Gaming platform's rewarded video ads deliver 95% viewability across 1,000+ brands while mandatory age verification reveals 27% of users are adults - unlocking mass market advertising potential.
Roblox Corporation this week positioned its advertising platform for significant expansion after mandatory age verification data revealed 27% of verified users are over 18, according to the company's Q4 2025 shareholder letter released February 5, 2026. The demographic disclosure fundamentally changes advertiser understanding of the platform's audience composition, with implications for brands seeking verified adult audiences at scale.
The company's rewarded video advertising format achieved completion rates exceeding 90% and viewability rates of 95% across over 1,000 brands during the quarter. Roblox made the product broadly available following extensive beta testing that verified consistent performance across iOS and Android devices, including low-memory specifications.
"Our expanded portfolio of ad products, together with our growing age-checked user base makes us bullish about the long-term potential for mass market advertising on Roblox," according to the shareholder letter signed by CEO David Baszucki and CFO Michael Guthrie. While advertising revenue remains modest relative to the platform's $6.8 billion in full-year bookings, the verified demographic data creates new opportunities for advertisers.
Through January 31, 2026, 45% of the platform's 144 million daily active users completed age verification. Of those verified users, 35% are under 13 years old, 38% are between 13 and 17, and 27% are over 18. The age-checked data revealed a younger user base than self-reported information had indicated, but simultaneously uncovered "an even larger growth opportunity in the over-18 demographic," according to management.
The company estimates it currently reaches fewer than 10% of adults aged 18-34 in the United States each day. This cohort is growing at over 50% - more than double the rate of users under 18 - and monetizes 40% higher based on full-year 2025 data. For advertisers, this represents substantial untapped inventory as the adult user base expands while offering superior engagement metrics compared to younger demographics.
Hours engaged grew 88% year-over-year to 35 billion during the fourth quarter, providing the audience scale necessary for premium advertising partnerships. The platform reached 144 million daily active users, growing 69% year-over-year, with users spending an average of 2.8 hours per day exploring millions of unique games and experiences.
Magnite secured exclusive global rights to monetize Roblox's rewarded video inventory on January 6, 2026, establishing the supply-side platform as the sole programmatic provider for mobile in-app video advertising across 151 million daily active users. The agreement connects thousands of global advertisers to the gaming platform through existing programmatic workflows rather than requiring direct platform negotiations.
The partnership follows Roblox's earlier integration with Google's advertising infrastructure, which the company expanded in July 2025 with rewarded video functionality. Nearly 100 publishers onboarded to the platform's advertising capabilities during 2025, demonstrating creator adoption of video monetization models alongside traditional Robux-based revenue streams.
Magnite's integration makes Roblox's rewarded video inventory available through established relationships with demand-side platforms, trading desks, and advertising agencies. The mobile in-app environment presents specific technical challenges for video advertising delivery. Magnite emphasized its transparency and brand suitability controls align with Roblox's strict experience guidelines and tiered safety controls, helping advertisers reach appropriate audiences in trusted environments.
The rewarded video system allows game creators to offer players in-game rewards in exchange for watching short advertisements. This model provides non-disruptive advertising experiences while generating revenue for both content creators and the platform. Players voluntarily interact with advertisements to enhance gameplay, receiving in-game benefits in exchange for viewing sponsored content.
According to the shareholder letter, 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 participate as advertisers, indicating enterprise-level adoption of the platform for marketing campaigns.
The company this month launched Homepage Feature, a new advertising format that reaches users at the beginning of their platform journey where over 90% of traffic begins. The format capitalizes on high-intent discovery moments when users first access the platform, differentiating it from mid-session advertising placements. While incremental lift and discovery capabilities vary by campaign, the format's positioning at the traffic entry point provides brands with visibility during critical decision-making moments.
Native advertising capabilities expanded through improvements to the Ads Manager solution that help creators reach and retain users on the platform. These changes resulted in a greater than 40% reduction in cost-per-play versus the first quarter of 2025. The number of experiences using traffic-driving ads increased over 75% year-over-year, suggesting broader creator adoption of performance marketing tools.
For advertisers, the native advertising infrastructure enables campaigns focused on user acquisition and retention within the Roblox ecosystem. Creators use traffic-driving ads to promote their experiences to relevant audiences, with the AI-powered optimization reducing acquisition costs while maintaining engagement quality. The self-serve Ads Manager allows advertisers to create and manage campaigns, with programmatic buying capabilities enabling automated ad purchases based on specific criteria.
