Roblox Corporation (RBLX) Earnings Call Transcript & Summary

Welcome, everyone. It is so good to see so many familiar faces. We started on this journey over 15 years ago with our users and our creators and our technologists. And in the last 18 months, we've added many of you to our journey, and it's wonderful to see all of you. There's a lot of you out there as well online. A lot of our small investors, a lot of our Robloxians, who have invested in the company. So it's just so wonderful to be together today. This is a journey. It's going to be a wonderful journey. It already has been. It's a journey that we've been saying for 15 years is the creation of a new category. This is the creation of the evolution of the way people communicate of the way we tell stories, and we're looking forward to sharing this vision with you today. Now there are some companies that focus on innovation. There are some companies that focus on execution, we believe we need to do both to get to our vision of 1 billion monthly active users on our platform. And today, I'm really excited because I believe you're going to see both. You're going to see some of our groups that are very tied to direct business metrics. You're going to see a lot about what we shipped in the last year. You're also going to hear every group talk about a vision for the future and very difficult long-haul innovation, many of which we believe will ultimately be necessary to build this new category. So thank you for joining us. We're on a mission to reimagine the way people come together, and this mission started a long, long time ago all the way back when we first used to sit around the campfire and figure out how to tell stories. And telling stories has been a huge part of the human experience. We started to try to figure out how can we tell stories when we're not around the campfire. We invented drawing. We invented cave art. We invented oil painting. And all of a sudden, we started to see some magnification of this. How do we tell stories to a lot of people at the same time? We invented the written word. We started writing this down. We started distributing books and all of a sudden story telling could expand, but we're always looking for better ways to share stories. A long-tame photography and all of a sudden, a lot of us can tell stories, even if we're not great artists. And then over 100 years ago, we put together image and audio. We created movies, which has become such an amazing and rich storytelling medium today and is still advancing all the time. But there are 2 things we can't do when we go to a movie, we cannot jump in with our friends to participate in the movie and we can't communicate well we're inside of that movie. And that brings us to this new category of human co-experience of which Roblox on your mobile phone is 1 example where our amazing creator community that backs our technology supports amazing storytelling. Now in addition to consuming content and consuming stories, we all want to communicate all the time. This also started with the evolution of language. But along the way, we started looking at ways to use technology to communicate at a distance, the mail system, for example, allowed us to share and communicate overseas in towns, in different places. But even the mail system wasn't fast enough. We invented the telegraph to cut that 10 days down to immediate from coast to coast. But we couldn't all use the telegraph so long came on the phone. And all of a sudden, at least with audio, we could communicate around the world. This has continued to advance. We were not able on the phone to register human emotion or to share human expression. So many of us over the last 2 to 3 years, we've been on video and audio together. Once again, we believe, and we think it's going to show out over time, there is an evolution beyond this, which is immersive 3D simulation that just as prevalent as we feel phone and video is today, we ultimately will be what we use for a lot of our communication. What's interesting about immersive 3D simulation and what a lot of people experience on Roblox without necessarily knowing it is they're in the same place and they're together, which is absolutely amazing. And a lot of what people notice on Roblox, even though they might not think about it is we're able to do stuff together while we're communicating. For example, we can go explore outside. We can play high-end and go seek. We can graduate from high school in a simulation, much better than we can do on video. So we feel this is a natural emergence of the next generation of both storytelling as well as communication. It's going to happen. And our vision at Roblox is really to be civil ushers of this technology forward and to usher this in as it naturally happens. We're also very excited about our ability to innovate and drive many of the inventions that are going to be necessary to bring this new category forward. It is very, very early in this technology vision for us. We've been at it for 15 years. There are many, many more exciting inventions. And I believe what you're going to see today with our team as they come on board is just the amazing number of people we have driving invention within the company. I'm going to talk about several ways we grow. But before we kick it off, just a couple of highlights how are we doing for especially some of our newer investors out there. We've continued to grow both before the last 2 years in the midst of it, and you're going to see various ways we talk about our growth today. You're going to see us talking about daily active users. You're going to see how we translate daily active users into ours, which is engagement. And you're also, of course, going to hear from Mike, our CFO, about how we translate ours into bookings. We're really excited about the format today, and you're going to see a very logical connection between business drivers, retention, MAUs going to frequency, which gives us DAUs going to engagement per DAU, which gives us hours and they're going to bookings per hour, which gives us our bookings. And you're going to hear from some of the people leading some of the groups that drive some of these things. So let's take a step back. Here's what I'm going to cover. I'm going to take you on a whirlwind tour of where we are relative to about 1.5 years ago when we all came together and you joined us. This is exactly what we showed in our S-1 statement. And this is -- we referred to this as our 4 dimensions of growth. Two to the fourth power is 16, I think. So if we can double each of these, there's your 16x. And this is really quite feasible. We've talked about being around the world. This isn't something we talk about. We're right in the middle of it. We use the term all ages more than aging up now because this isn't something we have to do as well. You're going to hear that we're right in the middle of this right now, and we are an all-ages platform. We've been talking a lot about ultimately, this technology and this category for storytelling and communication supports a lot more than play. Play is a subset. This gets into how we work together, how we learn together, how we connect with others, how we consume entertainment. It really gets into many, many ways, and that's why we think this is a growth vector as well, and we're going to share some of this. And then finally, fourth in the row and fourth in a row very intentionally because we focus on delight, civility, engagement and growth, you're going to hear a lot about the richness of our economy and where that's going. So let's start off with around the world, and let's take a look at how we're doing. We're really, over the last 3 or 4 years, we've really just started showing up everywhere. We started in the U.S. In most countries now, we have a very significant presence of users, and this is showing all countries with more than 5,000 daily active users. We have users in many more countries than this. This has been growing primarily organically. So most of our user growth here is driven by our awesome platform, amazing content from our creators and good old-fashioned word of mouth, and it's happening everywhere. Let's take a look at a few countries that I think are really interesting. Brazil, last 4 years, 5x growth. No paid acquisition there, organic and continuing to grow and continuing ultimately to be actually a pretty good source of bookings as well as it gets so big. Couple other countries, both unique characteristics, India, 1 billion people, last 4 years, 15x growth in India, purely organically. And doing this in very difficult infrastructure, very difficult mobile form factor with the exact same app we use in the United States, which is, I think, a highlight to our technical teams how hard they have worked on app performance and on keeping our app lightweight. Japan, like South Korea, it's starting to go viral, 13x growth in the last 4 years. Interesting in that Japan is one of the top bookings countries for games and experiences. So a lot of good stuff to come. Now how is this happening? One way is both the amazing content that our creators have been creating. A lot of this content works around the world, coupled with our amazing technology, this is a partnership. Our machine translation technology, for example. We didn't have this until a few years ago. We experimented with it for a couple of years. It's gotten better and better and better all the time. And in Japan, for example, when our developers who do not know Japanese take their experiences, turn on automatic translation. So for people in Japan, it feels like it was built for Japan, we see an 8% engagement lift. Lots more opportunity here, once again, highlighting the vision that when people on our platform build something, they're building it for every country in the world. They're building it for every language and ultimately, they're building it for also a wide range of devices at one time. Another part of our vision, let's take a look at our infrastructure. We -- Dan is going to talk to you more about Infra today, but we have always had the vision that infra is a huge engine for not just cost but for growth. The more efficiently we run our infra, the more money we can move to the developer community and high-performance infra drives growth. We know lower latency, higher performance is super important. Let's take an example, data center in India, a huge commitment, but we believe directly correlated with a lot of the growth acceleration we've seen there. We believe, ultimately, we're building a global 3D immersive supercomputer to power Roblox. You're going to hear a lot more about that today. Next up, talking all ages. And when we started 5, 10, 15 years ago, people definitely were correct. When they said, "Yes, Roblox is a younger person's platform." But let's look at where we are today. We passed the point where the majority of the people on our platform are over 13. And you're going to hear from Mike, we're going to dissect this a bit by age cohorts. You're going to see the amazing growth we have in 17 and up. One interesting thing about 17 through 60-year-old cohort relative to 9 through 12, that's a much larger cohort. So when we do the math on the size of that cohort, the early place that cohort is today and the growth rate, it creates really an interesting vision of the future. People always ask, "Well, what did you do to drive older players on the platform?" What we did is about 100 things. And a lot of them have things that we've been doing for a long time, quality of our game engine, performance, search and discovery that you'll hear about and a lot of it you're going to even hear about today as new things, experience guidelines. Some of the experiences on Roblox, all ages. Some of them 13 and up, allowing more flexibility with our developer base. Let's take a quick look preview of what you're going to see from Anupam. I don't want to show the -- steal the show. But when a developer makes content for an older player, how do we find it? New content discovery automatically is something that has been a vision of us since 15 years ago. We always wanted a developer who creates an awesome experience even if it's only for a certain slice of users to have that get to the top of the charts automatically, this is how it works. New experiences that we detect have especially high engagement, even for a very specific cohort, could be older, it could be a certain country, we want that to come to the top of the charts. And more and more it is, and this is really supercharging our efforts to be a platform for all ages. You're also going to hear today about experienced guidelines. We talked about this a year ago. We shipped it on Monday. It's live everywhere. It's really exciting to start going on Roblox and seeing some experiences for all ages, some for 13 up. Here's a quick look at how it works. There we go. Developers fill out a survey, and we're starting to give parents control who want a lot of control to say, for someone in my family, I only want all ages experiences or only want experiences possibly for older players. Another thing that's supercharging age up is our spatial voice thing. You're going to hear a lot more about spatial voice because it's not just a thing, it's the way people are going to ultimately communicate on our platform. And we're ultimately mixing immersive 3D Avatar communication with the way to come together. Now I'm going to pretend, just for fun, we're a year or 2 in the future. We're all used to getting alerts on our phones, but I'm going to pretend, I just got a 3D immersive Avatar alert. And I'm going to go over here, and we're going to jump into a future Avatar call with Kiran and Mahesh, who are 2 of the creators of our 3D Avatar technology. Kiran, Mahesh what's up? Thanks for jumping in to this real live Avatar communication. How are you?

Hey, Dave. Nice to see you here.

Hi, guys. Take a look at this. I can finally move my ears.

Yes. So this is live on my phone. My phone is both watching me and listening to me, and we're starting to stimulate my 3D Avatar's response. Can you tell the audience a bit about what we're doing?

Yes. This is a new way to chat with your voice and Avatar on Roblox using real-time facial tracking. So let's be truly express myself. And it works across all devices, mobile and desktop and across all kinds of Avatar styles and Avatar accessories. I think I need to change my beard right now. That's perfect.

All right. Well, thanks for jumping in. That's completely live. That's on production Roblox right now. Thank you a lot, Kiran, Mahesh for jumping in on this. We appreciate it.

Thank you.

Bye. Bye.

