined in the Indenture), the Company will be required to make an offer to repurchase all, or at the holder’s option, any part, of each holder’s 2030 Notes at 101% of the aggregate principal amount, plus accrued and unpaid interest, if any, to the applicable repurchase date.

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 of substantially all of the Company and its subsidiaries’ assets to another person. These covenants are subject to a number of limitations and exceptions set forth in the Indenture.

For the year ended December 31, 2021, the interest expense recognized in the consolidated statements of operations related to the 2030 Notes was as follows (in thousands):


	Year Ended December 31, 2021
Contractual interest expense	$	6,781
Amortization of debt issuance costs	216
Total interest expense	$	6,997

For the year ended December 31, 2021, the debt issuance costs for the 2030 Notes were amortized to interest expense over the term of the 2030 Notes using an annual effective interest rate of 4.05%.

As of December 31, 2021, the Company was in compliance with all of its covenants under the Indenture.

Revolving Line of Credit

In February 2019, the Company entered into an agreement for a revolving line of credit, with maximum borrowings of up to $50.0 million available under the revolving line of credit, due February 2020. Outstanding borrowings under the line of credit bear interest at 1.5% per annum. In February 2020, this credit facility was renewed for a one-year period. The revolving line of credit agreement contained affirmative and negative covenants, including but not limited to maintaining minimum liquidity of $50.0 million at all times and certain limitations on liens and indebtedness. The Company was in compliance with all covenants associated with the revolving line of credit as of December 31, 2020.

In February 2021, the Company terminated its agreement for a $50.0 million revolving line of credit. No amounts had been borrowed under the revolving line of credit.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (h)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
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-Paragraph 1I
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 20
-Section 50
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-Subparagraph (g)
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Paragraph 1C
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
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-Subparagraph (b)
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1I
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-SubTopic 20
-Section 50
-Paragraph 1B
-Subparagraph (i)
-URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611

+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and ContingenciesLease Commitments—The Company leases office facilities and space for data center operations under operating leases expiring in various years through 2031. Certain of these arrangements have free or escalating rent payment provisions and optional renewal clauses. All of the Company’s leases are accounted for as operating leases. Refer Note 3, “Leases” to the Notes to Consolidated Financial Statements for more information.

Purchase Obligations—The non-cancellable contractual purchase obligations, primarily related to the Company’s data center hosting providers and software vendors, as of December 31, 2021, are as follows (in thousands):


	2022		2023		2024		2025		2026		Thereafter		Total
Purchase Obligations	$	16,027	$	17,846	$	5,238	$	854	$	161	$	—	$	40,126

2030 Notes—The future interest and principal payments related to the 2030 Notes, as of December 31, 2021, are as follows (in thousands):


	2022		2023		2024		2025		2026		Thereafter		Total
2030 Notes, including interest	$	39,073	$	38,750	$	38,750	$	38,750	$	38,750	$	1,135,625	$	1,329,698

Letters of Credit—The Company has letters of credit in connection with our operating leases. The Company has not drawn down from the letters of credit and had $9.9 million, and $9.9 million available in aggregate as of December 31, 2021, and 2020, respectively.

Legal Proceedings—The Company is and, from time to time may in the future become, involved in legal proceedings in the ordinary course of business.

On June 9, 2021, a number of entities claiming to own or control the rights to musical compositions, including Universal Music Corp., through a coordinated effort of the National Music Publishers Association, filed a lawsuit against the Company (“NMPA Lawsuit”), in the U.S. District Court for the Central District of California, captioned ABKCO Music, Inc.; Big Machine Music, LLC; Boosey & Hawkes, Inc.; Cherio Corporation; Concord Music Publishing LLC; Concord Music Group, Inc.; Downtown Music Publishing LLC; Hipgnosis SFH I Limited; Hipgnosis Songs Group, LLC; Kobalt Music Publishing America, Inc.; MPL Communications, Inc.; MPL Music Publishing, Inc.; Panther Music Corp.; Peer International Corporation; Peermusic Ltd.; Peermusic III, Ltd.; Polygram Publishing, Inc.; Rodgers & Hammerstein Holdings LLC; Pulse 2.0, LLC; Reservoir Media Management, Inc.; Songs of Peer, Ltd.; Songs of Universal, Inc.; Southern Music Publishing Co., Inc.; Spirit Music Holdings, Inc.; Universal Music – MGB NA LLC; Universal Music – Z Tunes LLC; Universal Music Corp.; Universal Music Publishing, Inc.; Universal Musica, Inc., Plaintiffs v. Roblox Corporation, Defendant, alleging that the Company engaged in copyright infringement by using certain musical compositions on its Platform without necessary licenses. In September 2021, the Company entered into a settlement agreement regarding the NMPA lawsuit which settled the matter between the Company and the Plaintiffs. The cost of the settlement was fully accrued in June 2021 and was subsequently paid in September 2021.

In addition, the Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business.

As of December 31, 2021, the Company has accrued for immaterial losses related to those litigation matters that the Company believes to be probable and for which an amount of loss can be reasonably estimated. The Company considered the progress of these cases, the opinions and views of its legal counsel and outside advisors, its experience and settlements in similar cases, and other factors in arriving at the conclusion that a potential loss was probable. The Company cannot determine a reasonable estimate of the maximum possible loss or range of loss for these matters given that they are at various stages of the litigation process and each case is subject to the inherent uncertainties of litigation. The Company may incur substantial legal fees, which are expensed as incurred, in defending against these legal proceedings. Although the maximum amount of liability that may ultimately result from any of these matters cannot be predicted with absolute certainty and the ultimate resolution of one or more of these matters could ultimately have a material adverse effect on our operations.

Indemnifications—In the ordinary course of business, the Company enters into agreements that may include indemnification provisions. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. To date, the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by Delaware corporate law. The Company also currently has directors’ and officers’ insurance.

Convertible Preferred Stock

12 Months Ended

Dec. 31, 2021

Convertible Preferred Stock [Abstract]

Convertible Preferred Stock

In January 2021, the Company issued 11,888,886 shares of Series H convertible preferred stock to certain institutional accredited investors in a private placement at a purchase price of $45.00 per share for aggregate net proceeds of approximately $534.3 million. There was no underwriter or placement agent used in connection with this sale.

