Roblox expands Google advertising partnership with rewarded video launch

Roblox Corporation announced during its July 31, 2025 earnings call that its advertising partnership with Google has achieved significant momentum, with nearly 100 publishers now onboarded to the rewarded video advertising platform. The gaming company expanded eligibility criteria for its Google-integrated rewarded video product, which officially launched after extensive beta testing.

According to CEO David Baszucki, the company has been "very fastidious in watching the performance of that product on both iOS and Android, making sure even on low memory devices that we offer the performance and scale that we're used to." The rewarded video feature is now live across the platform after rigorous performance testing to ensure consistent functionality across different device specifications.

The advertising partnership represents a crucial revenue diversification initiative for Roblox, which has historically relied primarily on its virtual currency Robux for monetization. Chief Financial Officer Naveen Chopra emphasized that advertising monetization models are enhanced by continued user growth and engagement, describing a "flywheel nature" where platform growth facilitates creator experimentation with different monetization approaches.

Financial Results Drive Partnership Momentum

Roblox reported exceptional financial performance for Q2 2025, with results that underscore the strategic importance of advertising diversification initiatives. Revenue reached $1,080.7 million, representing 21% year-over-year growth. The consistent revenue growth across multiple quarters demonstrates the platform's ability to maintain monetization efficiency despite market volatility affecting other gaming companies.

Bookings surged to $1,437.6 million, marking 51% year-over-year growth and exceeding management expectations. This dramatic increase reflects heightened user engagement driven by viral content experiences and improved creator monetization tools. The bookings outperformance provides substantial deferred revenue that will be recognized over the estimated 27-month average lifetime of paying users.

Chief Financial Officer Naveen Chopra emphasized that the company operates with a focus on "bookings growth and growth in free cash flow, which we believe builds long-term enterprise value for Roblox." This strategic approach prioritizes sustainable revenue generation over short-term profit optimization, supporting continued investment in advertising infrastructure and creator tools.

Daily Active Users reached 111.8 million, growing 41% year-over-year and demonstrating the platform's expanding reach across global markets. Hours engaged totaled 27.4 billion, up 58% compared to Q2 2024, indicating deeper user involvement with platform content. These engagement metrics provide the audience scale necessary for premium advertising partnerships like the Google integration.

Average monthly unique payers increased 42% year-over-year to 23.4 million users, with average bookings per monthly unique payer reaching $20.48. The expansion of paying users creates a more valuable advertising demographic, as engaged spenders typically represent higher-value audiences for brand partners. Average bookings per Daily Active User grew 7% to $12.86, reflecting improving monetization efficiency per user.

Developer exchange fees reached $316.4 million, growing 52% year-over-year and representing 29% of revenue. This substantial increase demonstrates how advertising partnerships complement traditional creator monetization by providing additional revenue streams. The growth in developer payments indicates that advertising initiatives like rewarded video are generating meaningful income for content creators.

Operating cash flow strengthened to $199.3 million, up 32% year-over-year, while free cash flow expanded 58% to $176.7 million. Chopra noted that both metrics were impacted by a $30 million payout delayed from Q1 to Q2. Adjusting for this timing shift, operating cash flow would have increased 51% and free cash flow would have grown 85% year-over-year.

The company raised full-year 2025 guidance significantly, projecting revenue growth of 22% to 25% and bookings growth of 34% to 37%. The guidance increase of more than $610 million in bookings represents over 11% above prior annual expectations. CFO Chopra attributed the guidance raise to sustained momentum while maintaining conservative assumptions about viral content sustainability.

Consolidated net loss widened to $279.8 million compared to $207.2 million in Q2 2024, primarily due to increased infrastructure costs supporting higher user engagement. Adjusted EBITDA declined to $18.4 million from $66.5 million in the prior year period, reflecting the company's investment prioritization in growth infrastructure over near-term profitability.

Infrastructure and trust & safety expenses increased 25% year-over-year to $152.6 million, representing 14% of revenue. These costs, largely driven by third-party cloud infrastructure requirements for unexpected engagement growth, demonstrate the operational scaling necessary to support advertising partnerships at global scale.