The mandatory age verification rollout beginning in late Q4 2025 fundamentally changes advertiser access to verified demographic segments. The global implementation completed in early January 2026 requires users to complete age checks to access chat functionality, creating a self-selected audience willing to verify identity in exchange for platform features.
For advertisers, the age verification system provides several distinct advantages over self-reported demographic data. Verified user information enables more precise targeting for age-gated products and services. Brand safety controls benefit from accurate age data, reducing risk of serving inappropriate content to minors. Campaign measurement improves through reliable demographic attribution rather than probabilistic age estimates.
The age verification rollout created expected short-term friction with a mid-single-digit headwind to engagement growth and a low-single-digit headwind to bookings growth during the implementation phase. Lost hours came largely from less-engaged users, according to the shareholder letter. However, the company launched enhanced matchmaking features that cluster users based on age and skill level, with additional products scheduled for deployment in coming months.
AI-driven matchmaking - enabled by the age-check initiative - improves social interaction quality by grouping players together in game servers to maximize communication affinity and encourage age-appropriate play experiences. For advertisers, this clustering creates more homogeneous audience segments with predictable engagement patterns, potentially improving campaign performance through better audience-content alignment.
The platform operates next-generation text filters, real-time multi-modal moderation, and continuous age estimation capabilities that supplement the mandatory verification program. Continuous age estimation uses additional signals such as play patterns, social graphs, and economic activity to estimate users' ages beyond the initial verification checkpoint. These layered verification and estimation systems create multiple data points for audience validation.
"We view our scale with young users as a valuable strategic asset," according to the shareholder letter. "The fact that we generated nearly $7 billion in bookings from our user base in fiscal 2025 demonstrates our ability to engage and monetize a young user base, without significant reliance on advertising." This positions Roblox's advertising business as a complementary revenue stream rather than the primary monetization mechanism, potentially reducing pressure for aggressive ad load that could compromise user experience.
The company intends to provide quarterly data on the distribution of age-checked cohorts going forward, providing greater transparency into the growing adult audience on the platform. For advertisers planning long-term campaigns, this quarterly demographic disclosure enables more accurate audience forecasting and media planning across the Roblox ecosystem.
Research conducted with Latitude in 2024 found that 75% of respondents were more likely to notice brands advertised on Roblox compared to other platforms, while 73% perceived brands advertising on Roblox as category leaders. Video ads led to significant increases in brand awareness, consideration, and user actions including visiting advertiser experiences or social media pages.
The platform established partnerships with Integral Ad Science for third-party verification of ad impressions and invalid traffic detection. Kantar collaboration offers brand lift studies to measure advertising campaign effectiveness. PubMatic partnership announced in April 2024 allows programmatic buying of ad space, streamlining campaign management for brands.
Fortune 500 brands participate as advertisers on the platform, indicating enterprise-level adoption for marketing campaigns. The company highlighted several notable brand collaborations during the second quarter of 2025, including Travis Kelce's participation in a live question-and-answer session within the Grow a Garden experience, demonstrating celebrity partnership integration with platform advertising opportunities.
The licensing platform launched in July 2025 with Netflix, Lionsgate, Sega, and Kodansha introduces authentic brand integration opportunities where creators build experiences around official franchises rather than generic brand placements. This intellectual property licensing infrastructure enables rights holders to generate revenue through creator partnerships while brands achieve deeper audience engagement than traditional display advertising provides.
The platform's measurement capabilities provide rights holders with performance analytics previously unavailable through traditional licensing arrangements. According to Roblox's financial performance, the company has developed sophisticated engagement tracking systems supporting its advertising and licensing operations. These measurement tools track user behavior within branded experiences, providing granular data on audience interaction with intellectual property and sponsored content.
Roblox increased its Developer Exchange rate by 8.5% in September 2025, expanding creator economics beyond traditional Robux-based revenue. The company's top 1,000 creators earned an average of $1.3 million during the full year, representing growth exceeding 50% compared to 2024. The Creator Rewards program launched in 2025 provides additional financial incentives for creators who drive high-value behaviors including retention and engagement.
For the advertising ecosystem, improved creator economics directly impact inventory supply. Higher developer compensation encourages continued content creation and platform investment, expanding the universe of experiences available for advertising integration. As creators earn more revenue through multiple streams including Robux sales, Developer Exchange, Creator Rewards, and now advertising revenue sharing, the quality and diversity of content increases.