The Company previously issued Series A, Series B, Series C, Series D, Series D-1, Series E, Series F, and Series G prior to 2021. In November 2020, pursuant to a conversion notice and an exchange agreement with entities affiliated with the Company’s Founder, President, CEO and Chair of the Company’s board of directors, all outstanding convertible preferred stock held by those entities were converted into our Class A common stock and thereafter all 57.3 million outstanding shares of Class A common stock held by those entities were exchanged for 57.3 million shares of Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion.

Immediately prior to the completion of the Direct Listing on March 10, 2021, all outstanding shares of the Company’s convertible preferred stock converted into an aggregate of 349,123,976 shares of Class A common stock.

The following table summarizes the convertible preferred stock outstanding immediately prior to the conversion into common stock, and the rights and preferences of the Company’s respective series preceding the Direct Listing in March 2021 (in thousands except per share data):


Series	Shares		Per share price at issuance		Per share conversion price		Aggregate Liquidation Preference		Carrying Value of Preferred
	Authorized	Outstanding
A	28,000	16,358	$	0.02	$	0.02	$	327	$	313
B	45,532	45,532	$	0.03	$	0.03	1,070		1,054
C	95,290	95,290	$	0.03	$	0.03	2,935		4,150
D	54,860	54,215	$	0.04	$	0.04	2,150		2,097
D-1	44,706	44,706	$	0.09	$	0.09	4,172		12,998
E	24,340	24,340	$	1.03	$	1.03	25,000		24,906
F	33,149	33,149	$	4.53	$	4.53	150,000		149,640
G	23,645	23,645	$	6.34	$	6.34	150,000		149,669
H	12,222	11,889	$	45.00	$	45.00	535,000		534,286
Total	361,744	349,124					$	870,654	$	879,113

The following table summarizes the convertible preferred stock outstanding prior to the conversion into common stock, and the rights and preferences of the Company’s respective series as of December 31, 2020 (in thousands except per share data):


Series	Shares		Per share price at issuance		Per share conversion price		Aggregate Liquidation Preference		Carrying Value of Preferred
	Authorized	Outstanding
A	28,000	16,358	$	0.02	$	0.02	$	327	$	313
B	45,532	45,532	$	0.03	$	0.03	1,070		1,054
C	95,290	95,290	$	0.03	$	0.03	2,935		4,150
D	54,860	54,215	$	0.04	$	0.04	2,150		2,097
D-1	44,706	44,706	$	0.09	$	0.09	4,172		12,998
E	24,340	24,340	$	1.03	$	1.03	25,000		24,906
F	33,149	33,149	$	4.53	$	4.53	150,000		149,640
G	23,645	23,645	$	6.34	$	6.34	150,000		149,669
Total	349,522	337,235					$	335,654	$	344,827

Stockholders' Equity (Deficit)

12 Months Ended

Dec. 31, 2021

Stockholders' Equity Note [Abstract]

Stockholders’ Equity (Deficit)

Preferred Stock —The Company is authorized to issue 100 million shares of convertible preferred stock with a par value of $0.0001 per share.

Common Stock —The Company’s amended and restated certificate of incorporation authorizes the issuance of Class A common stock and Class B common stock. As of December 31, 2021, the Company is authorized to issue 4,935.0 million shares of Class A common stock and 65.0 million shares of Class B common stock. Holders of Class A common stock and Class B common stock are entitled to dividends on a pro rata basis, when, as, and if declared by the Company’s board of directors, subject to the rights of the holders of the Company’s convertible preferred stock. Holders of Class A common stock are entitled to one vote per share, and holders of Class B common stock are entitled to 20 votes per share. Each share of our Class B common stock is convertible into one share of our Class A common stock at any time and will convert automatically upon certain transfers and upon the earliest of (i) the date that is specified by the affirmative vote of the holders of two-thirds of the then-outstanding shares of Class B common stock, (ii) the date on which less than 30% of the Class B common stock that was outstanding on March 2, 2021 continues to remain outstanding, (iii) March 10, 2036, (iv) nine months after the death or permanent disability of Mr. Baszucki, and (v) nine months after the date on which Mr. Baszucki no longer serves as our CEO or as a member of our board of directors. Class A common stock and Class B common stock are not redeemable at the option of the holder.

6.0 million shares of Class B common stock held by entities affiliated with David Baszucki, Founder, President, CEO and Chair of our board of directors were converted to Class A common stock during the year ended December 31, 2021.

Class A and Class B common stock are referred to as common stock throughout the Notes to Consolidated Financial Statements, unless otherwise noted.

The Company had reserved shares of common stock for future issuance as follows (in thousands):


	As of December 31,
	2021	2020	2019
Stock options outstanding	63,267	98,502	99,682
RSUs outstanding	14,684	3,061	30
PSUs outstanding	11,500	—	—
Shares available for issuance under Equity Incentive Plan	52,811	15,448	19,073
2020 ESPP	5,809	—	—
Stock warrants outstanding	324	324	1,833
Unregistered restricted stock awards outstanding	468	388	—
Conversion of convertible preferred stock	—	337,235	324,304
Total	148,863	454,958	444,922

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Employee Benefit Plan	12 Months Ended
Employee Benefit Plan	Dec. 31, 2021
Retirement Benefits [Abstract]
Employee Benefit Plan	Employee Benefit PlanThe Company sponsors a 401(k) defined contribution retirement plan for eligible employees. Under the plan, the Company is required to make a safe harbor contribution of 100% of the employee contributions on the first 3% and 50% of the next 2% for each employee, subject to a maximum total contribution mandated by the IRS. The Company made matching contributions in the amount of $9.3 million, $5.1 million, and $3.1 million for December 31, 2021, 2020, and 2019, respectively.

Joint Venture	12 Months Ended
Joint Venture	Dec. 31, 2021
Equity Method Investments and Joint Ventures [Abstract]
Joint Venture	Joint Venture In February 2019, the Company entered into a joint venture agreement with Songhua River Investment Limited, or Songhua, an affiliate of Tencent Holdings Ltd., or Tencent Holdings, to create Roblox China Holding Corp. (in which Roblox holds a 51% ownership interest). Songhua contributed $50 million in capital in exchange for 49% ownership interest. The business of the joint venture is (either directly or indirectly through the joint venture’s wholly owned subsidiaries) to engage in the development, localization and licensing to Shenzhen Tencent Computer Systems Co., Ltd. of the Roblox Client for operation and publication as a game in China, and development, localization and licensing to creators of a Chinese version of the Roblox Studio and also develop and oversee relations with local Chinese developers. Pursuant to the terms of the agreements and ASC 810 “Consolidation,” the joint venture is consolidated with the Company because the Company maintains control through voting rights and the minority member of the joint venture does not have substantive participating rights, or veto rights. As a result, it was determined that the Company has control sufficient to consolidate the operations of the joint venture. The Company classifies the 49% ownership interest held by Songhua as noncontrolling interest on the consolidated balance sheet.