Personnel costs excluding stock-based compensation grew 20% to $244.8 million, representing 23% of revenue. The headcount expansion supports product development initiatives including advertising technology integration and creator tools that enable monetization diversification strategies.

Technical Implementation and Performance Metrics

Baszucki revealed that internal data shows "strong and continued pickup" of rewarded video advertisements among creators. While the company declined to disclose specific revenue figures from the advertising initiative, the CEO noted that "a wide range of creators" are actively implementing rewarded video features in their experiences.

The rewarded video system allows game creators to offer players in-game rewards in exchange for watching short advertisements. This model provides a non-disruptive advertising experience while generating revenue for both content creators and the platform. The integration with Google's advertising infrastructure enables access to premium advertiser demand while maintaining Roblox's community standards.

According to the earnings materials, publishers engaged in rewarded video advertising span various experience sizes, including top 100 experiences by spending such as Brookhaven and Driving Empire Car Racing & Rivals. Fortune 500 brands are participating as advertisers, indicating enterprise-level adoption of the platform for marketing campaigns.

Brand Partnership Activations

The company highlighted several notable brand collaborations during the quarter. Travis Kelce participated in a live QA session within the Grow a Garden experience, demonstrating how celebrity partnerships can integrate with platform advertising opportunities. FIFA partnered with Super League Soccer, one of Roblox's most popular soccer games, showing sports brand engagement with the platform's user-generated content ecosystem.

Google completed its third campaign activation in under one year, with Google Play being the most recent collaboration. The frequency of these partnerships indicates sustained advertiser interest in Roblox's unique demographic composition and engagement metrics.

Monetization Strategy Expansion

Beyond rewarded video advertising, Roblox is implementing multiple monetization optimization initiatives. The company launched regional pricing in April 2025, enabling creators to offer geographically appropriate prices for in-experience game passes. According to the earnings letter, 40 of Roblox's top 100 experiences by spending had adopted regional pricing by June 2025.

Price optimization tools introduced in Q4 2024 allow creators to conduct A/B testing for in-experience items. As of June 2025, 44 of the top 100 experiences by spending utilize these testing capabilities. The company also expanded differential Robux pricing, offering more virtual currency to users purchasing on platforms with lower transaction processing fees.

Roblox launched Commerce APIs in Q2 2025 with Shopify as the inaugural integrated partner. The Approved Merchandiser Program bridges physical goods with virtual platform benefits, creating additional revenue streams beyond traditional digital purchases.

IP Licensing Platform Launch

The company unveiled its IP License Manager and Catalog in July 2025, featuring partnerships with major entertainment properties including Lionsgate, Netflix, Sega, and Kodansha. This marketplace connects platform creators with intellectual property holders, systematizing licensing agreements and content partnerships.

Baszucki described the initiative as "the future of how our large creator platform can connect with great IP." The licensing platform addresses previous barriers for smaller creators accessing branded content while maintaining IP holder control through approval mechanisms and content standards enforcement.

Genre Expansion and User Growth

Roblox reported 66% growth in spending within target genres including RPG, sports, racing, and battle shooter games compared to Q2 2024. The company continues focusing on these mature gaming categories to attract older demographics and higher-monetizing content types.

The platform's Cube 3D foundational AI model achieved significant performance improvements, delivering 7 to 8 times faster 3D object generation. Since March 2025, nearly one million 3D assets have been generated within experiences and Roblox Studio, demonstrating creator adoption of AI-powered content creation tools.

Executive Leadership Changes

Roblox announced that Manuel Bronstein, who served as a key executive for over four years, will depart the company at the end of September 2025. Bronstein helped build product and partnership teams during his tenure. The company also welcomed Naveen Chopra as Chief Financial Officer, succeeding Mike Guthrie.

Market Context and Industry Implications

Gaming platforms have increasingly prioritized advertising partnerships as traditional monetization models face pressure from economic headwinds and user acquisition costs. Roblox's partnership with Google follows similar initiatives with PubMatic for programmatic video advertising capabilities.

The integration of rewarded video advertising addresses marketing industry demand for authentic, non-disruptive advertising formats that provide value to users. This approach aligns with broader digital advertising trends emphasizing user experience and engagement quality over traditional interruption-based models.