Okay. So that's what the future looks like. And ultimately, that will be photorealistic. Ultimately, we'll use that at Roblox to connect with all of our distributed workforce. Ultimately, when we're in school and we can't dissect a frog in real life, we'll come together to do that in a simulation. So we believe you just saw a glimpse of the future, and that was a live demo. You're also going to hear, as we start bringing more older people on the platform, how to incorporate both our foundation of civility and safety, which has really been a cornerstone of the company with something older people on our platform absolutely want and that is more freedom. So as we build out our AI systems and our ML sister cohort. And then finally, you're going to hear a bit of a vision today about a vision we've had all the way since we did our iOS and mobile devices, where the future is everywhere. Our belief is strongly held that immersive 3D multiplayer simulated Avatar in the cloud, digital stuff is the new format that goes on every device, different camera controls, different UI, different levels of immersion, you saw me on my phone. We play on our laptops. This includes VR, it ultimately includes the living room. It, of course, includes game consoles. It includes a lot of devices just like HTML now goes everywhere with pinch and zoom on the iPhone. You're going to hear from Dr. Morgan McGuire, our Chief Scientist, about the vision of our simulation engine. I'm going to show you the spec for the future. It's quite simple. This is our engine spec, simulate reality at mega scale, both visually and acoustically to the point where we all feel we're going to that concept together. We can talk to the person next to us. It feels photo realistic, and we can wave across the stadium interactively at other people in the stadium. That's a pretty tough spec. So that's a lot of research. That's a lot of invention. We believe a huge part of our company has to be driving this innovation and invention. Okay. So we talked about connecting people around the world. We've talked about all ages. Let's talk a bit about our vision of playing, working, learning, connecting on the platform. Traditionally, this is going to supercharge our creator base. And we've started with a huge community of creators really around the world that are powering play, our creators more and more are starting to power education. They're starting to power music experiences. They're starting to power brands. And so as we build our technology, we're building a huge ecosystem of people making their living on our platform as well. One category that's really near and dear to me is education. And I want to share a little bit about the vision of education on Roblox. We're going to use 2 examples. The first example we're going to start with is FIRST Robotics, an educational partner who realizes that around the world, not everyone has access to all the parts and pieces and tools needed to build a robot club. So what have they built? They have built a FIRST Robotics robot creation simulation and what's amazing about this is many people around the world now have access to being part of a FIRST Robotics robot club. And unlike the robots, we maybe have made one. We or our kids were in a robot club, you can ride these robots. So it's showing the vision that what we do in immersive 3D ultimately can go beyond reality in certain cases. Another example that shows off really the platform nature of Roblox that I'm really, really excited about is the notion that not everything has to happen in Roblox studio. Millions and millions and millions of people learn to code in Roblox studio, but it's much bigger than that. And what code combat is starting to show is that an experience built in Roblox studio, just like what we think of as a game or a social experience can be a place we learn to code as well. And so we're going to see more and more distributed educational apps on top of our platform. Christina is going to come on board later today and talk about brands. Brands are driving amazing engagement with our older audience, and they're also finding really the next way to connect with their fans. Just as brands have connected on TV just as they've connected with banner ads on the web, just as brands have connected with video, we believe the future of the way brands connect is going to be immersive, experiencing a brand, and we'll talk a bit about that as well. Now we come to that fourth circle, vibrant economy. Highlighting once again, everything we've talked up till now is about driving growth, engagement, delight stability on our platform. There is amazing headroom in our economy to add economic rewards on top of our current DAUs and ours. Let's take one thing that Anupam is going to go through with today, that is the efficient frontier for discovery. Where we are today, we have never incorporated any economic signals in our whole search and discovery platform. Now we want to be careful. There's a certain purity to that, and we want to be very thoughtful about it. But we have many developers who may have equivalent engagement, equivalent play time with one of those experiences monetizing 10x as much. And we do want to take that in account when we think about discovery. So the efficient frontier is really a nudge to being thoughtful about what is the optimal mix for long-term enterprise value looking at 5 years of how we do discovery to mix engagement and bookings, ultimately. Here's how it looks as well, very similar to bubbling up new content. Some of these experiences currently are much more economically active than others when we do discovery. We're going to give them a little nudge in discovery. We've already done this to a small degree so far, and it's had amazing return. There has been a vision for over -- I think this vision has been around for 15 years of what is the next ad format? What's going to happen beyond video? Is there going to be a place and time when people can put 3D ad units throughout what we might call the metaverse and run these through a traditional ad server? Can a new movie for 1 day project brand advertising everywhere the day before their movie, can a brand who has an amazing 3D experience that, that brand wants to have millions of people visiting, can that brand consistently bring people who want to experience that brand to their experience? We're not talking getting in your way. We're not talking blocking you. We're talking native immersive things that a lot of the people on our platform are really excited about. A brand, for example, Vans. And this is what it would look like in action. Manuel is going to share a lot more about this, but this is a 3D ad unit. Today, it says Vans. Tomorrow, it might say Nike. This is a 3D ad system where we can change based on bids, but these are now 3D portals. And this will be ultimately an ad unit with amazing available volume within that 4.7 billion hours we have on our platform that we can dynamically route. The other thing you'll hear about a little from Manuel, I'm going to go quickly through it, is really we have just begun optimizing our economy. Our whole economy is moving to UGC, most of it already has. But optimizing for scarcity for rare items, we've just begun there. This is a very rare item on Roblox. It's called the Domino's Crown. We made it, and so we've been able to control scarcity. These items go for $20,000. So allowing our creator community to do the same thing. Ultimately, this is what it will look like. We will have rare items not made by us and doing this in a way that's economically makes sense is a huge opportunity for us. Once again, Manuel, will share that with you. Finally, let's do a quick check-in on our creator community. We had our developer conference here last week. It's the only reason why we have just such a huge space for you. We used it twice. Creator community has grown amazingly. When we started our developer conferences a few years ago, mostly U.S., Europe. Last week, we had Croatia, Finland, Philippines, Turkey, Venezuela, Argentina people really from around the world, arguably one of the most creative gatherings of 1,000 people anywhere in the world. And you're going to get a few fun stats from Nick today as we dive into this. We -- 3 or 4 years ago, developer number 1,000 was not making a living on our platform. And developer number 1 through 10, we're not running studios with upwards and over 100 people. So this economic engine has kept growing. And I want to highlight, it hasn't just been people on the top. This is the aggregate growth rate over 3 years of what our developers are earning on the platform, you can see the acceleration in the long tail. Nick is going to talk to you about creation, 2 big teams you'll see. One is how does a 500-person team work on Roblox? There are already 500-person teams working on movie special effects. How does that work on something like Roblox where they're building an immersive 3D experience, you're going to hear about that. You're also going to hear a lot about what we call creation everywhere. What creation everywhere means is in addition to all of the tools artists use to build the items in our UGC catalog. And by the way, there are a lot of artists building UGC items right now. What creation everywhere means is how do we all create? How do we take Roblox to the point where all of the creation we routinely do in our daily lives, we can do that digitally as well. My daughters use sewing machines, they love to build their own clothes. They're not going to use a 3D modeler to build Roblox clothes. But if they could use a sewing machine inside Roblox in a Roblox create everywhere experience, they're going to start creating on our platform as well and not just creating but ultimately selling inside Roblox, too. So we have a big show for you today. We're going to talk a lot about innovation. I'm hoping you see both execution excellence. For those of you that were here last year, hopefully, you'll come away and say, "Oh my gosh, I can't believe how much we've shipped in the last year?" And hopefully, you're also going to say, "Oh my gosh, there are -- I'm getting a glimpse of the big inventions that we have for you. Here's the agenda. You're going to get a bit of a view also as far as how we run the company. The breadth of what we're doing is really broad. Arguably, we're running a cloud infrastructure company. Ultimately, we are running a game engine developer environment company. Ultimately, we are running an economy. You're going to get a hint of the architecture we're using to run the company. And you're also going to see the nice balance, I believe, between heavily engineering-oriented as well as connecting with brands and consumers. Four of the people you're going to see today weren't here a year ago. And it shows the velocity of the hiring we're doing with absolutely top-tier talent. A couple of other highlights with Raj, with Anupam and with Manuel, you're going to see really groups that are directly tied to our business metrics. Our -- really, our user group really drives frequency retention. Our growth group drives for those DAUs engagement, connecting with great content and our economy group drives monetization for every hour in a growing environment, how do we drive bookings per hour. You're also going to see a lot of invention and creativity up and down the stack. And then we're going to take all of that engineering, both tactical as well as visionary and wrap it together when Mike Guthrie, our CFO, comes on board. So it's going to be awesome. Thank you. Great to see all of you. And leading off the next section, I'm going to invite Manuel Bronstein, our Chief Product Officer, to start making some introductions. So thank you.

All right. Good morning, and thank you, Dave, for the introduction. I'm Manuel Bronstein. I'm Chief Product Officer at Roblox, and I'm delighted to be here with you this morning. As Dave mentioned, you're going to hear today from our user group, our growth group, and I'm going to come back also to talk about the economy. These groups are responsible for the innovation that happens around how people interact with the Roblox app, how people discover new content and experiences on the platform, how people connect and communicate with each other and how we help the ecosystem monetize. Collectively, as Dave mentioned, these groups are responsible for user growth. They're responsible for frequency. They're responsible for engagement and are responsible for monetization. And you will hear each of these leaders speak about their vision, their core metrics and some of the elements of the road map and the work that they're doing in the next few months. So I want to bring over Raj Bhatia. Raj is our VP of Product for the user group. He's new to the company. I used to work with him. He's amazing, and he's going to tell you all about the user group. Raj, welcome to the stage.

Thanks, Manuel. Good morning, everybody. I'm Raj Bhatia. I'm the VP of Product for the user group. I'm really excited to be here this morning to share more about our work to welcome 1 billion users in the Roblox and to provide them with an amazing experience that keeps them coming back for more. Our focus in the user group is to expand our audience through access and sign-ups and to provide them with a high-quality, immersive social experience that increases their frequency and retention to the platform. We've got 3 main investment areas you see on the screen, and I'm going to talk about some exciting innovations across all of them. The first is our app platform, the starting point for all users into Roblox across all the devices and platforms that they use. The second is our social and communities portfolio where users establish meaningful connections with their friends and communities. And then our communications features where our users meet the talk, exchange ideas and coordinate their activity on and off the platform. Dave touched on this, but I want to visit it once again really quickly before we jump in. Grounding in the ecosystem and use cases are starting to see on the platform over the last couple of years, we're really inspired by what we're seeing. We continue to enable the cutting edge of 3D immersive play with a number of people coming to the platform for new immersive experiences is exploding. Fashion drops, concerts and home museum exhibits are emerging on the platform. Play, connect, learn, work, all of these human activities have historically evolved, moving through the mediums of text, audio, video and now on to immersive 3D. With these new mediums, new forms of communication and this explosion of new use cases, we're stimulating more and more experiences that represent real-world experiences. So it's only fitting that the platform must be accessible from any device and work everywhere that our users are. Along those lines, I'm super excited about this week's launch of our new Universal Desktop app. On Windows, the MS store and MAC desktops. This is expanded from our iOS and Android coverage of the universal app. Until now, our desktop users have discovered experiences, chatted with their friends, even edited their avatars in a web browser, separate from where our experiences are where the consumer experience is. The universal app has built the same architecture and infrastructure as our iOS and Android apps, and it's a massive upgrade for the 30% of people that use desktop to robots, to access robots. These users now enjoy high-quality, high-performance UX that is natively 3D, and it's built a top robot game engine. An example of where this shines is our Avatar editor. On the desktop app, the editor is now immersive, smooth, responsive it feels like you're actually there. And we're excited to see other 2D interfaces that we can imagine in this 3D future. I'm also really pleased to report that we have super positive metrics here for the users that are on this new desktop app and remind you, 30% of our users are on the desktop app. We're seeing total play time frequency and retention on the rise. And with that common code base, the improvements that we make here scale to more and more platforms. We all know that investing in performance leads to growth. The quality user experience means a better experience for users. We see improvements to frequency, retention and monetization anytime we invest in core quality and performance. And over the last 6 months, as you'll see on the screen, we've reduced app time significantly, and this is something that we're very proud of. These improvements also have an outsized impact on growth -- global growth markets as the benefits are outside on cheaper devices and slower networks. Dave spoke earlier about our growth in India, the universal app and the raw performance unlocks we get from its refinement, make that possible. That investment is also consistent with our vision to never bifurcate the app. So all users across the globe use one app that we're building. This is just the beginning, and we have a lot more interesting work planned here. So where is our app platform going next? We want everyone to be able to access Roblox. And while we're available across many platforms and devices today, there are platforms that Roblox doesn't yet support many devices and platforms that our current users and future users are on. We want to meet our users where they are. And in the past, content was rolled out and consumed centered around ownership or platform choice. Fast forward to today, users don't care about that. They want to be able to access their connections, their content and their experiences wherever they are seamlessly from whatever device they have. That's the end state that we're driving towards, Roblox being available on the multiple devices in our users' lives. We're excited over the next quarters to bring Universal App to consoles that we don't yet cover and to emerging form factors such as VR. We're really excited about the future that's unlocked with the universal app available everywhere. So with the universal app and platform expansion we have planned, we enable anyone with the device to participate in the digital world. Next, we want to make sure they have meaningful connections to share in the experience. And as we talked about before with all the experiences that are built on Roblox, people are coming together not only to engage with content, but to co-experience and hang out with each other in games, in concerts, on the couch, in the office, just like we do in real life. In the month of June alone, 475 million friendships were created in the platform. And we've seen that people -- when people connect with real life friends, their experience is enhanced and they come back for even more. What we've observed on Roblox is that when people connect and co-experience, with a real life friend in the first week, they have a 60% higher retention rate on the platform. And as Dave shared, our audience is aging up over half or 13 plus. We have a great opportunity in taking our social and community systems to the next level, and we're well on our way. Imagine a bunch of friends hanging out at the coffee shop and one of them hears about Roblox for the first time. They download Roblox and start playing, but they find it very hard to find their real life friends. We're [ now ] making it possible to find and invite their real life friends on Roblox via phone book contacts. And our users with their permission are making their real-world names available, so they know who they're connecting with the form an even stronger social bond. To date, Roblox has understandably approach this area with caution, given our focus on stability and safety. And the platform in spite of this has continued impressive growth. Our audience is aging up, and now it's time to invest here. So what you see on the screen is a run-through of our new contact importer feature. Notice how the real names and the user's phone book carry into the invite flow to add that real-world context. After the import, if your friends are already on Roblox, you can add them very easily with one click. And if they're not yet on Roblox, this flows seamlessly into an SMS invite flow. This experience is live and it's set to roll out more widely in the coming months. Next, to make it even easier for people to find other like-minded people on Roblox, we're bringing friend recommendations to the homepage. Our sophistication around matchmaking, the same system that we use to pair people when they go into games together, improves every day and opening this up to friend recommendations on the home page is going to ensure that people find meaningful connections to co-experience with. We're currently testing out this experience as well, and we expect it to roll out by end of year. And I'm really excited for this one. We've all had that moment where we discover an amazing spot in the world, be it a game concert, a podcast, a park, and we just wish a friend could be there with us. And this happens all the time in Roblox. People discover a new experience or one that's been around for a while, and they just know there's a friend in real life that would love to co-experience that with them. We're making this a reality on Roblox, and users will easily be able to invite users -- their friends into an experience using whatever social channels they prefer. And in Roblox fashion, we're going to give developers the ability to embed this into their experience, and they'll be able to customize it in ways that are appropriate for the experience that they've built with the creative and the messages that make the most sense. I want to call out that we're going to be taking a very intentional platform approach to this. These invites, they must be appropriate, they must be throttled, contextual and meaningful and not be spammy. So we're implementing very real guardrails to safeguard our users' experience to ensure that these are high utility and high relevance. Last but not least, Roblox would not exist without the communities that gather, create and co-experience. Recall last year that Guilded and their talented team joined us, and we have big plans for integration. I was really happy to be here at RDC over the weekend and met with a bunch of creators and developers and heard from almost all of them that they want to build their fan base and connect with them. I'm really happy to see that we're going to be giving them that ability to do it in the Roblox ecosystem. Not only in 2D but also in the 3D immersive environments and with the great social and communications features that Roblox is known for. In these communities, developers will be able to communicate updates and events, request feedback, pull their users, collaborate on a new request, and there'll be more to come in the coming months on this one. Great. So we're working on getting everyone with a device into our immersive environment, and they've got meaningful connections. Naturally, they're going to want to communicate with each other, enabled by some great technical breakthroughs and a growing 13-plus audience. We're at that exciting juncture where we're building the future of immersive Communication. And communication is the underlying thread that will bring 1 billion people together on Roblox. Frictionless, highly accessible and engaging communication will lead to higher frequency and audience growth. We envision a future where people can have very real conversations even when they may not physically be in the same room. What's missing from texting, voice alone from 2D flat video is the emotion, the body language and the expression and the feeling that you're together. We can provide that on Roblox. The first step towards this vision is helping 13-plus users communicate more freely. Dave previewed this earlier, but today, over 72 billion messages get sent on Roblox every month. And given our focus on stability and safety, our platform has leaned more restrictive, resulting in a lot of conversations getting filtered out for 13-plus, just like the one you see on the screen here. I'm really happy to say that we're changing the game here for verified 13-plus users, and we believe that enabling this group of users to communicate more freely will result in them coming back to Roblox more often for more of their communication activities. We'll be releasing this free version of chat for U.S. users 13-plus in the coming months. And towards our vision of immersive communication, voice is a massive step for us. Voice allows people to express themselves in the ways that they want in ways that feel real. Our technology for spatial audio allows people to be in experience and have that real immersive 3D sound around them, just like in real life. This rich way to communicate will during co-experience, increases the utility and frequency of the platform. So we started testing voice earlier this year with our verified 13-plus users who are also phone verified and have been hard at work at building out and refining our moderation and safety capabilities. The initial results are incredible. We have 87% of users opting into voice. On average, they're spending about 90 minutes a week invoice, and we have close to 1 million voice-enabled experiences live on the platform today. We're excited to announce that we'll be rolling out voice broadly to all verified U.S. 13-plus users by the end of this year. So what's next here when we combine all these aspects of communication, text, video, immersive 3D together? Well, you saw Dave's demo earlier, and that's the direction that this is all heading, using whatever device you have with a camera and mic available, we're able to deliver a real-time 3D immersive inmotive experience that seamlessly combines into a radical new form of personal communication. People are going to love this. And given it's going to be available anywhere users are, we'll start to see high frequency spontaneous interactions, complementing the deeper co-experience sessions we already enjoy in a platform today. So before I leave you, I just wanted to remind everyone -- actually, go back one slide, please. So before we leave you, I just want to remind everyone that people are coming together to play, to learn together, to connect. We're enabling a world to access Roblox from anywhere. We're enabling them to create real, meaningful connections and communicate in ways they never thought possible. I'm super excited we have -- I'm super excited about the headroom we have around DAUs and MAUs with the plans that we just covered to reach a wider audience and increase their frequency on the platform. Thank you very much. I'd like to next introduce Anupam, who is our VP of Engineering for Growth. Thank you, all.