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

The Company is in a net loss position and no material income tax benefits or expense was recorded for the years ended December 31, 2021, December 31, 2020, and December 31, 2019.

The components of loss before income taxes were as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Domestic	$	(472,141)	$	(244,395)	$	(70,734)
Foreign	(31,659)		(19,952)		(371)
	$	(503,800)	$	(264,347)	$	(71,105)

The provision (benefit) for income taxes consists of the following (in thousands):


	Year Ended December 31,
	2021		2020		2019
Current provision:
Federal	$	—	$	—	$	—
State	678		10		9
Foreign	—		25		—
Total current provision	678		35		9
Deferred provision:
Federal	(878)		(6,032)		—
State	(120)		(659)		—
Foreign	—		—		—
Total deferred provision	(998)		(6,691)		—
Provision (benefit) for income taxes	$	(320)	$	(6,656)	$	9

The provision (benefit) for income taxes differs from the amount estimated by applying the statutory income (loss) before taxes as follows:


	Year Ended December 31,
	2021		2020		2019
Federal tax (benefit) at statutory rate	21	%	21	%	21	%
State tax (benefit) at statutory rate, net of federal benefit	2		1		2
Permanent differences	0		0		(4)
Research and development credits	10		3		5
Change in valuation allowance	(117)		(21)		(27)
Stock-based compensation	84		0		0
Change in statutory rate	0		0		2
Foreign rate differential	0		(2)		0
Other	0		1		1
Provision (benefit) for income taxes	0	%	3	%	0	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table presents the significant components of the Company’s deferred tax assets for the periods presented (in thousands):


	December 31,
	2021		2020		2019
Deferred tax assets:
Accruals	$	11,466	$	5,781	$	2,620
Intangibles	—		—		156
Deferred revenue	107,221		35,026		19,948
Net operating loss carryforwards	505,668		76,509		37,525
Tax credit carryforwards	65,855		17,052		9,035
Stock-based compensation	35,368		3,891		2,731
Operating lease liability	56,897		—		—
Interest	1,556		—		—
Other	1,369		766		69
Total gross deferred tax asset	785,400		139,025		72,084
Less: valuation allowance	(711,297)		(122,328)		(64,435)
Net deferred tax assets	74,103		16,697		7,649
Deferred tax liabilities:
Fixed Assets	(13,889)		(10,934)		(7,649)
Intangible Assets	(9,060)		(5,763)		—
Operating lease right-of-use asset	(51,154)		—		—
Total deferred tax liabilities	(74,103)		(16,697)		(7,649)
Net deferred tax assets (liabilities)	$	0	$	0	$	0

The Company accounts for deferred taxes under ASC 740, Income Taxes, which requires a reduction of the carrying amounts of deferred tax assets by a valuation allowance if, based on available evidence, it is more likely than not that such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed periodically based on the ASC 740 more-likely-than-not realization threshold criterion. This assessment considers matters such as future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies and results of recent operations. The evaluation of the recoverability of the deferred tax assets requires that we weigh all positive and negative evidence to reach a conclusion that it is more likely than not that all or some portion of the deferred tax assets will not be realized. The weight given to the evidence is commensurate with the extent to which it can be objectively verified. Due to our lack of U.S. earnings history, the net U.S. deferred tax assets have been fully offset by a valuation allowance.

The Company’s valuation allowance increased by $589.0 million, $57.9 million and $18.2 million, in the years ended December 31, 2021, December 31, 2020, and December 31, 2019, respectively.

As of December 31, 2021, we had federal net operating loss carryforwards of $2,120.8 million, which begin to expire in 2024, state net operating loss carryforwards of $840.1 million, which begin to expire in 2027, and foreign net operating loss carryforwards of $49.6 million, which begin to expire in 2024. Of the $2,120.8 million of federal net operating losses, $2,035.2 million is carried forward indefinitely but is limited to 80% of taxable income.

As of December 31, 2021, we had U.S. federal and California research and development tax credits of approximately $84.7 million and $60.4 million, respectively. The federal research and development credits begin to expire in 2030, while California credits do not expire.

Internal Revenue Code Section 382, or Section 382, ownership change generally occurs if one or more stockholders or groups of stockholders who own at least 5% of our stock increase their ownership by more than 50 percentage points over their lowest ownership percentage within a rolling three-year period. Similar rules may apply under state tax laws. The Company did experience one or more ownership changes in financial periods ending on or before December 31, 2019. In this regard, the Company has determined that based on the timing of the ownership change and the corresponding Section 382 limitations, none of its net operating losses or other tax attributes appear to expire subject to such limitation.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):


	December 31,
	2021		2020		2019
Unrecognized tax benefits at beginning of year	$	19,386	$	10,121	$	6,111
Increases related to current year tax positions	53,440		8,998		3,658
Increases related to prior year tax positions	93		481		351
Decreases related to prior year tax positions	—		(215)		—
Decreases related to expiration of prior year tax positions	—		—		—
Decreases related to settlements of prior year tax positions	—		—		—
Unrecognized tax benefits at end of year	$	72,919	$	19,386	$	10,121

As of December 31, 2021, we had gross unrecognized tax benefits of approximately $72.9 million of which none would impact income tax expense if recognized to the extent that the Company continues to maintain a full valuation allowance against its deferred tax assets.

Our policy is to recognize interest and penalties related to income taxes as components of interest expense and other expense, respectively. The Company did not accrue interest and penalties related to unrecognized tax benefits as of December 31, 2021, December 31, 2020, and December 31, 2019. The Company does not anticipate any significant change within twelve months of this reporting date.

The Company is subject to taxation in the U.S. and various states, for which the statutes of limitations have not expired.