Developer Exchange fees grew 70% year-over-year to $477 million during the fourth quarter, reflecting both the rate increase and expanded creator participation. The company views further DevEx rate increases as one of its highest-yielding investments for platform growth, recognizing that the creator economy's health directly impacts advertising partnerships because engaged creators produce the content that attracts and retains users.
Rewarded video represents a fundamental shift in the creator economic model by introducing advertising revenue as a complementary income stream. Creators implementing rewarded video features provide players with gameplay advantages, virtual currency, or exclusive items in exchange for watching advertisements. This opt-in model maintains user agency while generating revenue independent of direct player spending.
Content diversity strengthened during the quarter without large new viral experiences dominating engagement metrics. While top experiences like Grow a Garden, Steal a Brainrot, and 99 Nights in the Forest attracted substantial volumes of daily active users and hours, tenured experiences such as AdoptMe! and RIVALS demonstrated continued growth. Experiences outside the top 10 saw 68% engagement growth and 53% growth in Robux spending, both accelerating relative to the third quarter.
For advertisers, this content diversity mitigates concentration risk associated with viral hit dependency. A healthy "long tail" of content ensures advertising campaigns can reach audiences across varied interest categories rather than clustering around a small number of dominant experiences. The acceleration in engagement and spending outside top experiences suggests the platform is successfully facilitating discovery of diverse content, which supports varied advertising placements beyond flagship titles.
Publishers engaged in rewarded video advertising span various experience sizes, including top 100 experiences by spending. This distribution indicates that advertising opportunities exist across the creator spectrum rather than concentrating exclusively among the largest developers. Smaller creators can access advertising revenue streams that were previously difficult to monetize through direct player spending alone.
The platform operates over 400 AI models with significant applications for advertising optimization, discovery mechanisms, and audience targeting. Discovery improvements drove engagement expansion across the content catalog, with users engaging with over 24 unique experiences per month on average in 2025, up double-digit percentages from 2024.
Fourth-quarter improvements to the "Recommended for You" algorithm drove another double-digit increase in the number of unique experiences surfaced per million recommendations. For advertisers, improved discovery algorithms increase the likelihood that sponsored content and advertising placements reach users during high-intent moments when they're actively exploring new experiences.
AI-driven matchmaking - enabled by the age-check initiative - improves social interaction quality by grouping players together in game servers to maximize communication affinity and encourage age-appropriate play experiences. This clustering technology has direct implications for advertising targeting, as homogeneous user groups enable more precise demographic and psychographic segmentation than random player distribution.
The company deployed machine learning to analyze over 1,000 data points per ad request in real time, optimizing ad delivery based on user behavior patterns, gameplay context, and engagement history. This optimization infrastructure mirrors capabilities deployed across programmatic advertising platforms, enabling real-time bidding and performance optimization for brand campaigns.
Roblox Assistant automates repetitive coding and creation tasks, accelerating content production cycles. Faster content creation expands available advertising inventory as creators produce experiences more efficiently. Avatar Auto-Setup streamlines character creation. Cube, the company's proprietary 3D foundation model, recently gained interactivity capabilities enabling users to create functional 3D assets through text prompts.
For brand integration campaigns, these creation tools lower barriers to sponsored content development. Brands and creators can collaborate on custom experiences featuring products or intellectual property without extensive technical expertise or development timelines. The democratization of creation tools expands the pool of potential advertising partners beyond large development studios to include smaller creators and brands with limited technical resources.
Safety models include open-sourced technologies for real-time toxicity detection in voice communications (Roblox Sentinel for child endangerment detection), large language model moderation (Roblox Guard), and personal information protection. Facial age estimation technology supplements the mandatory age verification program. These safety systems directly support advertising operations by maintaining brand-safe environments and reducing risk of inappropriate ad placements near harmful content.
Auto-translation of text chat into 17 different languages and upcoming Real-Time Voice Chat Translation remove language barriers supporting global community interaction. For international advertising campaigns, automatic translation enables brands to reach multilingual audiences without developing localized creative assets for each market. A single advertising campaign can scale globally while users receive content in their preferred languages.
Roblox deployed several technical innovations during late 2025 including SLIM (Scalable Lightweight Interactive Models), which improves performance across all hardware enabling richer, more immersive experiences at high volume. The company expects SLIM to drive material improvements in engagement and session length.