Good morning. I am Anupam Singh, I'm the Vice President of Engineering for growth. I'm going to talk about how to take those communities of users that Raj talked about and connecting them with the right content. As the growth group, our main focus is engagement hours per DAU. We have to increase engagement for every daily active users that come to Roblox. Now that sounds a little abstract. Let's make it into a real opportunity. When you come to Roblox, the first thing you see is our homepage. On any given day, you will see that we have 229 million user sessions being initiated through the Roblox homepage. This gives us the opportunity to show them 1.2 billion options, which we call impressions. So every rectangle on that homepage is a piece of content that could be given, that could be used to connect our users to some amazing content. We baked this innovation down into 3 pillars. The first pillar is engagement. We already mentioned that. You heard from Dave about balancing monetization and engagement. And finally, as a creator, if you want to find your audience, the growth group and our innovation is there to help you. So let's start with personalization. What does personalization mean? You heard from Dave about our growth in Japan. The way we look at personalization is to generate unique pieces of content, to connect people with unique pieces of content. Here, you see that the user from Japan, a female user 25-year old, has a completely different homepage than a U.S. team. As a matter of fact, out of the 14 experiences that we are recommending to a Japanese user, 12 of them are different from the United States user. How do we do this? First, we take the signals that we all are accustomed to, age, country, gender. This is very common in Internet properties. But Roblox, unlike video, unlike a web page, is a very unique immersive experience and that's where we start adding new signals. So take the current homepage or take a homepage that was generated with age, country, gender, we add new signals, playtime, frequency. And within playtime, because it's an immersive experience, we have a lot more signals underneath. Now to consume all the signals, we have to continually iterate over our innovations in the personalization engine. So we've introduced a deep neural network, a machine learning engine that can consume signals at very quick rate that can continue to learn day in, day out. Now you might be curious, what's the impact of this hyper personalization. Let's say, you're a new user. Let's say this is your first time on Roblox.com. You come to our home page. Our goal in the growth group is to get you to interact with an experience in the first few minutes of getting to Roblox. In the last year, we've had 30% improvement where in the first few minutes of a user showing up on Roblox, we have gotten engagement with at least 3 experiences. Now that we have the user inside, now that we have the user engaged, what next? Dave mentioned this balance between monetization and engagement. In the last 2 years, if you look at the X axis on this picture, our engagement has grown. It's gone through the roof. We now have the ability to balance engagement with monetization. So if you have 2 experiences that have the same level of engagement, our personalization engine is able to make that trade-off using signals without any intervention. How does this work? Again, we go back to our core innovation, which is the personalization engine. We add a signal related to monetization. This one signal is actually many small features of how much Robux were spent in that experience, how many days did it take you to spend at Robux. And you'll see that we actually are able to change the ranking in our home page. So we got the users. We got them to engage. We have balanced monetization. You will see that Nick is going to talk about creators. Let's say you decide after coming here that, oh, I want to make some amazing content on Roblox. And you want to find your audience. Let's say you find that audience in the first day or so. Every one of our creators ask us this question, so how do I go up in the rankings? How do I get my content and connect to the right audience? Well, our creators don't have to do anything. As soon as we see engagement with a piece of content, our neural network picks up these early signals. As a matter of fact, every day, we consume 45 terabytes of this signal data to create the homepage for our users. And when we see engagement, those experiences are popped up into our homepage. Now these 3 experiences that you see doors, evade and raise clicker. Our experiences that were built only 4 or 6 weeks ago. Within 4 or 6 weeks, they have been able to get millions of daily active users. Doors is my favorite. It's got a lot of jump scares. I encourage you to go play. It's beautiful. It's awesome. And as soon as our system saw engagement, in the first few days, we were able to give it more and more and more audience. To the point that within 4 weeks, this experience was able to get 5 million daily active users, and that's not just one experience. We had that for evade. We had that for race clicker. And then the system keeps working to the point that in this just last year, every month, we have surfaced up to 20 new experiences on our homepage. So imagine every few weeks, we are able to get new pieces of content, connect our audience with amazing pieces of content. And just in this year, we have had 65 new experiences show up in the top 150 and that's the power of our personalization engine. So just to recap, what is growth at Roblox? Number 1 is engagement. Number 2 is balancing engagement with monetization. And Number 3, is getting creators -- new creators to connect with their audience quickly. Thank you very much. And I would like to bring back Manuel, who will now talk about economy.