On January 1, 2022, a provision of the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures and requires taxpayers to amortize such costs over five years. The Company does not anticipate this provision to have a significant impact to the full year 2022 and will continue to evaluate the impact on its business in future periods.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Stock-based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Stock-based Compensation

2004 Incentive Stock Plan

In 2004, the Company approved the 2004 Incentive Stock Plan, or the 2004 Plan, under which the Board of Directors may grant incentive stock options to employees and nonstatutory stock options to employees, members of the Board of Directors and consultants of the Company and its subsidiaries.

Under the 2004 Plan, incentive stock options and nonstatutory stock options may be granted at a price not less than fair value and 85% of the fair value, respectively (110% of fair value for incentive stock options granted to holders of 10% or more of voting stock). Fair value is determined by the Board of Directors. Options are exercisable over periods not to exceed 10 years (five years for incentive stock options granted to holders of 10% or more of the voting stock) from the date of grant.

The 2004 Plan was terminated on the effective date of 2017 Amended and Restated Equity Incentive Plan, and accordingly, no shares are available for issuance under the 2004 Plan. The 2004 Plan continues to govern outstanding awards granted thereafter.

2017 Amended and Restated Equity Incentive Plan

In 2017, the Company approved the 2017 Amended and Restated Equity Incentive Plan, or the 2017 Plan, under which the Board of Directors may grant incentive stock options to employees and nonstatutory stock options, stock appreciation rights, RSAs, and RSUs, to employees, members of the Board of Directors and consultants of the Company and its subsidiaries.

Under the 2017 Plan, incentive stock options and nonstatutory stock options may be granted at a price not less than fair value (110% of fair value for options issued to holders of 10% or more of voting stock). Stock appreciation rights may be granted at a price not less than fair value. Fair value is determined by the Board of Directors. Options are exercisable over periods not to exceed 10 years (five years for incentive stock options granted to holders of 10% or more of the voting stock) from the date of grant.

In connection with the Direct Listing, the 2017 Plan was terminated effective immediately prior to the effectiveness of the 2020 Equity Incentive Plan, and accordingly, no shares are available for issuance under the 2017 Plan. The 2017 Plan continues to govern outstanding awards granted thereafter.

2020 Equity Incentive Plan

In 2020, the Company approved the 2020 Equity Incentive Plan, or the 2020 Plan, which became effective on the business day immediately prior to the effective date of the registration statement for the Company’s Direct Listing. Under the 2020 Plan, the Board of Directors may grant incentive stock options to employees and stock appreciation rights, RSAs, and RSUs, performance units and performance shares to employees, members of the Board of Directors and consultants of the Company and its subsidiaries.

Under the 2020 Plan, incentive stock options, nonstatutory stock options, and stock appreciation rights may be granted at a price not less than 100% of the fair market value of the underlying common stock on the date of grant (110% of fair value for incentive stock options issued to holders of 10% or more of voting stock). Options and stock appreciation rights are exercisable over a period not to exceed 10 years (five years for incentive stock options granted to holders of 10% or more of the voting stock) from the date of grant.

60.0 million shares of Class A common stock are reserved for future issuance under the 2020 Plan. Stock-based awards under the 2020 Plan that expire or are forfeited, cancelled, or repurchased generally are returned to the pool of shares of Class A common stock available for issuance under the 2020 Plan. The 2020 Plan provides for annual automatic increases in the number of shares of Class A common stock reserved thereunder. In addition, subject to the adjustment provisions of the 2020 Plan, the shares reserved for issuance under the 2020 Plan also includes (i) any shares that, as of the day immediately prior to the effective date of the registration statement, have been reserved but not issued pursuant to any awards granted under the 2017 Plan and are not subject to any awards thereunder and (ii) any shares subject to stock options, RSUs or similar awards granted under our 2017 Plan and 2004 Plan that, after the effective date of the registration statement, expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by the Company for payment of an exercise price or for tax withholding obligations, or are forfeited to or repurchased by the Company due to failure to vest.

Employee Stock Purchase Plan

In 2020, the Company’s board of directors adopted, and its stockholders approved, the 2020 ESPP, which became effective in connection with the Direct Listing. The 2020 ESPP authorizes the issuance of shares of common stock pursuant to purchase rights granted to employees. A total of 6.0 million shares of the Company’s Class A common stock have been reserved for future issuance under the 2020 ESPP, in addition to any annual automatic evergreen increases in the number of shares of Class A common stock reserved for future issuance under the 2020 ESPP.

The 2020 ESPP plan is a compensatory plan and includes two components: a component that allows the Company to make offerings intended to qualify under Section 423 of the Code and a component that allows the Company to make offerings not intended to qualify under Section 423 of the Code to designated companies. Subject to any limitations contained therein, the 2020 ESPP allows eligible employees to contribute (in the form of payroll deductions or otherwise to the extent permitted by the administrator) an amount established by the administrator from time to time in its discretion to purchase Class A common stock at a discounted price per share. The price at which Class A common stock is purchased under the 2020 ESPP is equal to 85% of the fair market value of a share of the Company’s Class A common stock on the enrollment date or exercise date, whichever is lower. Offering periods are generally 24 months long and begin on February 25 and August 25 each year with each offering period having four purchase periods of approximately six months each. The initial offering period began on March 10, 2021 and will end on February 27, 2023.

Stock-based compensation expense

Stock-based compensation expense included in the consolidated statements of operations was as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Infrastructure and trust & safety	$	35,255	$	7,396	$	2,085
Research and development	219,851		39,402		9,695
General and administrative	72,929		25,939		3,347
Sales and marketing	13,907		6,421		2,507
Total stock-based compensation	$	341,942	$	79,158	$	17,634

The stock-based compensation expense related to equity awards granted to non-employees for the years ended December 31, 2021, 2020, and 2019 was not material.

Options

The assumptions used in the Black-Scholes pricing model for stock-based compensation for the periods below were as follows:


	Year Ended December 31,
	2020	2019
Risk-free interest rate	0.5% -1.8%	1.5% -1.7%
Expected volatility	35.4% - 39.8%	37.0% - 40.8%
Dividend yield	—	—
Expected terms (in years)	7	6 - 7
Fair value of common stock	$4.61 - $21.06	$3.35 - $4.01

As of December 31, 2021, the Company had $161.4 million of unrecognized stock-based compensation related to unvested options, which will be recognized over a weighted-average remaining requisite service period of 2.5 years.