The expansion builds on Roblox's previous advertising infrastructure development, including partnerships with measurement providers like Integral Ad Science and Kantar for brand lift studies. These partnerships enable sophisticated campaign measurement and optimization capabilities typically associated with premium advertising platforms.

Future Outlook and Implementation Timeline

Wells Fargo analyst Kenneth Gawrelski questioned the prioritization of advertising monetization and rollout timeline during the earnings call. Baszucki confirmed continued expansion of creator access to rewarded video capabilities while maintaining performance standards across different device configurations.

The company's approach emphasizes gradual rollout with comprehensive testing rather than rapid deployment. This methodology ensures advertising experiences meet platform quality standards while providing reliable performance for both advertisers and content creators.

Chopra noted that advertising monetization opportunities are enhanced by continued platform growth, suggesting that user acquisition and engagement remain primary strategic focuses. The integration of multiple monetization models creates a diversified revenue ecosystem that reduces dependence on any single income source.

Technical Infrastructure and Performance Optimization

The rewarded video system underwent extensive optimization to ensure compatibility across iOS and Android platforms, with particular attention to low-memory device performance. This technical foundation supports scalable advertising delivery while maintaining the platform's accessibility across different hardware specifications.

Google's advertising technology provides the demand-side infrastructure for advertiser access, while Roblox maintains control over user experience and community standards. This partnership model enables premium advertiser participation while preserving platform culture and user safety protocols.

The nearly 100 publisher onboarding figure represents significant creator adoption of advertising monetization options. This participation rate indicates that the rewarded video model provides meaningful revenue opportunities for content creators while maintaining user engagement within experiences.

Timeline

• July 2025: Roblox launches IP License Manager and Catalog with Netflix, Lionsgate, Sega, and Kodansha partnerships
• July 31, 2025: Roblox reports Q2 2025 earnings with Google advertising partnership update
• June 2025: Regional pricing for avatar items launches; 44 of top 100 experiences adopt price optimization tools
• May 2024: Roblox opens video ads to all brands through self-serve Ads Manager
• April 2025: Regional pricing launches for in-experience game passes
• April 2024: Roblox partners with PubMatic for programmatic video advertising
• Q4 2024: Price optimization initiative launches for A/B testing capabilities
• Q2 2025: Roblox Commerce APIs launch with Shopify integration

Key Terms Explained

Rewarded Video Advertising represents a fundamental shift in how gaming platforms monetize user attention without disrupting the core gaming experience. This advertising format offers players in-game rewards, virtual currency, or premium content in exchange for watching short video advertisements. Unlike traditional interruptial advertising that interrupts gameplay, rewarded video creates a value exchange where users voluntarily engage with advertising content to enhance their gaming experience. The model has proven particularly effective in mobile gaming environments because it aligns advertiser objectives with user motivations, creating higher engagement rates and better brand recall compared to forced advertising exposures.

Daily Active Users serves as the primary metric for measuring platform engagement and represents the number of unique individuals who interact with the platform within a 24-hour period. This measurement differs from registered users or monthly active users because it captures consistent, frequent engagement rather than sporadic platform visits. For advertising partnerships, Daily Active User counts provide advertisers with audience scale projections and help determine advertising inventory availability. Roblox's 111.8 million Daily Active Users creates substantial advertising reach potential, particularly valuable given the platform's concentration among younger demographics that traditional media channels struggle to engage effectively.

Bookings represents the total amount users spend on virtual currency and digital goods within the platform, providing a more immediate view of user spending patterns than recognized revenue. This metric differs from revenue because gaming companies typically recognize income over the estimated lifetime of paying users rather than immediately upon purchase. Bookings growth indicates user willingness to invest in platform experiences and suggests future revenue potential. For advertising partnerships, strong bookings growth demonstrates user engagement levels and spending behavior that attracts premium advertisers seeking audiences with demonstrated purchasing power.

Creator Economy encompasses the economic ecosystem where individual content creators build businesses around their creative output, supported by platform tools, monetization options, and audience engagement mechanisms. This economy has fundamentally transformed how entertainment content is produced and distributed, shifting from traditional media gatekeepers to democratized creation platforms. Within Roblox, the creator economy includes game developers, virtual item designers, and experience builders who earn income through player spending, advertising partnerships, and platform revenue sharing. The creator economy's health directly impacts advertising partnerships because engaged creators produce the content that attracts and retains users.