All right. Thanks, Anupam. I'm glad to be back to share with you about the Roblox economy. So since before I joined the company, I was very fascinated by the sophistication of the Roblox economy. This economy powers a vibrant and growing community of creators all over the world and creators of all types. So in any given day, millions of creators create assets, avatars, experiences, models and plug-ins and they publish their creation to hundreds of millions of users all over the world. These users then buy Roblox that they used to self-express to progressing in experience or to invest in the avatars. Creators in churn earn those Robux, and they could decide to spend back in the platform to reinvest in their experiences or they could exchange these Robux for fiat currency to help them grow their teams and their earnings. Roblox captures value from this economic activity, and we use that to reinvest on our platform, our people, our infrastructure and to build on our nation. And we're seeing great, great momentum in this economy. In the last 12 months, we paid out $580 million to the community, that's a 29% increase year-over-year. And just in the month of June, 2.7 million creators were able to earn Robux on the platform, and that's 123% increase year-over-year. Earlier, Dave showed you a slide that was covering how different creators of experiences were increasing their earnings over time. The same is true for the people who create items and assets in the marketplace. As you can see from this slide, the #10 ranked creator earned $815,000 for a 72% CAGR over the last 2 years. And the #100 creator of assets on the platform earned $73,000 for a 639% CAGR. More and more people are able to earn more and more on the platform these days. So for our economy, the core metric that we use is bookings per hour. It's the best way to connect economic activity to engagement on the platform. If bookings per hours were flat, our total bookings would just grow with engagement. But if bookings per hours growth, as it has happened over the last years, you get the compounded effect, you get engagement growing, you get bookings per hour growing, and therefore, you get total bookings growing. And as you can see in the graph, since 2019, we have had significant growth that accelerated during the peak of the pandemic, but it's still above the baseline of 100%. And it's important that we don't just look at this blended number. If you think about the platform as a platform of scale with more users and more markets, the spending profiles of different users are in the same. You don't monetize the same way in all geographies, not all experiences monetize in the same way, not all users age, gender, device monetized in the same way. So we methodically look at this data to make sure that we're driving the right parameters in the business. And the work that you heard from Anupam on improving discovery and efficient frontier and monetization as we age up the platform and the work that the economy group does that I'm going to share with you helps increase bookings per hour. So today, I'll share 3 tracks of the economy that we used to improve bookings per hour. First, continuous improvements in our systems; second, the evolution of marketplace; and third, immersive ads. Let me start off with continuous improvements. This is the work that we do on a regular basis to improve our system. Think about how we improve payment flows, personalization, category expansions and more. Each of these optimizations may add a few percentage points or 5 percentage points improvements in bookings per hour. But compounded, as we do many of them throughout the year, you get a great, great impact in the economy of the platform. So let me share some examples. For example, in the last 6 months, we tested and introduced smaller robot packages on Android. This was targeting countries with lower purchasing power like Mexico, Brazil, India and more. And by doing that, we have a positive impact on payer conversion and in bookings per hour. Another example is the work that we continue to do on personalization. This will be an ongoing effort and a long-term investment on the platform. What you try to do with personalization, as Anupam mentioned, is you try to add more signals to the system so that the recommendations that we can make for users are better. For example, we can look at a user who tried on an item and didn't acquire it, but that's a signal that goes into a recommendation system that makes it better. As we continue to expand the product, we add more personalization to every category and every surface on the platform so that we can get better recommendations and improve bookings per hour. The last area that we started improving was adding more categories of content into marketplace. Our goal is that every user and every category of company is created by the community. Very recently, we added layer clothing, and we had more than 7,000 items created by the community, and those items have been acquired by more than 100 million people on the platform. In the very near future, we're going to be adding new heads with facial expression so that people can acquire them in marketplace, all of this created by the community. And beyond that, we're going to be adding user-created animations and user-created bodies as new categories of content that people can purchase in marketplace. In the future, we're going to be working on a few other things. We will continue to improve personalization on marketplace. As Anupam mentioned, we look at the efficient frontier. In the past, a lot of our optimizations in marketplace were geared towards improving engagement. Now we're adding more and more monetization signals to balance and find that efficient frontier between engagement and monetization, signals like the expected revenue that an item can generate? Or for example, how much [indiscernible] users having their wallet could influence the recommendation. And if you look at their spending activity, you can actually continue to do the recommendations to do better serving for those users. The Oracle feature that we're working on is the shopping cart. If you go to the outer store and you buy one item and you tried on and you get it and you like it, that's cool. But what we wanted to do is make it very easy for people to go and try on multiple items, find their internal look, their entire fit, combining things. As they are trying on these items, we can give them recommendations of items that actually match that fit and that look. And when they're done, they can press the button and buy 4 or 5 items at the same time. All of these things will continue to improve bookings per hour. Now let me move on to the next category, which is how we're evolving our marketplace. Our transactional economy is thriving. If you think about Roblox, this is a marketplace and on the platform where items have true utility. Think about it, millions of users come to the platform every day. They spend billions of hours every month. And when they acquire an item on the platform on Roblox, they can show it off. They can actually let everybody see what they bought. They can use these items inside experiences. They have true value and true utility. And these items and these transactions power this amazing community of creators. So as mentioned earlier, our marketplace is thriving. And you can see how 2 things are happening. First of all, we're growing the amount of money that every creator makes, but we're also growing the number of creators that are monetizing on marketplace. So now how do you take something that is really, really, really good? And how do you take that to the next level? Well, the first thing is we want to open up marketplace for more and more creators. As you can see in these slides, more than 92% of their marketplace revenue is coming from user-generated content created by our community. For the new categories like layer clothing, 98% of those category -- the content in those categories is being created by the community. Our goal is to make it such that every user in the platform eventually can publish, can sell their items and can earn. The second way in which we improve this marketplace is by bringing true market dynamics that resemble more the real world, like guaranteed scarcity or like trading and reselling, a self-optimizing publishing fee and free promotional items. I'm going to cover each of these so we get a better sense of all the innovation that is going to come to our marketplace. Let's start out with the scarcity. Scarcity allows for the creation of limited items or collectibles, brands, artists, creators on our platform can offer time-based or quantitative base limited items. And when you have that, these items then will accrue value over time because they become more committed. Now when you have collectibles, when you have limited items, you can then bring to the platform, trading and reselling. You can create a secondary market, where users can then take those collectible items or those limited items and sell them or trade them for a game. The cool thing that we're going to be doing too is that the creator of the original item will continue monetizing in secondary and tertiary transactions, and that's going to create a more vibrant economy on Roblox. Now the other part that is super important for us is that as we continue to open the marketplace to more and more creators, we want to make sure that we ensure that we have a healthy pricing in marketplace. More creators come in, more items come in, how do you guarantee that pricing is going to continue to evolve in a positive way. So we're building a system that will help determine the publishing fee of a given item based on the item type, the quantity, the price and other parameters. So as you're creating new items on the platform, you may get a suggest that you're going to get a publishing fee. And in the future, we may suggest a recommended price so that you have to not do the guesswork on how do I charge and how much do I charge for this jacket or these beetle shoes. And when you do something like this, it's going to help us to create new use cases in marketplace, for example, adding promotional items, promotional items are items that are free to the user, but the publisher of the item is paying for them. Creators could use promotional items to bring users into their experiences, think about acquisition costs. Brands can give away promotional items to promote new products or marketing campaigns. And we think that the combination of all these elements of a scarcity traded and resell, publish -- a dynamic publishing fee and, of course, the free promotional items is going to take marketplace to the next level. But while we have a huge opportunity in the transactional economy, we don't want to stop there. We want to invest in the next revenue source for our community and for Roblox, and we're excited to be working on immersive ads, as Dave mentioned earlier in his presentation. So what are immersive ads? Immersive ads are ads that are built natively from the ground up for 3D immersive shared experiences. We want this ads to be fun. We want this ads to be interactive. We want these ads, of course, to be safe. We want this ads to be nonobtrusive and we wanted to be privacy respecting. With more than 58 million users coming every day to the platform, spending billions of hours on Roblox, brands, experience creators are looking for novel ways to reach these users and interact with them. And one important thing about our ads is that we're going to be honoring our safety, culture and DNA, and immersive ads are only going to target users above the age of 13. So let me share the demo, and you saw this from Dave's presentation. The first format that we're talking about is called portals. Portals will allow advertisers to place an ad inside an experience and move traffic or funnel traffic into another experience. Think about hyperlinking but way, way, way cooler and more modern. A user will see a portal that may have video or a static image that is promoting the destination. They would walk inside the portal, show up in the new experience and they could easily come back to the previous experience. That's very important for experience creators. And we have a value at Roblox, which is respecting the community. That means that we want to put developers on control that whether they want to place these ads on their experience is going to be their choice. Where do they place them in their experience is their choice. And we're going to give them other parameters to control. At the same time, we will report metrics to them, payouts and key metrics for their ads impressions. We will also be reporting to advertisers. And one cool thing that we're working on a very cool innovation is how do you define a viewable ad impression in a 3D immersive world. How do you know that someone is looking at the ad, for how long did they look at the ad. Those are the kind of things that our teams are working on to put these systems in place. And I'm super excited that we're going to be preparing for a developer testing by the end of this year for portals and we're going to be launching sometime in 2023. As you look into the future, portals are just the beginning. When you start talking about immersive ads, creativity starts to flow. You sort of thinking, what are all the cool things that we can do here. You have an example of one format that we're thinking for the future, which is an innovative and immersive and interactive billboard. Imagine that you're walking in inside that experience, you see a billboard with a lot of items that you want to acquire. You touch that billboard, you can actually see the items in a carousel, try them on, pay for them, and you didn't have to leave the experience where you were at. This is going to be very powerful for people who want to sell inside very popular experiences. And we're excited also to bring this one into the future. So in conclusion, we have a huge opportunity in front of us. We have just scratched the surface of what it means to build a thriving and monetizing economy in these 3D immersive experiences. With our focus on efficient frontier, we will be balancing engagement and monetization, and that will help us continue to optimize our business. By supercharging our transactional economy with the evolution of marketplace, we're going to take it to step up, and it's going to have a compounding effect. And with advertising and new immersive ads, we're creating a new category, a new source of revenue for Roblox and for our creators and a new business overall. It's going to be very excited to see all these things land into the future. And now I want to introduce Christina Wootton, who's going to be chat in about brands in Roblox.

Good morning, everybody. I'm Christina Wootton, VP of Partnerships at Roblox. So excited to be here with you today to talk about future of brands on our platform. Now last year, I said every brand will have a Roblox strategy in 3 to 5 years. And I've never believed this more than I do today. We speak with brands and talent every single day. I've worked with them for many, many years. And I have never seen them so excited. They're brainstorming, they're collaborating. What I've seen in production right now, it will blow your mind. This is a new frontier for brands. It's a seismic shift, and I hope everybody is paying attention. Every day, you see new articles coming out, highlighting the importance of the metaverse for brands. In 2030, metaverse spending worth total of $5 trillion. This is where people are spending their time. And if CMOs and agencies don't pay attention, I mean if you don't engage those audience now, you will not be relevant to them in the future. And when I say this audience, you may be thinking just Gen-Z, but I'm talking about all ages, whether you're 16, 26, 60 plus years old, you're going to be spending time on this platform and doing things together. Every day, millions of fans come to our platform to engage and interact with their favorite brands, and brands are trying to figure this out. It's early, but some of the leading brands that are on our platform right now you're seeing here, they're innovative. They believe in the value of this platform because it's more than just reaching audience, it's about building a community. And these brands are bringing new users to the platform. They're promoting their activations off-platform with their marketing channels, so they're bringing their communities and their amazing IP. And they're creating persistent experiences, and all of this is driving traffic. This is driving expanding all ages to our platform. This is driving engagement and economy. And this is a massive opportunity, especially with what you saw from in well with immersive ads. When you come to Roblox, you may think that you go and you choose a game. But really what you're doing, you're looking for where your friends are and you're virtually teleporting to them, and you want to engage with your friends, you want to engage with your favorite brands. This will further enable that.So our partnerships team focuses on these main verticals: fashion, beauty, music, entertainment and sports. We're talking to some of the premier brands and some of the premier talent in each of these verticals, sharing the opportunity and just brainstorming with them, but brands do not have to work with our team to be on the platform. We're already organically seeing them, connect with developer studios and digital fashion designers. And every week, you're seeing sometimes daily new launches on the platform. So we're going to further enable this. We have tools like our Talent Hub, where developer studios and digital fashion designers can create a profile with more information on their studio, their capabilities, the experiences they've already built. And then brands can go on to our Talent Hub, and connect with them directly. And why is this so important? Our community have been on the platform for over a decade. They are the experts on this platform. They know it resonates well. So when a brand connects directly with them, they know how to authentically bring this IP to life. But I want to emphasize, this is so much more than gaming. On Roblox, you can do things like bring physical to digital. This is happening right now. This is Karlie Kloss, coming off Carolina Herrera's Fashion show at New York Fashion Week this week and her limited dress available on Roblox almost immediately. We have Tommy Hilfiger ahead of the fashion show this week at New York Fashion Week as well. There's a virtual portal between the actual runway show in New York to their experience on Roblox. The models are coming out. You can watch it no matter where in the world you are, you're experiencing this. This is really the value of the platform is that brands can take physical to digital, they can create digital and then how that influence what happens in the physical world. We're seeing this with products aren't even out yet, but you're getting feedback from your consumers and fans before that. Before movies and shows on production, you're storytelling with your audiences, you're building community. You're also allowing people to self-express using your IP and sharing experiences. So this is really enabling brands to push creative boundaries. And there's a variety of ways that brands are engaging on the platform. Typically, they start with virtual items. You want to enable your fans and audiences and consumers to express themselves with their favorite brands. And you've seen us with Nike, NSL, Warner Bros. and so many more. They're actually collaborating with our developers. Our developers have millions of experiences on the platform. They have a built-in audience. So brands are easily able to integrate their IP into those experiences. We also have limited time events. You may see this with concerts and launch parties where it could be live for 2 to 4 weeks. But no matter what path brands are looking at, they're all with the long-term goal is our persistent experience. And the reason why is they see this as their next immersive 3D social channel. Where you may see seconds on average done on a post on other social platforms you're seeing 5 to 10 minutes on average with each of those visitors and really engaging with them, you're getting real-time feedback. You're co-creating together and this is what's going to be happening more and more. So over the past 2 years, we've seen over 100 brand activations, and we are just getting started. Self-serve is growing quickly. Brands are connecting with developer studios and they're creating persistent experiences on the platform. Our immersive ad sense system is going to really drive this and support us. And this will continue to drive more traffic, engagement, all ages and our economy. And as we scale this, we'll be working more closely with developer studios, but also digital agencies. As they want to recommend us to their -- to all of their partners. I just like to take a moment and have every realized how special and unique of a time this is right now, and I'm so excited to be a part of it. Brands are trying to figure this out when the web came out -- they built a website. That's how they were engaging with their audiences. Then there was social media, and they were hiring internal teams, how we're going to work on our social media strategy. Right now, this is a revolution that's happening and we're all part of it. Brands are trying to figure out how do they more intimately engage with this audience. And millions of people are coming to Roblox right now to engage with their favorite brands. And just like they all have a website and a social channel, every brand will be on Roblox. And it's no longer a matter of if, it's a matter of when. So thank you very much. I want to introduce Dr. Dan Sturman, our Chief Technology Officer at Roblox.