The following table summarizes stock option activity under the Plan (in thousands except per share data and remaining contractual term):


	Options Outstanding
	Number of Shares Subject to Options	Weighted- Average Exercise Price		Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Balances as of December 31, 2018	83,395	$	0.90
Granted	31,381	$	3.38
Cancelled	(6,199)	$	2.10
Exercised	(8,895)	$	0.36
Balances as of December 31, 2019	99,682	$	1.66	7.84	$	174,497
Granted	23,269	$	4.73
Cancelled	(3,859)	$	2.39
Exercised	(20,590)	$	0.74
Balances as of December 31, 2020	98,502	$	2.55	7.76	$	3,838,994
Granted	—	—
Cancelled	(1,862)	$	3.95
Exercised	(33,373)	$	1.95
Balances as of December 31, 2021	63,267	$	2.82	6.97	$	6,348,395
Exercisable as of December 31, 2021	35,431	$	1.86	6.19	$	3,589,069
Vested and expected to vest at December 31, 2021	63,267	$	2.82	6.97	$	6,348,395

No options were granted during the fiscal year ended December 31, 2021.

The weighted-average grant-date fair value of options granted for the fiscal years ended December 31, 2020, and 2019 was $9.35, and $1.70, respectively. The intrinsic value of options exercised for the fiscal years ended December 31, 2021, 2020, and 2019 was $2,548.3 million, $189.5 million, and $26.8 million, respectively. Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock. The aggregate grant-date fair value of options that vested during the fiscal years ended December 31, 2021, 2020, and 2019 was $79.9 million, $29.8 million, and $17.1 million, respectively.

The following table summarizes RSUs and unregistered restricted stock awards (“unregistered RSAs”) activity (in thousands except per share data):


	Restricted Stock Units			Restricted Stock Awards
	Number of Shares	Weighted- Average grant date value		Number of Shares	Weighted- Average grant date fair value
Unvested as of December 31, 2019	30	$	3.35	—	—
Granted	3,061	$	31.55	388	$	37.75
Vested	(30)	$	3.35	—	—
Unvested as of December 31, 2020	3,061	$	31.55	388	$	37.75
Granted	13,382	$	78.92	209	$	81.67
Vested	(1,376)	$	38.46	(129)	$	37.75
Cancelled	(383)	$	52.78	—	—
Unvested as of December 31, 2021	14,684	$	68.03	468	$	57.37

As of December 31, 2021, the Company had $13.4 million of unrecognized stock-based compensation related to unregistered RSAs, which will be recognized over the weighted average remaining requisite service period of 2.3 years. See Note 5, “Acquisitions” to the Notes to Consolidated Financial Statements for more information.

As of December 31, 2021, the Company had $913.7 million of unrecognized stock-based compensation related to RSUs, which will be recognized over the weighted average remaining requisite service period of 3.4 years.

The RSUs granted prior to our Direct Listing vest upon the satisfaction of both the service condition and a liquidity event-related performance vesting condition which was satisfied on the Effective Date. In the first quarter of 2021, we recorded cumulative stock-based compensation expense of $21.3 million related to all then-outstanding RSUs for which the service-based vesting condition has been satisfied. Stock-based compensation related to the remaining service-based period after the liquidity event-related performance vesting condition was satisfied will be recorded over the remaining requisite service period using the accelerated attribution method.

The RSUs granted subsequent to our Direct Listing only have a service based vesting condition, which is satisfied generally over 4 years.

CEO Long-Term Performance Award

In February 2021, the leadership development and compensation committee granted the CEO a Long-Term Performance Award, an RSU award under our 2017 Plan to Mr. Baszucki, which would provide him the opportunity to earn a maximum number of 11,500,000 shares of Class A common stock. The CEO Long-Term Performance Award vests upon the satisfaction of a service condition and achievement of certain stock price goals, as described below.

The CEO Long-Term Performance Award is eligible to vest based on the Company’s stock price performance over performance periods with the first beginning two years after the Effective Date and ending on the seventh anniversary of the Effective Date. In addition, and as described in greater detail below, Mr. Baszucki must remain employed as our CEO through the date a Company Stock Price Hurdle is achieved in order to earn the RSUs that relate to an applicable Company Stock Price Hurdle. The CEO Long-Term Performance Award is divided into seven tranches that are eligible to vest based on the achievement of stock price goals, each a Company Stock Price Hurdle, measured based on an average of our stock price over a consecutive 90-day trading period applicable to the performance period as set forth below.


	Company Stock Price Hurdle		Number of RSUs Eligible to Vest	Performance Period Commencement Dates as Measured from the Effective Date
1	$	165.00	750,000	2 years
2	$	200.00	750,000	3 years
3	$	235.00	2,000,000	4 years
4	$	270.00	2,000,000	5 years
5	$	305.00	2,000,000	5 years
6	$	340.00	2,000,000	5 years
7	$	375.00	2,000,000	5 years

If the Company Stock Price Hurdle fails to reach $165.00 prior to the seventh anniversary of the Effective Date, no portion of the CEO Long-Term Performance Award will vest. Further, any RSUs associated with a Company Stock Price Hurdle not achieved by the seventh anniversary of the Effective Date will terminate and be cancelled for no additional consideration to Mr. Baszucki. Mr. Baszucki must remain employed by us as our CEO from the Effective Date through the date a Company Stock Price Hurdle is achieved to earn the RSUs associated with an applicable Company Stock Price Hurdle. The Company Stock Price Hurdles and Number of RSUs Eligible to Vest will be adjusted to reflect any stock splits, stock dividends, combinations, reorganizations, reclassifications, or similar events under the 2017 Plan. Each vested RSU under the CEO Long-Term Performance Award will be settled in a share of our Class A common stock on the next company quarterly settlement date occurring on or after the date on which the RSU vests, regardless of whether Mr. Baszucki remains the CEO as of such date. Company quarterly settlement dates for this purpose are February 20, May 20, August 20, and November 20.

The Company estimated the grant date fair value of the CEO Long-Term Performance Award using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the Company Stock Price Hurdles may not be satisfied. A Monte Carlo simulation model requires use of various assumptions, including the underlying stock price, volatility, and the risk-free interest rate as of the valuation date, corresponding to the length of time remaining in the performance period, and expected dividend yield. The weighted-average grant date fair value of the CEO Long-Term Performance Award was estimated to be $20.19 per share, and the Company estimates that it will recognize total stock-based compensation expense of approximately $232.2 million over the derived service period of each of the seven separate tranches which is between 3.45 – 5.38 years. If the Company Stock Price Hurdles are met sooner than the derived service period, the stock-based compensation expense will be adjusted to reflect the cumulative expense associated with the vested award. The stock-based compensation expense will be recognized if service as the Company’s CEO is provided by Mr. Baszucki over the requisite service period, regardless of whether the Company Stock Price Hurdles are achieved.

