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Roblox, the children’s gaming company that is slated to go public, released an updated prospectus on Thursday with adjusted financials due to its “material weakness” in reporting. Revenue in the first three quarters of 2020 was higher than previously reported, while the net loss was lower.
Revenue through September increased 70% year over year to $ 613.9 million. In its previous prospectus in mid-January, Roblox said sales increased 68% to $ 588.7 million during that period. The revised net loss for the period was $ 194.5 million compared to $ 213.3 million as previously reported.
“We have identified a material weakness in our internal control of financial reporting, which has led to an adjustment of our annual financial statements for the fiscal years ending December 31, 2018 and December 31, 2019 and the nine months ending September 30, 2020,” it says in filing.
The disclosure comes after Reuters reported in late January that the company postponed its public debut because the SEC reviewed the company’s method of recording revenue through its digital currency. In the story, Reuters cited a memo that was sent to employees.
Roblox said it now expects its direct listing to take place in March instead of February as stated in a previous filing. Roblox originally planned to go public in December but delayed its debut for the first time and switched to a direct listing after Doordash and Airbnb priced their IPOs well below the opening price of the shares.
Roblox, which has one of the most successful apps on Apple and Google devices, makes money by allowing millions of users to buy Robux virtual currency, which they can use to dress up their avatar or advance in games.
The company stated that the financial adjustment was related to how and when Robux purchases are posted as sales, rather than leaving them as prepaid expenses.
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