Hello. I'm Dan Sturman. I'm the Chief Technology Officer at Roblox. And I'm going to take you through a few things. But first, I just want to summarize. You just heard about user growth economy. What we're going to go into now are kind of the underpinning the foundations, the way we create content and deliver it to users kind of behind the scenes, but they're equally important. I'm going to take you through safety and infrastructure. This could be our pleasure to have Nick Tornow, our Vice President for Creator, take you through the creator ecosystem. And then our Chief Scientist, Dr. Morgan McGuire, take you through some of the really cool tech at our engine. So with that, I want to jump right into safety. So we had this incredible community in our Roblox, 59 million daily actives. We're trying to grow to 1 billion users. It's people of all ages from like kids to grandparents. And I'm always amazed how many like I meet my dad's friends and like, oh, I know Roblox, my grandkids were on that. So there are a lot of grandparents on the platform. It's really an all-age platform. But not just that, they're from all parts of the world. They're in all sorts of different contexts. They could be with total strangers just enjoying experience. They could be with close friends, they could be with family members, and they're playing, they're working, they're hanging out doing all sorts of different things on the platform. Behind all this, we need to make this platform stay civil. It's so important to this incredible community having so much engagement. You wouldn't have this much diversity and engage on the platform if it wasn't a place people felt it was like stay in and they could enjoy themselves and they could be themselves. And that comes down to keeping it civil. This has always been a big differentiator for Roblox and one of our core value propositions, something we think about all the time. So how do we approach safety and civility on the platform? We do this kind of in 3 key areas: The first is content safety. As you've seen from Dave's talk, as you'll hear when we talk about engine and creator content of Roblox is quite different. It's 3D, it's interactive, it's social. It's our job to make sure all that 3D content is the right sort of content hub on the platform. For example, we don't allow objects that are intended to show heat towards a particular group, right? Makes sense. But we got to figure all that in real time and ensure the content stays safe. Next big budget is communication. Roblox is inherently a social platform, and we need to keep that communication open, communicative, but civil. So we don't allow profanity or most forms of profanity, so we're starting to loosen that a little bit to 13 plus, but definitely not bullying. We don't want people to come and feel attacked on the platform. That is not going to drive engagement. To drive engagement, they're having these great conversations with people you find really interesting and you're having a lot of fun. And the last big area is around user, and this is really about protecting your account log-in. I can't stress enough how important identity is on this platform. And the kind of physical realization identity where it all comes together is in your account, you don't want to lose your account. It has all the avatar items you've built. It has all your social connections. It has your money. It has your Roblox, right? And we need to make that account incredibly secure, but at the same time, do so in a way that it doesn't feel like you're logging into a bank or logging into Roblox? So you don't want it to be like this massive multifactor authentication and it's got to be really smooth and really secure at the same time. So we're doing this and we're doing all of this at scale. And the way we manage scale is through 2 main techniques. We have human moderators, but we try as much as possible to automate these processes and do detection. And that really requires a lot of sophistication in how we look at content from an automation point of view. And the scale is significant, 500 billion communications on the platform. This is from the first of the year until September 1 of this year. And that's a lot of chat going on, and we got to know that communication safe, again, of all ages. 425 million reach outs to our team around issues on the platform, or possible flagging of content, 470 million experiences reviewed or rereviewed. Every time one of our creators submit something, we need to make sure it's safe. And there's a lot of that going on in there constantly iterating. We got to keep up with that. 138 million assets analyzed. So an asset for us, it could be something as simple as a 2D graphic, but it's usually a 3D object and audio file, we need to make sure all of those are exactly the sort of our content or on the platform. And then from a login point of view, almost 3 billion logins over this time period this year. How do we know we're doing a good job? We do this through some core metrics. We've got 3 of them that are really important to us. The first is what we call the content safety rate. This is how close are we to that ideal that every piece of content is 100% right on the platform. Communication safety rate is the parallel for inter-user interaction, whether that is chat through text or as you saw with the voice, people talking to each other. And then we need to do all this efficient way. So efficiency is around speed, it's also around cost, but it's ensuring that we're really pushing the edge on that moderation automation, so that we can do this fast, quickly and cost effectively. And I want to call out while cost is good as if running a business, we want to do this well. It's also important because the faster we do this, the better we do this, the faster the turnaround, that drives engagement of our users. They don't want to sit around and have chats, for example, unnecessarily blocked. That's no fun for anyone. So the efficiency goes to 2 goals. It goes to, yes, cost, but with that comes incredible efficiency and then engagement. And then take you through a few examples of the sort of work we've been doing. I'm going to start with one of my favorites. This is around content safety. And I was recently asked by a group of our interns. If I could put aside the CTO job and just go work on any one project, what would I work on, this would be it. I think this is scientifically incredibly interesting and really important to our users. This is how do we take all this content, these experiences we get and figure out if they're okay. It's completely novel, and I think we're the best in the world of doing this because remember, these experiences, they're not just like a graphic like you would have in the web -- is that okay? That's a hard job, but it's been dealt with before. It's not a video where you can get a whole bunch of videos people watch them and like train a pretty straightforward [indiscernible] like figure out if that's working. We're dealing with 3D worlds. There are many perspectives in that world, you could be anywhere in the world and there's code behind all of them. And if someone is trying to be devious, you can do a lot of devious things with code, but we've been watching all this we've learned so much about this. And we have models that despite this complexity can understand the patterns behind behavior that is appropriate and not appropriate. It something we've gotten very good at. We've gotten so good at it that our latest models don't just flag a significant amount of this content automatically without a human reviewer. We're still confident in that call that we can take automatic action. So the content appears on the platform has gone in a matter of seconds. So we're getting really good at distance there. We're going to continue to push. I think you're going to find Roblox is the best in the world with this sort of 3D content moderation. Another area where we are very focused on goes to this user communication. And I want to take you through just briefly the things we're doing with the chat filter. So you saw a brief example before, but I want to explain what chat filtering is. If I'm typing to one of my friends, what we will do if something is inappropriate in that chat, we don't necessarily drop the whole chat, you don't get banned from the platform. We just kind of ex out, kind of the text going [bleeping] out inappropriate pieces of the content. So a good example I want to use here with users under 13, we're very careful with numbers. Why? Because numbers are a good way to give away ways to contact someone in real life, and we want to be really careful with that age group in that domain. So while we don't want even put a phone number up there, one friend saying another, "Hey, can you let me 20 gems so I can go by the silver crown, right? That's totally okay. And if we ex out that 20, it's really frustrating to those users. So how do we tackle this? What we're doing now is we say, well, what do humans do? Humans go and they can get the context of what's going on. That's where we're going with our automation. We're using advanced natural language processing models that look at the whole context of what's going on and make decisions based on that content. So they can understand the difference between a phone number, and "oh, I want 20 gems". And these models are working so well this year. We've actually reduced the amount of filter we've done significantly by a quarter or more, while at the same time, improving safety as we look at that exposure rate. So -- we're really happy with where this is going. We've done this in English. We've done it in a number of key language Spanish, Portuguese, French, German. And we think we have another 25% to go in English just this year. Then I want to talk a little bit about how we protect that precious user log, and that's so important to the engagement of our users. So here's our vision for this. It's going to be frictionless and the most secure login on the planet. Like we want both of those at once. So how are we going to do that? Well, here's kind of the picture. Imagine you've come to Roblox, you never used Roblox before. You install it, it's a real smooth install of that universal app we just talked about. You then just pick a user name or define one on your own, if that's what you want to do. From there, your devices -- we know your device is now secured. This is a safe place for you to log into. You just start using Roblox. As long as you're on that device, we know it's secure, at some point you might want to switch device. In which case, maybe you've given us a phone number, maybe you've given us an e-mail, maybe we had your biometrics in a way that's secure and privacy safe. We use that to authenticate the next device. But you're never stopping, you're never trying to remember passwords. We know increasingly, not just Roblox everywhere passwords are increasingly hard to remember, never long enough, appear on the dark web, are overused. They're not the best solution of this approach. So we're driving to this other world where it's just going to be frictionless and secure. And we think by doing that, again, it's just going to drive engagement. Where is this all going? I mentioned before how diverse our communities, and we think our safety models have to be equally diverse. So today, we do some things around 13 and under 13 over. When we first rolled out voice that was age-verified 17-plus just to start from a safety point of view. But we see taking these communities, and we understand these communities, each will have, to some degree, they're on safety standards, sometimes defined by Roblox, but often just like in real life, defined by the community you're in. Imagine 2 teenagers in real life. The way they behave, the shopping mall versus at school versus in their own home, very, very different. Only in 1 of those 3 places is okay to blast your music at top volume. And I kind of assume your parents aren't in the house as well, right? I have some teenagers. So I'm familiar with this. That sort of context would be really important. It's going to get even more complex. Am I in the United States. Am I in Europe, Am I in the Mid East, Am I in China, right? What does that all look like? So -- we want to build safety systems to understand not just the content, not just the communication, but what is the broader context those are in? And the ultimate virtue of this is we personalize it. So we learn about you and your context and what you're comfortable with. And in a sense, that model follows you around and ensures you only see the content you're okay with. So it's a long time coming, that's multiple years away. But that's the vision we're driving towards. And the automation I talked about here is all in line in that direction. So just to sum up on safety. Safety is one very much of our top priorities, one of our core values at Roblox. And we're driving to make this the best safety system in the world by being smarter, using efficient automation that both makes us more efficient from a cost point of view, but also make things faster and drives engagement. So the safety system is just behind the scenes and not interface. And we're doing this across content, communication and that precious user logging. So that's safety. I'm now going to jump into infrastructure before we go over to Nick and creator. So our infrastructure system is primarily owned and operated by Roblox. We do use some public cloud, but the majority of what we do is on our own owned data centers and worldwide grid. And this is important for us because our requirements are little bit -- are very unique. And there's something we feel that if we build ourselves, we'll deliver the best possible product to our users. Remember, we're doing 30 frames per second, 60 frames per second graphic 3D immersion. How we connect to the user, how we manage that flow of data to them is very unique to Roblox just using off-the-shelf set of data centers and so on has not been the best solution for us. In particular, we need to be able to do this in a way, it scales, of course, every large company wants to scale is reliable within this context. Performs well in this context and again, optimizes cost. And cost is important again for 2 reasons: one, remain in a business that's important. But two, the more we control the costs here, the more flexibility we have on how we reward our creators and ensure those dollars can go into their pockets, making it possible for them to go create even more awesome content on the platform. So we get this virtual cycle. One way to think about it is, is this really specialized unique revenue model behind a 3D cloud provider. That's how we think about ourselves. And it's -- as I go into some examples, you see that's how our users use us. Our measurement and infrastructure are 2 core metrics. One is around our uptime, ensuring that we are up and serving our users and serving our community and the second is cost per engagement hour. So I'm going to start by talking about how we scale and particularly how we scale at the edge. I talked about the edge a lot when I talk about infrastructure because this is where so much of the magic is. We know where our users are and that connection from device to our edge data centers is so-so important because that's really going to determine the speed at which you experience Roblox. Like I said, there's a lot of interaction. These experiences are all multiplayer, stuff's happening all the time. If that gets lagging, the experience is just a lot less fun. So we're always thinking about our edge here. We also have what we call core data centers. This is where all our data processing goes on to all our core APIs are managed. All that safety work I was talking about that all happens inside the core data centers. So on edge data centers, going back to 2019, we had a modest rollout at 16 data centers, about 7,000 servers on the edge. One thing I'll mention also, these edge data centers they're mostly stateless. They run these game servers. Morgan is going to take you through in more detail what is actually going on and why this way of serving 3D content is such an advantage for Roblox and something we do very uniquely. If you fast forward to 2020, we're now at 19 edge data centers. You start to see we build another one in Asia, in particular, we're at 10,000 servers. Going forward to 2021, 23 edge data centers, building more of them, 12,000, almost 13,000 servers at this point. Fast forwarding to today, we're at 24 edge data centers, 15,000-plus servers on the edge. And Dave called this out before, we're very proud of what we did in India. By dropping an edge data center in India, we dramatically improved the latency to those users, and we saw a corresponding jump in engagement in that country. I mentioned our core data centers. This is where our key data processing goes on. We now have 2. One of them was built just in last year. One is in Chicago, Illinois, the other in Ashburn, Virginia. This is where we store all our data in conjunction with using some data capabilities from the cloud providers, about 118 petabytes of data in our systems, 60,000 servers in the core systems. And then one of our biggest leverage is on the network itself. I keep talking about how important performances, but also scale, reliability, cost, all these things come together better. We're able to lay down our own fiber network. And we've been doing this consistently and it's driven incredible results. We manage over 3 terabits a second of traffic through Roblox's network. And this -- we do this at a level we think of much higher reliability and definitely better costs than we could do over the open Internet if we're doing standard transit. We've grown this over 250% since 2019. But then take it from the other point of view, what does this look like to our creators. And this is what's so awesome about Roblox. All they see is if you like this. This is Roblox's Studio. Nick will take you through a little bit about Roblox's Studio, but the main points are here is some simple Lua scripting and some 3D object creation. They have no idea this entire complexity is document. They have no idea that we might take this experience and scale it to 1 million concurrent users worldwide or even more in the course of the day. So they get this really simple. I'm just going to focus on my creative ideas, and then we do the hard work through this infrastructure of deploying it worldwide and ensuring the performance is there. They don't have to tweak that. I want to mention reliability, but this is something that's really been a focus for us over the past year. So I'm going to talk about our core data centers because like I mentioned before, our edge data centers are stateless. They're a little bit easier to recover. We can fail over between them in a pretty straightforward manner. What we've been focused on lanes been the core data centers. And a year ago, we were at a point where we were singly homed in that Chicago data center. We realized this was an exposure. It wasn't the right way to serve our users. So we've since moved to Ashburn, and I'm very pleased to say we're now at a point where we can manually fail over if we have to, from Chicago to Ashburn. We have their 2 duplicate systems. But we want to go beyond that. We're removing this direction that we're calling active, active cellular data centers. So I want to unpack that for you, what it means it's a very kind of technical sounding term, but it's really not that complex. Active, active means both data centers are serving traffic at the same time. This is where we want to be over the course of the next few quarters. So the idea here is if we lose one data center, it's not a manual fail over, it's the systems just self-calibrate self-correct and failover to the second data center. So you're talking order of milliseconds, much faster than a human being could do it. The cellular part of this is taking these large data centers we've built and bringing them to smaller failure domains that is isolated from each other as possible physically. And in doing that, it means the unit of failover is much smaller, which will speed up failover, make it much easier to do, have less noticeable impact to end users on the system. There's another benefit of this approach as well, though, that in the quest for reliability, which this gives us, it also drives efficiency. And I'll walk you through a quick build to kind of give you an idea of the math behind it. I tried to keep this pretty straightforward, but I only understand where we're going. So if we talk about we're at 1 data center, we'll call this the base case. We have no redundancy. In this layout here, we're saying we have 100 servers just for illustrative purposes, and we can say they're in data center A, but you can imagine that being Chicago for us. So we have 100 tunnel servers, 100 that are actively serving traffic at peak. We have nothing in reserve. So let's agree it's as efficient as we could be. But if you have a failure, that's not so good. You lose all those active servers and you're down. So we built Ashburn. That's the 2 data center model. And this gives us the redundancy we've been talking about. We have 200 total servers. We only need 100 to serve our traffic at peak. This is great. We had that resiliency. And so if we have a failure, we lose 100 of them, but we just keep chugging along. Challenge with this is if you see the dollar per player hour that doubles for that. We're using twice as many machines just so that we can be safe. So that's not ideal. So let me go to 3 data centers to show the trend, but you can imagine how this gets better over 4 and 5. Now let's say, we have 3 data centers, and we can make these any sizes we want. So now we have them at 50 servers each. They're not quite as big. We have 150 servers total. We still only need 100 to serve the traffic. We have 50 in reserves. If we have a failure, we lose the reserve, we keep serving, but now the cost only goes up by 1.5 over the nonredundant base case. And as we go to 4 and 5 data centers, this gets better. In fact, I have a little graph for you here that kind of shows where we are. We spent a lot in the past year to build out this redundant data center. But that's just kind of a peak from a cost performance point of view. We're going to be getting better as we move to 3, 4, possibly 5 data centers over time, and it really starts to take the edge off that while ensuring really good redundancy, really good failover. I want to talk a little bit about performance as well. I mentioned the India example. We have seen consistently when we improve latencies to our users by putting edge data centers in place. And this is all latency versus time here. We see jumps in engagement. We've seen that in India. We've seen that happening in Japan, things getting so much better there. We've seen in the Philippines. We've even seen that in Egypt that as we put these data centers and positions where their network connectivity is much better. We see that come through better performance and that leads to better user engagement. And better user engagement, that means better user retention and better user retention means better user monetization. They're all connected. So we're doing something that, yes, we have to spend to put an edge data center in place, but we're almost always getting that ROI very quickly in the form of how the users behave, their loyalty to the platform and how the system monetizes. So with that, I want to give you that quick view into our infrastructure vision and where we're going. Again, we are taking a somewhat unusual path of focusing on building our own infrastructure where we're doing this because we're seeing that only by doing that, can we, in the long term, get the scale, reliability, performance and cost that we think we need, given the unique workloads we have at Roblox and given our unique relationship with our creator community. And how we're being this cloud provider, we really have to be incredibly efficient so that they can be successful. So with that, I want to thank you. I'm going to in a minute, turn it over to Nick Tornow. But first, we have this really cool video that give you some insight into what our creator community is like. [Presentation]