Server Authority, essential for competitive genres like shooters, empowers creators to designate the server as the source of truth. This increases fairness and security while utilizing advanced prediction and rollback technology to ensure players experience gameplay with minimal lag.
Texture Streaming dramatically improves the perception of faster game joining by loading the most important textures first based on size, distance to player, and other signals. This improves memory utilization and content delivery network bandwidth by loading the smallest representation initially then gradually improving quality as devices can handle it.
Infrastructure and trust & safety expenses grew to $209 million in Q4 2025, 65% higher than Q4 2024. The growth was primarily driven by third-party cloud infrastructure expenses supporting increased traffic and engagement. In 2026, the company will continue migrating AI inference workloads from third-party cloud providers to its own GPU-equipped data centers.
The company began targeted infrastructure investments during the fourth quarter achieving a 10x efficiency improvement for certain AI workloads related to safety moderation, discovery, and content generation. Infrastructure roadmap priorities include expanding the resiliency of core data centers by adding a third location and continuing expansion of edge data centers to reduce latency, support new genres, and improve performance in fastest-growing international markets.
Daily active users outside the United States and Canada grew 79% year-over-year, while U.S. and Canada daily active users grew 32%. Hours growth was strongest in Asia-Pacific but included robust 41% growth in the United States and Canada. For advertisers, geographic diversification creates opportunities to reach audiences in high-growth markets where traditional advertising channels may face infrastructure limitations.
Monthly unique payers increased to 36.7 million, close to double a year ago, with year-over-year growth accelerating for the fourth consecutive quarter. While payer growth was particularly strong in international markets, the United States and Canada saw healthy 34% growth during the quarter. The expanding payer base demonstrates user willingness to engage in platform transactions, a behavior that correlates with receptivity to advertising and sponsored content.
Average bookings per daily active user increased year-over-year and was up double-digits in the United States and Canada. Regional pricing and pricing optimization tools expanded both the geographical diversity of the payer base and monetization per user during 2025. For advertising revenue models, these pricing capabilities could enable dynamic CPM adjustments based on geographic location and user purchasing power.
The platform's demographic distribution based on age-checked data shows 27% of verified users are over 18. This cohort monetizes 40% higher than users under 18 based on full-year 2025 data. The company intends to provide quarterly data on the distribution of age-checked cohorts going forward, providing greater transparency into the growing adult audience on the platform - critical information for advertisers seeking verified demographic targeting capabilities.
Consolidated net loss was $318 million compared to $221 million in Q4 2024. Adjusted EBITDA was $3 million compared to $66 million in Q4 2024. The decrease occurred despite strong cash flow growth because GAAP accounting defers the vast majority of Q4 bookings and associated payment processing fees over the estimated average lifetime of a paying user, which was 27 months during the quarter. Other operating costs including DevEx fees, personnel costs, and infrastructure expenses are recognized during the period.
Total cash, cash equivalents, and investments reached $5.5 billion as of December 31, 2025, an increase of $1.5 billion compared to the previous year. Fully diluted share count was 746 million shares as of December 31, 2025, an increase of 2% compared to the previous year.
For the first quarter of 2026, Roblox forecast revenue between $1.37 billion and $1.42 billion, representing 32% to 37% year-over-year growth. Bookings are projected between $1.69 billion and $1.74 billion, representing 40% to 44% growth. Free cash flow is expected between $560 million and $584 million.
Full-year 2026 guidance projects revenue growth of 23% to 29% and bookings growth of 22% to 26%. This reflects continued growth in daily active users and hours engaged while incorporating the expected impact of age-check initiatives. Given comparisons to the third and fourth quarters of 2025, revenue and bookings growth is expected to be higher in the first half of the year versus the second half.
Margins are expected to be flat to slightly down year-over-year reflecting investments in the flywheel - specifically higher DevEx rates and investment in infrastructure and safety, including marketing related to safety awareness. These investments will be partially offset by leverage in payment processing fees and headcount-related costs. Capital expenditures are expected to increase slightly reflecting investments in infrastructure including the addition of a third core data center and AI initiatives.
The company announced that 2026 will be the last year it provides full-year guidance. Starting in 2027, management intends to provide only quarterly guidance and updates on progress toward long-term goals, citing the inherent variability in the business from the difficulty in predicting viral growth timing and the discontinuous nature of the technology roadmap.