Regional Pricing enables creators to adjust prices for digital goods based on users' geographic location and local purchasing power, recognizing that global audiences have varying economic conditions and price sensitivities. This pricing strategy helps democratize access to premium content while optimizing revenue potential across different markets. For advertising partnerships, regional pricing demonstrates platform sophistication in market segmentation and user experience optimization. The capability suggests that advertising targeting and pricing can similarly be optimized for local market conditions, making the platform more attractive to global advertisers with diverse market strategies.

Average Bookings Per Daily Active User measures the monetization efficiency of the platform by calculating how much revenue each engaged user generates on average. This metric provides insight into user spending behavior and platform monetization effectiveness, combining both user engagement and willingness to spend money. Higher Average Bookings Per Daily Active User indicates either increased user spending or improved monetization tools and experiences. For advertising partnerships, this metric helps determine the value of the user base to potential advertisers, as platforms with higher per-user monetization typically attract premium advertising budgets.

Intellectual Property Licensing facilitates legal partnerships between content creators and established brands or entertainment properties, enabling the use of recognizable characters, storylines, or brand elements within user-generated content. This licensing mechanism bridges traditional entertainment industry business models with user-generated content platforms, creating new revenue streams for both IP holders and content creators. The licensing platform reduces legal barriers while maintaining brand control and content quality standards. For advertising, IP licensing creates premium content opportunities that attract both users and advertisers interested in associating with established entertainment properties.

Free Cash Flow represents the cash generated by business operations after accounting for capital expenditures necessary to maintain and grow the business, providing insight into the company's ability to generate excess cash for investment, debt reduction, or shareholder returns. This metric is particularly important for growth companies like Roblox because it demonstrates operational efficiency while funding expansion initiatives. Strong free cash flow supports continued investment in advertising technology, creator tools, and platform infrastructure without requiring external financing. For investors and advertising partners, robust free cash flow indicates business sustainability and continued platform development.

Adjusted EBITDA measures company profitability by excluding interest, taxes, depreciation, amortization, and certain non-cash expenses like stock-based compensation, providing a clearer view of operational performance across different accounting treatments and capital structures. This metric helps investors and analysts compare companies with different financing structures and accounting policies. For Roblox, Adjusted EBITDA fluctuations reflect the company's investment prioritization between growth initiatives and short-term profitability. The metric's inclusion of deferred revenue adjustments acknowledges the unique revenue recognition patterns in gaming businesses where user spending is recognized over extended periods.

Programmatic Advertising automates the buying and selling of advertising inventory through technology platforms that use real-time bidding and audience data to optimize ad placements and pricing. This automation enables precise targeting, efficient budget allocation, and campaign optimization at scale impossible through manual advertising buying processes. For gaming platforms like Roblox, programmatic capabilities attract premium advertisers who require sophisticated targeting and measurement tools. The technology enables integration with major advertising demand sources while maintaining control over user experience and brand safety standards, creating scalable advertising revenue opportunities that complement traditional platform monetization methods.

Summary

Who: Roblox Corporation announced advertising partnership expansion with Google, involving CEO David Baszucki and CFO Naveen Chopra during the July 31, 2025 earnings call. Nearly 100 publishers have integrated rewarded video advertising features.

What: Roblox expanded its Google advertising partnership with rewarded video functionality now live after beta testing, featuring eligibility expansion and performance optimization across iOS and Android platforms. The company also launched IP licensing capabilities and multiple monetization tools.

When: The announcement occurred during Roblox's Q2 2025 earnings call on July 31, 2025, with various initiatives launching throughout 2025 including IP licensing in July and regional pricing in April.

Where: The advertising partnership operates across Roblox's global platform, serving the company's user base while integrating with Google's advertising infrastructure for demand generation.

Why: The partnership diversifies Roblox's revenue streams beyond traditional Robux monetization while providing creators with additional income opportunities and offering advertisers access to the platform's engaged user demographics through non-disruptive advertising formats.