Wow, that was amazing, as Dave mentioned earlier, just this past weekend, we had our annual Roblox developer conference in this very form. And as I watch and listen to this video, it's almost like the passion and energy of our creators is still echoing through these halls. And even though today is perhaps a more formal events. It's my -- I'm very excited to be able to share with you why this is such an important time for our creators and also for Roblox as a company as a whole. My name is Nick Tornow, I'm the VP of Creator Engineering here at Roblox. And today, I'm going to share with you how we are building and supporting the largest experience creation community the world has ever seen, and how with investments, we believe we can dramatically increase both the number of creators on the platform and the quality and breadth of the content that our users consume. In Creator, our vision is to allow creation of anything, anywhere by anyone. If you can imagine it, you can create it on the Roblox platform, and we're well on our way. Every day, hundreds of thousands of creators published more than 60,000 experiences onto the platform over the last 5 years, more than 12 million creators have earned more than $1 billion. As you've seen earlier in the presentation, there's a tremendous amount of growth in the platform. This is creators earning Robux per month. You can see dramatic increases here. And you have also seen that even when you split this by the top 10, top 100 and top 1,000 creators on the platform, there's growth in each segment and the growth in the top 1,000 is more than 4x the rate of growth of the top 10. Now I just want to underscore what this means from a creator ecosystem perspective. What this means is that we have a more diverse, a broader and more diverse group of creators building on this platform they're creating a broader and more diverse set of content for our users. And that's appealing to a broader and more diverse set of users for us as a company. This is a big deal, and we believe we can continue this trend by making it easier and easier to build on our platform to make it easier and easier to introduce new types of content to the platform and by surfacing to our users the content that they will love. I want to take a step back here very briefly to just describe how all this works. So Roblox is a vertically integrated platform, we have a global set of data centers. We have POPs a network that connects them all on top of this, we have an identity and social graph system. There's a multiplayer engine, which you're going to hear a lot more about soon, and we have cloud APIs. We have a huge audience consuming and working on this platform and then our creators build on top of this. So what this means is that our creators get a lot out of the box. I call it the [ "real box"], and that is not an official term. Some examples of what creators get here are things like distribution, analytics, safety, security and so much more. What does this leave for our creators to do? Well, they can focus on creation. They can take the things in their mind, put them into studio and with a single click of the button, they can publish it on top of this platform. We'll distribute it globally across different platforms like iOS, Android, Mac, PC and Console. And we'll show it to users -- we'll watch how the users engage with that content, we'll analyze it with our analytics system. If needed, we'll scale the system, if needed we will do financial transactions. And at the end of the day, what comes back to our creators is earnings and feedback. They can use the earnings to grow their team, maybe build a whole company. They can use the feedback to make their creations even better. And then again, with a single click of a button, they republish the next version of their content on top of this platform [indiscernible] repeat, everyone wins. Now in addition to the tool chain and the vertically integrated platform, we're also building a community. Now having a vibrant community is good for us as a company because we've got lots of input, ideas, creative energy for what we are doing with our platform. It's also good for the community itself. They help each other. They help each other with information. And very importantly, and I'm going to talk a little bit more about this later in the presentation. They help each other with tools and technology. And this is increasingly important as we build more and more advanced worlds. And this is facilitated by our creator marketplace product. Again, I'll talk a little bit more about this a little bit later. And of course, it almost goes without saying, but this is all good for our users who are getting more content, better content from this large community. When they come to Roblox, they can find amazing things for them. Now nurturing all of this, we have a robust and tightly integrated dev relations team. We have creator events like RDC, which we were just speaking about, and we have programs to encourage new and innovative work on our platform like our game funds and our education funds. Our broader vision and creator is broad and compelling will allow creators to build megascale lifelike worlds, built by teams from 1 person to hundreds and working in the way that best suits them. Today, we're going to talk about each one what we shipped in the last year, what we're shipping in the next year and what lies beyond. We delivered a lot in 2022, and I'm just going to highlight 3 key areas. First off, I want to talk about studio. So if you think about how we will create megascale lifelike worlds, we're going to need great tools. Every day, hundreds of thousands of creators use our studio product. This means when we introduce new features and capabilities on our platform, and we build them into studio. It gets in front of our creators, this large creator community very, very quickly. And then they can turn around and publish these new amazing capabilities to our users almost overnight. As such, studio is a point of dramatic strategic leverage for us and we invest heavily in making it great. In fact, we believe it can be the largest development environments in the world. Now we're constantly innovating on the service -- on the surface with regular releases, but I just want to highlight a few recent ones. So right now, we're rolling out some major enhancements to the design of studio and that includes a new iconography, high DPI images for high-resolution displays and customizable widgets, like ribbons and dockers so that creators can easily customize their workflow and be more efficient. All of this makes creation on the platform easier. Second, a key part of work on studio has always been its collaborative nature. So this year, we made collaboration the default way that creators interact with their experiences. So if you create a new experience in Roblox, it's created on the cloud. Studio connects to the cloud, and you work there. Now with a single click of a button called collaborate, you can invite your friends, any connections you have on Roblox to co-create with you. And this is incredibly important as we think about larger and larger teams, larger and larger worlds they will increasingly be built by large groups of people. We want to make that on-ramp from 1 to 2 to 100s as easy as possible. All right. Next up, as Dave mentioned in his kickoff, -- our vision is to connect everyone around the world, all countries, all ages, all types of things we would do. Now the studio tool that we were just talking about and our cloud APIs support this. However, it's also important for us that the platform remains very safe. We're going to have increasingly diverse sets of content deployed upon the platform, more and more types of content. We want it to be safe. We want people to know what is in experience before they enter and we want parents to be in control of what their kids are able to see and experience on the platform. And this is what experience guidelines is all about. So in experience guidelines, we have some additional information on every experience that shows a preview of what you'll see and what you'll experience when you enter this experience, if you so choose. Additionally, there's age guidance, and you as a user can make a decision, an informed decision about whether you want to enter into this experience. And as a parent, you're provided with granular controls about what you want your kids to be able to do on the platform. Now this is a really foundational and critical investment for the company because it lays a structured framework for us to bring in even more types of content into the platform and do it in a safe way. All right. I mentioned Game Fund a little bit earlier in the presentation. And just to reiterate, we're constantly building new and amazing types of content into Roblox. And we want to find ways to get that in front of our users fast so we look for creators that really want to adopt quickly, get it out in front of our users quickly and we partner with them and we help them make that happen. Now -- some examples of things you'll see in our current crop of Game Fund games would be things like enhanced graphics, social capabilities. And importantly, we also have some large studios that maybe traditionally haven't built games on Roblox coming to the platform. And this is really leveraging a lot of our tools to make it easier for large teams to build large games on Roblox. So behind me, you can see just a brief sampling of what is coming from these new experiences in our Game Fund program, and we couldn't be more excited about getting these in front of our users. All right. Shipping over the next year and building on the steps that we already talked about, we're shipping a lot. I just want to highlight 3 key areas. So first up, let's talk about packages. So packages are the way that creators share content. Now if you think about like a very complicated experience, perhaps like a city or something like that, city would have, for instance, cars, buildings, streets so much more. We want creators to be able to focus on making amazing cars. Other creators props to focus on making amazing buildings and someone maybe doing city planning higher up, hopefully. And basically, what they'll do is they'll put parameters on, for instance, the car, we could change the color or something like that. So there's a higher level interface that's produced on top of these building blocks. And so this is how software within the systems within the Roblox platform will become more sophisticated over time. I want to note that packages can contain packages. So perhaps an experience started as a city builder, but later, they wanted to build it out into a whole region. They could make the city a package that would be a package, which contained other packages like those buildings and cars. And again, there would be a high-level interface on that city, which would allow you to configure it perhaps the population or the percent urbanization or something like that. And this is really amazing within the context of large teams building great experiences. But it gets even more interesting when you think about our large creator community. And earlier I mentioned our creator marketplace. Packages are the way that content is shared on the creator marketplace. So -- and it's important to note, I think, that when creators put content on the creator marketplace, they can be free, but they can also attach a price to it. And what this means is that creators are incentivized to create general purpose, components of building more complicated worlds. They can earn a living on it. That car example if someone made an amazing package for cars which you can control the year, the model that makes the color and so many other options, put it on the marketplace that could charge money for it. Now of course, other creators are incentivized to consume that because they're trying to get to market. They're trying to build a larger experience -- and so there's this creator flywheel, which creators are building upon each other's work. And this is a critical flywheel for us as we talk about making megascale and lifelike worlds. We also have really huge studios on the platform now. They need AB testing. They need to understand things like user acquisition, engagement, retention and monetization and so much more. Meanwhile, as I mentioned earlier, we have a vertically integrated platform. When users engage with content on our platform, we can track their behavior. We can really understand what's going, what's working -- what's going on and what's working and what's not. And as you might expect from a large technology company like Roblox, we have our own internal analytics system, which has all these capabilities and more. We're working on investing on that internal analytics platform and very carefully and deliberately. We believe we can expose certain capabilities through our creator analytics platform to allow our creators to make better and better content. And if you recall earlier, when I was describing this flywheel that bottom arrow of feedback back to the creators. This is that. So the better we make our creator analytics system, the more insights we provide our creators, the better able they are to make amazing content on the platform. So this is a deeply strategic area for us. Finally, I want to just touch very briefly on third-party tool integration. So we want our creators to use the best tools for the job, now for many of them, that's studio, but we looked across our creator community. We saw a lot of them are using a tool called Blender for 3D object creation. And what they would do is they create these amazing 3D objects in Blender. Then they click export, then they go over to studio and that imported in, then they had arrange that asset within studio. They then go back to Blender and they want to tweak some and change it. We go through that same flow again, and again and again, very inefficient. We saw an opportunity to build a plugging into Blender with 1 click that can publish the assets that they created in Blender into Studio, iterate, iterate, iterate. This is dramatically accelerating content creation on the platform. And I want to call it out because it's a win and of itself, but more importantly, it's a validation of our API first strategy in which we're providing APIs and capabilities to allow creators to use the right tool for the job to get their work done, whether that's our tools or not. Beyond, there's 3 strategic areas I just want to cover briefly. We're investing in a cloud API-first platform. In the future, the Roblox studio will not be in a privileged position as it relates to creation on the Roblox platform. We're going to empower creators to use their own tools and probably our creators to create tools and perhaps create an entire industry of tool creation that essentially competes with studio. But more importantly, it might allow new types of creation on the platform, new types of content that maybe we hadn't even anticipated and will make the platform more rich. Secondly, we see world getting larger and larger, larger than can even fit on a creator's computer. I mentioned earlier when I was talking about Studio that when you create an experience now in Roblox, it's positioned on the cloud and studio connects to it. What this means, when those world become super, super large, what's going to happen is the creator will connect to the cloud, and they'll just stream in the part of that large world that's relevant to them that they're working on. And -- many other people may be working on the same world. And so we'll be living in a world in which creators are creating in a world which they also explore to see what other people are creating, and this is much like the real world. And finally, we're continuing to work on the marketizing creation. So it's going to be easier than ever to create on the Roblox platform. Right now, we do have experiences that allow creation in the experience, but the content that is created is locked in the experience. I mentioned earlier, we're building APIs. An example of how these APIs will be used is in experience, users will be able to publish content that they created with an experience to be outside of the experience and have a life of its own. And the possibilities of this are almost endless. It could be creation of new experiences, it could be creation of new clothing or other types of assets? One way we think this is going to happen is through the use of AI and ML assisted creation in which users will be able to use natural language or sketches to create things that have never existed worlds that they can then export and make experiences of their own. All right. In conclusion, the future for creators is very bright. We believe we can get more than 100 million creators on the platform. And if you can imagine it, you can realize it on the Roblox platform. Thank you. All right. Next up, our Chief Scientist, Dr. Morgan McGuire will tell you about some exciting developments in the Roblox engine. Interesting fact, Morgan designed the scalable graphics for the very first version of Roblox back in 2005, and he was the leading game technology professor in academia. He invented many of the features used across the industry today. And right now, he leads all of our R&D efforts on the engine. Welcome to the stage, Dr. Morgan McGuire.

