Roblox (RBLX) risk factors, 2025 10-K

Risks Related to Our Business

1. 01We have a history of net losses and we may not be able to achieve or maintain profitability in the future
2. 02Our business is affected by seasonal demands, and our financial condition and results of operations will fluctuate from quarter to quarter, which makes our financial results difficult to predict and may not fully reflect our underlying performance
3. 03We are subject to laws and regulations worldwide, many of which are unsettled and still developing, which could increase our costs or adversely affect our business, including preventing our ability to operate our Platform in certain jurisdictions
4. 04We experienced rapid growth in prior periods, and our prior growth rates may not be indicative of our future growth or the growth of our market
5. 05We depend on effectively operating with third-party operating systems, hardware, and networks that may make changes affecting our operating costs, as well as our ability to maintain our Platform which would hurt our ability to operate our business
6. 06We rely on third-party distribution channels and third-party payment processors to facilitate purchases by our Platform users. If we are unable to maintain a good relationship with such providers, if their terms and conditions change, or fail to process or ensure the safety of users’ payments, our business will suffer
7. 07The success of our business model is contingent upon maintaining a strong reputation and brand, including our ability to provide a safe online environment for our users, many of whom are children, to experience, and if we are not able to provide such an environment, our business will suffer dramatically
8. 08If we fail to retain users or add new users, or if our users decrease their level of engagement with our Platform, revenue, bookings, and operating results will be harmed
9. 09We depend on our developers to create digital content that our users find compelling, and if we fail to properly incentivize our developers and creators to develop and monetize content, our business will suffer
10. 10The lack of comprehensive encryption for communications on our Platform may increase the impact of a security breach or incident
11. 11If the security of our Platform is compromised, it could compromise our and our developers’, creators’, and users’ private information, disrupt our internal operations, and harm public perception of our Platform, which could cause our business and reputation to suffer
12. 12The expansion of our Platform outside the United States exposes us to risks inherent in international operations
13. 13If we are unable to successfully grow our user base, compete effectively with other platforms, and further monetize our Platform, our business will suffer
14. 14If we are not successful in our efforts to develop virtual platform-wide events or live experiences on our Platform, our business could suffer
15. 15Introduction of new technology could harm our business and results of operations
16. 16Our user metrics and other estimates are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may significantly harm and negatively affect our reputation and our business
17. 17We rely on suppliers for data center capacity and certain components of the equipment we use to operate our Platform and any disruption in the availability of data center capacity or components could delay our ability to expand or increase the capacity of our Platform or replace defective equipment
18. 18Some developers, creators, and users on our Platform may make unauthorized, fraudulent, or illegal use of Robux and other digital goods or experiences on our Platform, including through unauthorized third-party websites or “cheating” programs
19. 19We focus our business on our developers, creators, and users, and acting in their interests in the long-term may conflict with the short-term expectations of analysts and investors
20. 20We may require additional capital to meet our financial obligations and support business growth, and this capital might not be available on acceptable terms or at all
21. 21The popularity of our Lua scripting language is a key driver of content creation and engagement with our Platform, and if other programming languages or platforms become more popular with our developers, it may affect engagement with and content creation for our Platform
22. 22We rely on Amazon Web Services for a portion of our cloud infrastructure in certain areas, and as a result any disruption of AWS would negatively affect our operations and significantly harm our business
23. 23Our business and results of operations are affected by fluctuations in currency exchange rates
24. 24We plan to continue to make acquisitions and investments in other companies, which could require significant management attention, disrupt our business, dilute our stockholders, and significantly harm our business
25. 25Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited, each of which could significantly harm our business
26. 26Our results of operations may be harmed if we are required to collect sales, value added, or other similar taxes for the purchase of our virtual currency, for the sale of digital content, or purchase of physical goods, between our developers, creators, and users
27. 27We may not realize the benefits expected through our China joint venture

Risks Related to Government Regulations

1. 28Legal and regulatory restrictions on virtual currencies like Robux, prepaid gift cards and payment-related activities may adversely affect our Platform, experiences, and virtual items on our Platform, which may negatively impact our revenue, bookings, business, and reputation
2. 29We are subject to various governmental export control, trade sanctions, and import laws and regulations that require our compliance and may subject us to liability if we violate these controls
3. 30Changes in tax laws and unclaimed property audits by governmental authorities could have a material adverse effect on our business, cash flow, results of operations or financial conditions
4. 31Any developments or changes in federal, state, or international tax laws or tax rulings could adversely affect our compliance costs, effective tax rate, and our operating results
5. 32We are subject to the Foreign Corrupt Practices Act and similar anti-corruption and anti-bribery laws, and anti-money laundering laws, and non-compliance with such laws can subject us to criminal or civil liability and harm our business, financial condition and results of operations
6. 33We may incur liability as a result of content published using our Platform or as a result of claims related to content generated by our developers, creators, and users, including copyright infringement, and legislation regulating content on our Platform may require us to change our Platform or business practices

Risks Related to Intellectual Property

1. 34Claims by others that we infringe their proprietary technology or other rights, the activities of our users, or the content of the experiences on our Platform could subject us to liability and harm our business
2. 35Indemnity provisions in various agreements potentially expose us to substantial liability for intellectual property infringement and other losses
3. 36Failure to protect or enforce our intellectual property rights or the costs involved in such enforcement would harm our business
4. 37We use open source software as part of, and in connection with certain experiences on, our Platform, which may pose particular intellectual property and security risks to and could have a negative impact on our business

Risks Related to Ownership of our Class A Common Stock

1. 38The public trading price of our Class A common stock is volatile and could decline regardless of our operating performance
2. 39Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make a merger, tender offer, or proxy contest difficult, thereby depressing the market price of our Class A common stock
3. 40This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act, or any other claim for which the U.S. federal courts have exclusive jurisdiction
4. 41We do not expect to pay dividends in the foreseeable future

Risks Related to our Indebtedness

1. 42We may not be able to generate sufficient cash to service our debt and other obligations, including our obligations under the 2030 Notes
2. 43Our indebtedness could have adverse consequences to us

General Risks

1. 44If we are unable to maintain effective disclosure and internal controls over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations may be impaired
2. 45Any legal proceedings or claims against us could be costly and time-consuming to defend and could harm our reputation regardless of the outcome
3. 46Catastrophic events may disrupt our business
4. 47Our operations are subject to the effects of changing inflation rates and volatile global economic conditions