The Company recorded $42.0 million of stock-based compensation expense related to the CEO Long-Term Performance Award during the year ended December 31, 2021. As of December 31, 2021, unrecognized stock-based compensation expense related to the CEO Long-Term Performance Award was $190.1 million which will be recognized over the remaining derived service period of the respective tranche.

Employee Stock Purchase Plan

The following assumptions were used in the Black-Scholes options pricing model in estimating the fair value of 2020 ESPP on the date of the grant:


	Year Ended
	December 31, 2021
Risk-free interest rate	0.06%	-	0.25%
Expected volatility	46.97%	-	56.91%
Dividend yield	—%
Expected terms (in years)	0.44	-	2.00

The Company recorded $9.9 million of stock-based compensation expense related to the 2020 ESPP during the year ended December 31, 2021.

Tender Offer

In March 2020, in connection with the Company’s sale of the Series G convertible preferred stock, the purchasers of the Series G convertible preferred stock conducted a tender offer to acquire approximately 31.1 million shares of common and 24.0 million shares of convertible preferred stock from employees, former employees, and other existing investors. In connection with the tender offer, the Company waived any rights of first refusal or other transfer restrictions applicable to such shares. As a result of this transaction, we recorded a total of $35.2 million in stock-based compensation expense in the year ended December 31, 2020 for the difference between the price paid for shares held by our employees and former employee stockholders and the estimated fair market value on the date of the transaction.

Basic and Diluted Net Loss Per Common Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Basic and Diluted Net Loss Per Common Share

Basic and Diluted Net Loss Per Common ShareThe following table presents the calculation of basic and diluted net loss per share (in thousands, except per share data):


	Year Ended December 31,
	2021		2020		2019
Basic and diluted net loss per share
Numerator
Consolidated net loss	$	(503,480)	$	(257,691)	$	(71,114)
Less: net loss attributable to the noncontrolling interest	(11,829)		(4,437)		(146)
Net loss attributable to common stockholders	$	(491,651)	$	(253,254)	$	(70,968)
Denominator
Weighted-average common shares used in per share computation, based and diluted	505,858		182,108		163,051
Net loss per share, basic and diluted	$	(0.97)	$	(1.39)	$	(0.44)

The potential shares of common stock that were excluded from the computation of diluted net loss per share for the period presented because including them would have been anti-dilutive are as follows (in thousands):


	As of December 31,
	2021	2020	2019
Stock options outstanding	63,267	98,502	99,682
RSUs outstanding	14,684	3,061	30
2020 ESPP	523	—	—
Stock warrants outstanding	324	324	1,833
Unregistered restricted stock awards outstanding	468	388	—
Convertible Preferred Stock outstanding	—	337,235	324,304
Total	79,266	439,510	425,849

Geographic Information

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Geographic Information

For revenue by geographic area, based on the location of the Company’s users, refer to Note 2, “Revenue from Contracts with Customers” to the Notes to Consolidated Financial Statements.

Long-lived assets, comprising property and equipment, net, by geographic area were as follows (in thousands):


	Year Ended December 31,
	2021		2020
United States	$	239,889	$	179,870
Rest of world	31,463		26,545
Total	$	271,352	$	206,415

Overview and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Fiscal Year

Fiscal Year—The Company’s fiscal year ends on December 31. For example, references to fiscal 2021, 2020 and 2019 refer to the fiscal year ending December 31, 2021, December 31, 2020, and December 31, 2019, respectively.

Basis of Presentation

Basis of Presentation—The accompanying consolidated financial statements have been prepared in accordance with GAAP, and applicable rules and regulations of the SEC.

Certain prior period balances have been reclassified in the accompanying consolidated financial statements to conform to the current year presentation. These reclassifications are not material and had no effect on the prior year's net loss or accumulated deficit.

Principles of Consolidation

Principles of Consolidation—The consolidated financial statements include the accounts of the Company and subsidiaries over which the Company has control. All intercompany transactions and balances have been eliminated. The consolidated financial statements include 100% of the accounts of wholly owned and majority owned subsidiaries, and the ownership interest of minority investors is recorded as noncontrolling interest.

Use of Estimates

Use of Estimates—The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, the estimated period of time the virtual items are available to the user and the estimated amount of consumable and durable virtual items purchased for which the Company lacks specific information that we use for revenue recognition, useful lives of property and equipment and intangible assets, valuation of acquired goodwill and intangible assets, accrued liabilities (including accrued developer exchange fees), contingent liabilities, valuation of deferred tax assets and liabilities, stock-based compensation, the carrying value of operating lease right-of-use assets, evaluation of recoverability of long-lived assets and carrying value of goodwill. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. Actual results could differ from those estimates and any such differences may be material to the consolidated financial statements. To the extent that there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected.The novel coronavirus, or COVID-19, pandemic has created, and may continue to create, significant uncertainty in macroeconomic conditions. The full extent to which the COVID-19 pandemic will directly or indirectly impact the global economy, the lasting social effects, and impact on the Company’s business, results of operations, and financial condition will depend on future developments, such as COVID-19 vaccination rates and the availability of COVID-19 vaccines both globally and in the U.S., and the emergence of new strains of the virus, that are highly uncertain and cannot be accurately predicted. As of the date of issuance of the consolidated financial statements, the Company is not aware of any specific event of circumstance related to COVID-19 that would require it to update its estimates or judgments or adjust the carrying value of its assets or liabilities. As events continue to evolve and additional information becomes available, the Company’s estimates and assumptions may change materially in future periods.

Foreign Currency Transactions

Foreign Currency Transactions—The functional currency of the Company’s international subsidiaries is the U.S. dollar, with the exception of a Chinese subsidiary wholly owned by Roblox China Holding Corp., as discussed in Note 14, “Joint Venture” to the Notes to Consolidated Financial Statements. Assets and liabilities are translated to U.S. dollars at the period-end exchange rate. Revenues and expenses are translated using the average exchange rate for the period. The effects of foreign currency translation are included in stockholders’ deficit as a component of accumulated other comprehensive loss in the accompanying consolidated balance sheets and periodic movements are summarized as a line item in the consolidated statements of comprehensive loss.