Thank you Nick. I'm Morgan, I'm here to tell you about the Roblox engine. The Roblox engine is one of the key differentiators of our technology stack. It's unique across the industry. It's very different than the way other 3D engines are built because we built for social and we built for scaling first. This is what powers our metaverse. The Roblox engine is what's executing simultaneously on your device, your phone, your tablet, your laptop, your console and in our cloud. Our CTO, Dan told you about our tech stack, which we own all the way down. And at the edge data centers, we have 15,000 multi-core processors. Each of those is also running the same Roblox engine. The Roblox engine is built on a concept of distributed computing. We can do work simultaneously throughout that entire cloud and simultaneously directly on player devices. This gives us 3 tremendous advantages. The first is because we leverage local computation that includes local rendering. We have incredible responsiveness, no matter what network connection you're on. So you can have a ping, a latency across the network of 100 milliseconds or 1,000 milliseconds, and because we can run the physics and the graphics directly on your device, we don't have to wait for a round trip to the server like other engines do. So incredible responsiveness. The second feature of our distributed computation is it gives us very high player counts. Now player counts lead to social density. For social 3D, the key is not just having a large number of players to having them in the same world and able to interact with each other. So by putting more players in the same world by distributing the cost of the computation, we're able to get more interactions between players, more social. And finally, because we're distributing that computation, we're able to run incredibly efficiently in these edge data centers, each one of those 15,000-plus servers is able to run hundreds of Roblox worlds on it. This is in contrast to traditional game servers where a single server node might give you 1 or 2 instances. So incredible density, both for the social side for the player experience, but also for lowering our operational costs by leveraging the processing flower that every player is bringing to that network. From this base of performance and scalability, we have a lot more performance overhead than you would expect from a tech stack. And because of that, we are able to leverage it to build an advanced avatar sequence and that gives us unbounded creation and unbounded creation is what drives our growth. Let me tell you a little more about this. Creation on Roblox is radically different than in other 3D systems. It's because of this power. We don't limit what you can create to maybe just making new static maps or tweaking a couple of the properties of an individual object. We don't limit the scope of avatar creation. On Roblox, you can create anything. You can build a machine and bring it to life. You can write full program code if you want. You can invent new kinds of interaction modalities and new interaction loops, and you can design everything as a creator about identity and expression. You can make sneakers, you can make dresses, you can make facial expressions and animations, you can create whole avatar bodies and combine them. Powering the social 3D space. It's not about frame rates, it's not about screenshots. That's how traditional games were marketed. We're competitive on that. But the key is that we are focused on empowering individuality for our players and for our creators, and about scaling, distributed computation for scaling. So let me show you some highlights of features that we shipped in 2022. And everything on the Roblox engine as one of the gems of innovation in the company, this is a central focus for our Roblox research, academic style team as well as our in-house R&D teams and day-to-day engineering. So you've seen throughout this morning's presentations, the great strides we've made on avatars. From 2006, look at where we've come in 2022. And these are all user-created avatar bodies, I'm showing you here. We now have much more diverse hair and other personal items, and we're expanding the set of avatars available. What's most exciting about the avatar is, is that in 2022, we released the ability to have what we call the layered clothing feature, and that gives you custom outfits. Now many platforms, many video games have custom outfits you can buy for avatars. The key to the Roblox system is that we don't limit them to whole body outfits or a small set of avatars, it's about mix and match. It's about combinatorial explosion. So you see our clothing and avatars have no limits. You can take a shirt, address, a tie, earrings, hair and you can put them on any avatar. Now in the real world, imagine you go out and you buy a sweater. You didn't buy one outfit when you bought a sweater like a traditional game engine, you actually, by buying one thing have doubled the total number of outfits in your closet because you can take everything you used to wear in combination, and now that you can wear with or without your new sweater. And when you take that multiplicative power through every item in your closet, you have to literally exponentially growing set of outfits that you can make. Now we all know this from the real world, that's how things have always worked. The technology for doing that in a virtual environment is extremely sophisticated. It's because you have to make all the clothing adjust to different avatars, different animations, different sizes, and you have to make it so that it can layer specifically so that underlayers don't poke through the above ones. Now almost no other real-time system has tackled this problem, it's tremendously technically difficult. We solved that problem. We solved it for an unlimited number of layers and for many different kinds of clothing, and we ship that this year. And it saw a tremendous adoption. This is what drove combinatorial explosion about fits on our platform. It makes it so that every new piece of content released is magnifying every other piece of content. It's not just one additive piece. Shortly after releasing in the first month, we saw that 96% of the top 10,000 eligible experiences on Roblox adopted this technology. So our creator community moved very quickly not just to create the content, but make sure it showed up in experience. And we saw 115 million users who immediately acquired a piece of layered clothing. So this is not just great technology. This is not just the future. It's that as soon as we release these features, they're adopted and loved by our community. And then we bring your avatars to life. So this year, we released the ability for programmers on Roblox to control 40 different facial muscles and by combining those muscles, you can create the full range of human facial expression. You can do this for player avatars and you can do it for non-player characters like a shopkeeper. And so this brings the avatar faces to life in a way that makes the entire environment more exciting. And of course, when we have these great avatars and they're in great environments, we need the materials to reflect the properties of light correctly. So part of our fidelity to the simulation of reality and doing it at megascale is making sure that when you have glossy wears, you get the little highlights on it. When you put on a leather jacket, it looks like leather and it has a shine. When you sit on that velvet couch that it looks warm and soft, so we're simulating light in a much more physically based way, and we've passed complete control over that to the player community. So the defaults look great like this. But then they can customize it for the look and feel they want. These are just a few of the things we shipped in 2022. Here's a complete list. And of course, we still have a few more months left, so there's more coming. What I want to do though is skip ahead and give you a technical preview of where we're going in 2023, because we have some really exciting things that have spent a long time in the lab and that we're going to ship next year. So first, I showed you the programmable facial expressions that's for our creators on the platform. What we're going to do in 2023, and you saw Dave's demo of this on stage is unlock real-time facial animation for every player in the over 13 group. And what this does is we use your selfie camera or your webcam and the audio channel from the microphone on your device to drive your Avatar in real time. So you've seen what this looks like. I think you understand intuitively the value of it, which is that this gives you a sense of presence even more than video chat, this is about making it so that when you're in an embedded 3D environment, you're walking around, you're talking to your friends, maybe you're going to school in Roblox in the future, it feels real, it feels like real people, not plastic mannequins. This gives you lip sync. This gives you winking, smiling, tilting your head. The most important part of the tech stack behind this is that the video never leaves your phone. So what we do is we take the video. We run it through our custom neural network that we developed. We run the inference directly on your phone. The video never leaves your phone, and so you have privacy and safety of that video. And then we reduce it to these 40 muscle parameters highly compressed those, and we stream it out using the industry standard RTC protocol as a special media stream. And what that means is we take tremendously less bandwidth than if you were streaming full video. We only need these [ 40 ] muscle numbers for every frame. And that allows us to scale incredibly well. We can enable this for 50 players in the same world. And in the future, we're going to unlock it for even higher numbers. We're taking that same tech for real-time facial animation and bringing it to whole bodies as well. You see one of the greatest barriers to content creation in 3D is actually animation, not the creating of the shapes themselves. In Hollywood, to make a movie, we have multimillion dollar motion capture studios, and you've all seen actors in black suits and behind-the-scene shots. That's not accessible to most of our creators. The alternative is hand authoring, this is advanced 3D animation packages. And again, that's a skill level that keeps animation beyond the ability of most creators. But what we're doing is we're going to use AI to take full body video, put your iPhone in the corner, capture it in the future in real time, and then we'll animate a full Avatar in 3D, map it to any character and run it in the virtual world. Now we understand that this is a great breakthrough, especially in the way that it combines with our physics system and with our previously hand-authored animations. But in many use cases, you're sitting down, you're in a crowded environment, you're not going to do a full dance. And so for that case, we're also starting with off-line authoring. So you can upload a video to the creator tools to studio like Nick just showed you, and then it will produce that animation, which can be reused for players who aren't in a situation where they can move around. I've talked a lot about efficiency. One of the key parts of our tech stack is the Lua programming language. Now this is an open source package that we adopted, and then we extended it into what we call Luau, which is our advanced version. We added type inference. We added a high-performance interpreter. And in 2022, we released Parallel Luau, which gives you a 3, 4, 5x speed up, as you can see here, in various kinds of computations. So this gives us efficiency on your device. So if you're on mobile device, it saves your battery. And it gives us efficiency in the cloud to reduce our cost of operations and scale up more on density. We're continuing to advance Lua in the future. 2023, you'll have many incremental releases that will keep speeding up Lua. What I wanted to point out is that when we created our extension, Luau, we released it back to the community as open source. And the reason that we gave it back is, first of all, it's just the right thing to do. We're part of that ecosystem. We want to keep moving it forward. But second of all, it also when we support the Lua and Luau ecosystem, we see others adopt our technology stack for their products, we increased the number of Lua programmers who are available to create content on our platform, and we get the open source community helping to advance our tech stack. And I want to close with 2 really exciting features we've been working on for close to decades at this point. The first is real-time constructive solid geometry. Now there are multiple ways of making 3D shapes. 3D shapes are obviously the basis of games and virtual environments like on Roblox. One of them, which is relatively unique in the real-time space to Roblox is this constructive solid geometry. And the idea is, this is how in the real world -- mechanical engineers, industrial designers, this is how they make real machinable parts in their CAD systems. So you take shape primitives like spheres and cones and cylinders. And in sort of a virtual machining way, you can subtract parts from them, you can slice off pieces. And you always end up with something that's real, physically stimulatable and physically buildable. It also, for many people because it corresponds to real-world building and not a computer graphics concept, is a fairly intuitive way to build compared to Mesh editing. And so we've always offered this as an accessible way to create shapes on Roblox. But it's also across the industry always been an off-line tool. It's something you do for authoring, not something that happens at run time. We figured out how to speed this up by orders of magnitude. And by doing that, what we did is we made it fast enough to run it real time, including in a distributed fashion for our mega-scale simulation. We can run it on your device even. And what that enables is real-time creation, in-experience creation and real-time destruction. It makes the entire environment more dynamic. So I want to show you an example we pulled together. Everything I've shown you today is real and in- experience. These aren't visualizations. We're going to have a firefighter run into a house. In the future, everything in the house will be simulated. The fire, the smoke, the water coming from the firefighters. And it's going to cause the beams to erode. It's going to cause them to crack and fracture in natural ways not Hands-free done animation, but with live simulation. And so I'm going to show you the firefighter running through and their acts is doing real-time constructive solid geometry to remove pieces which will then fall with full physics dynamics. So that's the level of simulation that you just don't see today in other 3D environments. But we're pushing even further. And the last piece I want to share with you in terms of features that will start shipping in 2023 is this airplane video. And what we're going to do here is actually one of the holy grails of real-time simulation. We're doing full aerodynamic simulation. And this is the beginning of a road map that leads us through what's called full computational fluid dynamics. So that's stimulating, like I said, fire, water and smoke, different gases, all coupled together, simulating wind and clouds, all of that. So normally, if you're going to make a 3D animation of an airplane or a video game or a movie, it's almost all in software, it's in code. So it's not simulated from first principles. It's that somebody has described in a program exactly how the plane should move. So in a sense, it's a [ hack ], what we call it in the tech industry. That's not the way we do things at Roblox. We simulate reality and we do it at scale. And so what I'm about to show you, the airplanes are not hard coded. There's not software controlling how the airplane moves. It's all first principles physics. It's the way Lockheed Martin or NASA would design a simulation. So we have over the airfoils giving us lift. We have laminar flow on the top of the cockpit. When the control surfaces come up, we get drag, we'll get vortices. And so that's what makes the airplanes fly. And then you get emergent properties like a parachute will automatically open because of the air resistance as the air flows in and objects will have terminal velocity as they're falling. So let's see what our team build together. [Presentation]