Gaming advertising standardization efforts advanced significantly when the Interactive Advertising Bureau released its Gaming Measurement Framework in June 2025. The framework establishes baseline and additional metrics for gaming advertising across display, video, audio and custom formats, addressing transparency gaps as over 80% of U.S. internet users identify as gamers.
The IAB framework specifies baseline metrics including impressions with CPM calculations, viewability measurements tracking in-view rates and time duration, unique reach indicators specifying persons, households or devices, and ad frequency calculations. Gaming platforms must support additional metrics depending on specific environments and advertiser configurations.
Custom advertising formats within gaming environments include branded worlds, integrations, sponsorships, playables, livestream/social content, skins/logos, digital goods/user-generated content and branded games. These formats support specialized metrics including session duration, user-generated content equipment rates, skin retention measurements and platform currency spending tracking.
According to Zoe Soon, VP Experience Center at IAB, "With more than 80% of U.S. internet users identifying as gamers, gaming is no longer a niche pastime relegated to teenagers in basements; it's mainstream entertainment with the potential to become a dominant force in the digital advertising ecosystem." The measurement standardization addresses transparency concerns that historically limited advertiser investment in gaming environments.
Previous IAB research from March 2024 found that 86% of advertisers consider in-game advertising a brand-safe environment, with effectiveness rated strongly across awareness, consideration, and purchase intent. The study revealed 40% of advertisers planned to increase in-game advertising spending, while 85% of advertisers viewed games advertising as a premium platform providing high-quality inventory.
Roblox's position within this expanding market becomes clearer through competitive context. The platform accounted for 3.4% of the global gaming content market at the end of 2025, with deeper penetration in the United States, according to Newzoo's Global Games Market Report. The company maintains an ambitious target of capturing 10% of the global gaming content market, which would significantly expand available advertising inventory for brands seeking gaming audiences.
The platform's growth trajectory significantly outpaces the broader gaming industry. According to Magnite's announcement, Roblox is growing eight times faster than the gaming industry overall. This acceleration creates substantial opportunities for advertisers seeking Generation Z audiences in moments of deep engagement, particularly as the verified adult user base expands.
Research from LoopMe found that gamers are more than three times as likely to be receptive to advertising in gaming environments compared to mobile web, according to analysis published in December 2025. This receptivity advantage combines with audience value and opportunities that remain out of alignment with current advertising investment in the channel, suggesting significant upside potential for gaming advertising platforms.
The broader gaming advertising infrastructure has matured substantially throughout 2025. Microsoft began testing free Xbox Cloud Gaming with ads in October 2025, featuring two-minute preroll advertisements. Samsung expanded its mobile cloud gaming platform to Europe in August 2025 with AI-powered advertising optimization, demonstrating growing convergence between cloud gaming distribution and advertising technology.
AppLovin reported 68% revenue growth in Q3 2025 fueled by gaming advertising model improvements, with revenue reaching $1.4 billion. The company emphasized that increased advertiser diversity represents a primary growth mechanism, creating substantial opportunity for improved targeting through broader category representation beyond gaming advertisers alone.
Who: Roblox Corporation, a gaming platform serving 144 million daily active users, announced fourth-quarter 2025 financial results and provided detailed insights into its mandatory age verification rollout.
What: The company reported 63% year-over-year bookings growth to $2.2 billion and 69% daily active user growth to 144 million. Mandatory age verification implemented globally revealed 27% of verified users are over 18, showing a younger user base than self-reported data had indicated. The platform expanded advertising capabilities through rewarded video, Homepage Feature formats, and programmatic partnerships while increasing creator economics through an 8.5% DevEx rate increase.
When: Fourth quarter 2025 results were announced February 5, 2026. The mandatory age verification rollout began in late Q4 2025 and completed globally in early January 2026. Through January 31, 2026, 45% of daily active users had completed age verification.
Where: The age verification rollout began in Australia, New Zealand, and the Netherlands before expanding globally. The platform operates worldwide with particularly strong growth in Asia-Pacific markets, though daily active users outside the United States and Canada grew 79% year-over-year.
Why: The mandatory age verification initiative supports Roblox's commitment to being the gold standard for online safety. The accurate age data unlocks long-term opportunities to tailor features and content, increasing safety and civility while driving organic engagement growth. The age-check rollout enables enhanced matchmaking, next-generation text filters, real-time multi-modal moderation, and continuous age estimation - features designed to accelerate engagement beyond pre-rollout levels while maintaining platform safety standards.