Stock Split

Stock Split—On January 31, 2020, the Company’s board of directors approved an amendment to its certificate of incorporation to effect a split of shares of the issued and outstanding common stock and convertible preferred stock at a 2-for-1 ratio. The stock split was approved by the Company’s stockholders and effected on January 31, 2020.

All issued and outstanding shares of common stock and convertible preferred stock, dividend rates, conversion rates, options to purchase common stock, exercise prices, and the related per-share amounts contained in these consolidated financial statements have been adjusted to reflect these stock splits for all periods presented.

Segment

Segments—The Company operates as a single operating and reportable segment, which is at the consolidated entity level. The chief operating decision maker or CODM of the Company is its CEO, who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated information of our revenue.

Revenue Recognition

Revenue Recognition Policy

In accordance with ASC 606, Revenue from Contracts with Customers, revenue is recognized when control of the service is transferred to the customer. The amount of revenue recognized reflects the consideration that the Company expects to be entitled to in exchange for these services. To achieve the core principle of this standard, the Company determines revenue recognition by:

•identifying the contract, or contracts, with the customer;

•identifying the performance obligations in the contract;

•determining the transaction price;

•allocating the transaction price to performance obligations in the contract; and

•recognizing revenue when, or as, the Company satisfies performance obligations by transferring the promised services.

The Company derives substantially all of its revenue from the sale of virtual items on the Roblox Platform.

Roblox Platform

The Company operates the Roblox Platform as live services that allow users to play and socialize with others for free. Within the experience, however, users can purchase virtual currency (Robux) to obtain virtual items to enhance their social experience. Proceeds from the sale of Robux are initially recorded in deferred revenue and recognized as revenues as a user purchases and uses virtual items. The Company’s identified performance obligation is to provide users with the ability to acquire, use, and hold virtual items on the Roblox Platform over the estimated period of time the virtual items are available to the user or until the virtual items are consumed.

Users can purchase Robux, as one-time purchases or through monthly subscriptions via mobile payments, credit cards, or prepaid cards. Payments from users are non-refundable and relate to non-cancellable contracts for a fixed price that specify Company’s obligations. Revenue is recorded net of taxes, assessed by a government authority that are both imposed on and concurrent with specific revenue transactions between the Company and its users, and estimated chargebacks. Such payments are initially recorded to deferred revenue.

The satisfaction of Company’s performance obligation is dependent on the nature of the virtual item purchased and as a result, the Company categorizes its virtual items as either consumable or durable.

•Consumable virtual items represent items that can be consumed by a specific user action. Common characteristics of consumable virtual items may include items that are no longer displayed on the user’s inventory after a short period of time or do not provide the user any continuing benefit following consumption. For the sale of consumable virtual items the Company recognizes revenue as the items are consumed.

•Durable virtual items represent items which result in a persistent change to a users’ character or item set (e.g., virtual hat, pet, or house). These items are generally available to the customer to hold, use, or display for as long as they are on the Roblox Platform. The Company recognizes revenue from the sale of durable virtual items ratably over the estimated period of time the items are available to the user which is estimated as the average lifetime of a paying user.

To separately account for consumable and durable virtual items, the Company specifically identifies each purchase for the majority of virtual items purchased on the Roblox Platform. For the remaining population, the Company estimates the amount of consumable and durable virtual items purchased based on data from specifically identified purchases and the expected behavior of the users within similar experiences. The estimation of amount of consumable and durable virtual items purchased for the population of purchases not specifically identified, requires management’s judgement as it requires the Company to evaluate and estimate the expected behavior of users in the population using information from known purchases in similar experiences.

The average lifetime of a paying user estimate is calculated based on historical monthly retention data for each user cohort to project future participation on the Roblox Platform and is currently estimated to be 23 months. Determining the estimated average lifetime of a paying user requires management’s judgment as it requires the Company to analyze the most recent trends in player cohort activity and other qualitative factors to estimate the average lifetime of a paying user. The Company also considers results from prior analyses in determining the estimated average lifetime of a paying user. The Company believes this estimate is the best representation of the average life of the durable virtual items.

Principal Agent Considerations

The Company evaluates the sales of Robux via third-party payment processors to determine whether its revenues should be reported gross or net of fees either retained by the payment processor or paid to the developers and creators (Developer Exchange Fees). The Company is the principal in the transaction with the end user as a result of controlling, hosting, and integrating the delivery of the virtual items to the end user. The Company records revenue gross as a principal and records fees paid to payment processors and Developer Exchange Fees as an expense.

Other Revenue

Other revenue primarily consists of revenue from advertising, licenses, and royalties. The Company recognizes revenue based on the performance obligations of the underlying agreements, in an amount that reflects the consideration that the Company expects to be entitled to.

Cost of Revenue

Cost of Revenue—Cost of revenue primarily consists of payment processing fees charged by various distribution channels.

Deferred Cost of Revenue

Deferred Cost of Revenue—The Company defers contract costs that are direct and incremental to obtaining user contracts (i.e., sale of Robux). Deferred cost of revenue primarily consists of payment processing fees charged by third-party payment processors. Payment processing fees for initial contracts are commensurate with subsequent sales, and as a result, are amortized over the estimated period of time the virtual items are available to the user on the Roblox Platform (based on the nature of the virtual item as either consumable or durable) in proportion to the revenue recognized. The Company classifies deferred cost of revenue as short-term or long-term based on when the Company expects to recognize the expense. Short-term and long-term deferred cost of revenue are included on the Company’s consolidated balance sheets. Deferred cost of revenue are periodically reviewed for impairment.

Concentration of Credit Risk and Significant Customers

Concentration of Credit Risk and Significant Customers—Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivables. Cash and cash equivalents are deposited with high quality financial institutions and may, at times, exceed federally insured limits. Management believes that the financial institutions that hold the Company’s deposits are financially credit worthy and, accordingly, minimal credit risk exists with respect to those balances. Generally, these deposits may be redeemed upon demand and, therefore, bear minimal interest rate risk.

The Company provides credit, in the normal course of business, to various customers, performs ongoing credit evaluations of its customers, and maintains allowances for potential credit losses on customers’ accounts when deemed necessary. The Company has not experienced any material credit losses to date.

Fair Value Hierarchy

Fair Value Hierarchy—Assets and liabilities recorded at fair value in the consolidated financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are directly related to the amount of subjectivity, associated with the inputs to the valuation of these assets or liabilities are as follows:

Level 1—Inputs that are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2—Inputs (other than quoted prices included in Level 1) that are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash—Cash and cash equivalents primarily consisted of cash in hand, money market instruments, and U.S. Treasuries with maturities of 90 days or less from the date of purchase.Restricted cash consists of cash deposited with financial institutions as collateral for the Company’s obligations under its facility leases. These restricted cash balances have been excluded from our cash and cash equivalents balance and are classified as restricted cash on our consolidated balance sheets.

Short-Term Investments

Short-Term Investments—The Company determines the appropriate classification of its investments at the time of purchase and reevaluates such determination at each balance sheet date based on their maturities and the Company’s reasonable expectation with regard to those securities (i.e., expectations of sales and redemptions). Based on our intentions regarding our short-term investments, all short-term investments are classified as available-for-sale and are reported at fair value, which is based on quoted market prices for such securities, if available, or based on quoted market prices of financial instruments with similar characteristics. Unrealized gains and losses recorded as a separate component of other comprehensive loss, net of income taxes. The Company periodically reviews whether its securities may be other-than-temporarily impaired, including whether or not (i) the Company has the intent to sell the security or (ii) it is more likely than not that the Company will be required to sell the security before its anticipated recovery. If one of these factors is met, the Company will record an impairment loss associated with its impaired investment. Realized gains and losses and other-than-temporary impairments, if any, on available-for-sale securities are recognized upon sale and are included in other expense, net in the consolidated statements of operations.

Accounts Receivable and Related Allowance

Accounts Receivable and Related Allowance—Accounts receivable represent amounts due to us based on contractual obligations with our customers. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations, it records a specific allowance as a reduction to the accounts receivable balance to reduce it to its net realizable value. In addition, the Company holds a reserve for chargebacks based on historical data and current trends and projections. Specific allowances and chargeback reserves have not been material for any of the period presented.

Property and Equipment—Net

Property and Equipment—Net—Property and equipment are recorded at historical cost less accumulated depreciation and amortization. Depreciation and amortization is recorded on a straight line basis over the estimated useful lives of the respective assets. Repair and maintenance costs are expensed as incurred. The estimated useful life for each asset category is as follows:


Property and Equipment			Estimated Useful Life
Servers and related equipment			5 years
Computer hardware and software			2 - 5 years
Furniture and fixtures			2 years
Leasehold improvements			Shorter of 10 years or life of lease

Goodwill and Intangible Assets

Goodwill and Intangible Assets—Goodwill is not amortized but rather tested for impairment annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Goodwill represents the excess of the purchase price over the fair value of net assets acquired in a business combination and is allocated to reporting units expected to benefit from the business combination. The Company has determined that it has one operating segment and one reporting unit. The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If the Company determines that as a result of the qualitative assessment that it is more likely than not (i.e., greater than 50% likelihood) that the fair value of a reporting unit is less than its carrying amount, then the quantitative test is required or it can directly perform the quantitative analysis. Goodwill impairment is recognized when the quantitative assessment results in the carrying value exceeding the fair value, in which case an impairment charge is recorded to the extent the carrying value exceeds the fair value. There were no impairment charges to goodwill during the periods presented.

Intangible assets with finite lives are carried at cost, less accumulated amortization. Intangible assets are amortized on a straight-line basis over the estimated useful life of up to five years. Each period the Company evaluates the estimated remaining useful lives of its intangible assets and whether events or changes in circumstances warrant a revision to the remaining period of amortization.

Business Combinations and Asset Acquisitions

Business Combinations and Asset Acquisitions —The Company applies a screen test to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets to determine whether a transaction is accounted for as an asset acquisition or business combination. When the Company acquires a business, the purchase consideration is allocated to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their estimated respective fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. The Company’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable, and as a result, actual results may differ from estimates. In addition, unanticipated events and circumstances may occur that may affect the accuracy or validity of such estimates. As a result, during the measurement period, which may be up to one year following the acquisition date, if new information is obtained about facts and circumstances that existed as of the acquisition date, the Company may record adjustments to the fair value of these assets and liabilities, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded within the accompanying consolidated statements of operations.

The Company accounts for a transaction as an asset acquisition pursuant to the provisions of ASU No. 2017-01, Clarifying the Definition of a Business, when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, or otherwise does not meet the definition of a business. Asset acquisition-related costs are capitalized as part of the asset or assets acquired.

Software Development Costs Research and Development

Software Development Costs—The Company incurs costs related to developing the Roblox Platform and related support systems. The Company capitalizes development costs when preliminary development efforts are successfully completed, management has authorized and committed project funding, and it is probable that the project will be completed and the software will be used as intended. Development costs meeting the Company’s capitalization criteria were not material during the periods presented.Research and Development— Research and development costs are expensed as incurred and consist primarily of personnel costs and allocated overhead.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets—The Company periodically evaluates the carrying value of long-lived assets to be held and used when indicators of impairment exist. The carrying value of a long-lived asset to be held and used is considered impaired when the estimated separately identifiable undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the estimated cash flows discounted at a rate commensurate with the risk involved. No impairment charges have been recorded during the periods presented.

Developer Exchange Fees

Developer Exchange Fees—The Company has established an incentive program for developers and creators to build and operate virtual worlds within the Roblox environment. Developers and creators may charge other users virtual currency to participate in their world. Under certain conditions as outlined in the Developer Exchange Program agreement with developers and creators, such as earning a minimum amount of 100,000 Robux, having a verified account, and an account in good standing; and in compliance with applicable law, these developers and creators can receive a cash payout based on the amount of accumulated earned Robux from other users. The Company records the expense and liability associated with this program on the accompanying consolidated statements of operations and balance sheet, respectively.

Infrastructure and Trust & Safety

Infrastructure and Trust & Safety—Infrastructure and trust & safety consists primarily of expenses related to the operation of our data centers and technical infrastructure in order to deliver our platform to our users. Infrastructure expenses also include personnel costs and allocated overhead for employees and team members whose primary responsibilities relate to supporting our infrastructure and trust & safety initiatives.

Stock-Based Compensation