And so that's all real. And it's the beginning of a road map that takes us far into the future of full high-fidelity simulation. That road map is essentially high-performance computing. It's super computer style, simulation brought to real-time 3D. And you might ask, why do we need NASA-level technology to make free-to-play games for kids? And the answer, of course, it has 2 pieces. One is unbounded creation. So instead of writing code to make those airplanes work, anybody who can make a LEGO model or a toy model or a paper airplane, it will just work. We lowered the barrier to creation. You don't need code. You don't need to know about 3D graphics and physics simulation. If you know about the real world and you experiment, things will just work. So we do a lot of work internally to make it very easier for our content creator community to make content. But the second is it's not about free-to-play games, and it's not about kids. That's an important part of our market. That's an important part that we're always going to support. But if we think forward to our vision, to what Dave described, that 50,000-person concert, the energy you get there from that kind of social density and that kind of simulation from the audio reverberating just like in the real world, the lights working and the real photons bouncing around illuminating things. And then you bring that to other experiences. Maybe it's a giant spaceship battle or maybe it's millions of [ folks ] coming over a hill or maybe it's a university, and we're doing in the future augmented reality. And we have those 50,000 people who are not at a concert, but they're going back and forth between lecture halls and then we're mixing the real world and the virtual world. All of those cases need to simulate with real-world robustness and real-world fidelity. Otherwise, you break the immersion and you break the value chain. So Roblox has mega-scale simulation. It's thanks to our key differentiator, which is our distributed computation that's what lets us build a supercomputer out of every user's phone, every desktop and then our server cloud. We are driving the future of real-time 3D. We have on our research and R&D agenda, serverless computing. It's one of the state-of-the-arts and the back-end server community, we're bringing it to real time. We're using artificial intelligence to auto tune all of the hundreds of parameters that today are either set by players on a device and other platforms or in Roblox by our developers, we can automatically change those using AI in a data-driven way in order to give everyone the optimal experience even on a device we've never seen before. We're doing high-quality visuals, not just on the client side, but we're now exploring how to use GPU computation in the cloud. Now, as I said earlier, we believe in the low-latency, responsive aspect of doing -- rendering directly on your device. We don't believe in moving that all into the cloud. But on a legacy device, we can accelerate your computation and we can give you higher-quality visuals by giving you a lift with some of the compute on a GPU in the cloud and some directly on your device for low latency. And of course, the distributed computational fluid dynamics that I just showed you with the airplane video. So in summary, there are 3 key pieces of the engine technical innovation that are leading to a unique experience for players and the unique ecosystem that we've created. The first is our mega-scale simulation, building reality inside of a virtual world and doing it in a distributed way. The second is using all of that power we get from our unique distributed computation to power unbounded creation. Using that overhead, that performance freedom we have and putting it back into the system so that our players can do all this mixing and matching so that we can solve really hard technical problems to create a better experience. And what's great is, just as Dan and Nick have previously said on the stage, we do the hard work so that the players and the creator community don't have to. And the third is combinatorial excellence. Our vision has always been at scale with full fidelity simulation to have any physics for any type of part, any type of 3D model running with any motors, any animation system with any Avatar and any shoes and any hair, any clothes, driving it from programmed animation, from simulation, from your camera through AI, running on any device for any user anywhere in the world and at scale. Thank you very much. That's our engine vision. And now I want to bring back to the stage our CEO, David Baszucki. [Presentation]

Thank you, Morgan, and thank you for the whole team. We have said many times the primary product that Roblox is creating is people and systems to drive innovation and execution at scale. And I feel we just saw a small snapshot of that today, and I'm very proud of all the people who presented. We are going to take a short break about 5 minutes, and then Mike Guthrie, our CFO, is going to join us. And he is going to show how we blend all of that execution around retention, frequency, engagement, monetization with all of that visionary innovation and how that comes together in our business model. So thank you all. We'll see you in about 5 minutes, and we'll make an announcement. Thank you. [Break]

[Presentation]

Please welcome Roblox CFO, Mike Guthrie.

Good morning. It is really, really nice to see all of the investors. Thank you so much for coming and for everybody who's online, it is also great to have you. We really appreciate it. This is our second investor conference, and we're just incredibly excited to be here. What a tough bunch of acts to follow. So I get to go last, which is incredible. I met Dave about 5.5 years ago. We were introduced by a common friend. We have breakfast over in Woodside. And it was the first time I had ever heard this entrepreneur talk about a notion of creating a category of human co-experience, a new category. And I was very, very enthralled with the discussion. I'd actually really never heard of the company prior to that breakfast -- the night before I had that breakfast, and it was just fascinating to me. And I can remember asking, Dave, a couple of questions. The first one was, how do you keep growing? The business had carved out a really good niche with 9- to 12-year-olds, primarily in the U.S., Canada and the U.K. And Dave said, "Well, we're going to grow because we're going to expand around the world." It turns out today Roblox is entirely in English. We're going to be able to translate Roblox eventually, and we think that's just going to spur a global expansion of the company. The second thing he said is we're going to draw older users to the platform. We're going to what we call Age Up. And that's going to be enabled by an incredibly talented creator community that we will empower with great technology and the tech will get better and better and the content will get better and better and older users will come to Roblox. And that all made sense to me. I thought it was ambitious, but it made sense. The second thing I asked Dave was, well, what is it that you actually -- what do you worry about? And we talked about the -- the first thing he said was, I sleep very well at night. But I do think about a variety of different things. I think about how do I recruit the best people, how do we compensate them, get them excited to do incredibly technical work. But really what I always think about is I have to have the 10x in front of me. I have to know how to grow the business, 10x, and that was 10x ago. And everything this morning that you've seen so far is about where the next 10x is coming from. And we talk a lot about investments. And hopefully, by now, it is crystal clear to you what our model is. We are the platform, we are the technology. We build things for our community. Our community does amazing things with that technology that attracts an incredible user base and the business just grows. It has been an amazing run. My favorite moments at Roblox have been when creators are in the room, whether it's a town hall meetings where we've had creators present things that they're doing or last week at RDC, it's just amazing to see what they do with all the technology on Roblox. And so really, what we think about is our investments compound at incredible rates when funneled through that creator community. That's the way we think about it. We often describe Roblox as having 2 viral loops: A content viral loop and a social viral loop. And the content viral loop is, of course, fed by our creator community, and it's really those investments that we're making that allow that viral loop to grow and spin faster. That's really what we're all about. And so really, we are in a constant form of investment and innovation so that they can build incredible things. Now this actually is what my last slide said last year at our investor conference. And in a way, you could almost think it was easier to say it a year ago, right? The world was very different. Stock market was a lot higher. Interest rates were a lot lower. The overall level of prices around the world was lower. There wasn't a lot of conflict in the world. It was -- it's a different time. And some people, of course, have reacted to that by slowing down or being more cautious, we really haven't. We really, really haven't. We just fundamentally believe that if we're making the right investments, those are the kinds of things that are going to drive long-term enterprise value at the company. And we're going to continue to do that for a very long time because this is a category where we have so far to go. This is my first slide at Investor Day last year. Apparently, I'm repurposing slides. I talked about scale, growth and cash flow. And I want to return to the same 3 things today just to start off. This is, in fact, a business of incredible scale. We are on our way to connecting 1 billion people on our platform. And right now, last month, we're about 1/4 of the way there. That's a lot of people. Every day, 60 million people come to Roblox. And on a weekly basis, they are routinely spending over 1 billion hours. Now you saw in an earlier presentation that we now have about 3 million creators on Roblox that are earning currency, 3 million. That number is twice as large as it was the last time we all got together to do something like this. That is scale. That is real scale. And in fact, when we looked across most of our key metrics, we just never been bigger. By any metric, we are just as big as this company has ever been, and it's a great jumping off point for '23, '24 and '25. We're excited about that. Growth. Growth has been so interesting. Along -- over the years, the company has grown incredibly well. And in this period that we've been dealing with over the last few years during the pandemic, I know growth has gotten really confusing to people. Are we comparing to a COVID period or not a COVID period? Are we reopening? Or what are we comparing against? And I'm just here to tell you that we are growing. We are growing in every geography in the world. We are growing in every age demographic around the world. The growth that we have is organic and it is sustainable. We are not spending a lot of money on inefficient user acquisition with negative unit economics. As you heard many times, our user growth is organic. And for that reason, we always have thought it would be more sustainable, and it has been sustainable over a very long period of time. So we believe the company is at a great growth vector and is going to continue to grow. Now today, we're going to -- we've talked a bunch today about certain core metrics in the business. We're going to weave that into how we forecast the business. But these notions of retention, frequency, engagement and monetization. These are how we take our core user growth and actually accelerate it all the way from users to more hours of engagement to more monetization. And that's really exciting. The last one is cash flow. Roblox generated $0.5 billion of operating cash flow as a private company. When I joined the company, we have raised $35 million of primary capital, and the company was already over $300 million of bookings and cash flow positive. It's a really, really high unit economic incredible business. Before we went public, we had $1 billion of cash on the balance sheet. And over the last 10 quarters, we've generated another $1 billion of free cash. So the business has incredible cash flow potential. We also raised another $1 billion of cash late last year. So we have a ton of liquidity and the ability to continue to invest and grow for the long term. So we still look at the same basic simple model, scale, growth and cash flow and feel like it fits incredibly well around Roblox. Just keep in mind that we will always take a very long-term perspective. We're trying to do the things today that are going to drive long-term growth in enterprise value. We're not saying that we're not going to have outstanding performance in the short run. But just always know, we're trying to take the longest term perspective that we possibly can. Okay. With those as a starting point, I'm going to try to do 4 things this morning before we bring day back up and do some Q&A. Number one is I'm going to look at some historical financial numbers. This is mostly stuff that you all know if you've been tracking the company, but some numbers over the last 4 years. The second thing I want to do is talk a little bit about how we forecast the company inside. And these core metrics that you've been hearing about, this notion of retention and frequency, engagement and monetization, there are people that -- engine product leaders who are responsible for those metrics, how do those work into the way we think about forecasting and the way you should think about the growth of the business? That's the second thing. The third thing I'm going to cover are the August metrics. As everyone here knows, we do monthly metrics. We put those metrics out usually on about the 15th day of the month. Today is the day. So we'll put August metrics out. I do want to make a point, just, historically, the third month of every quarter, we've waited to report our earnings to get you those metrics. And I think we're going to change that with September, that I know we are. The reason we always delay it was, one was to wrap it into the earnings call. And the other reason was -- the truth of the matter is, if you're running a public company and you're closing the books, you do make adjustments in the last month of a quarter. So we always wanted to maybe hold off on those metrics until we made all those adjustments. We're just not going to do that next month. And from now on, we're just going to go every month. So the September metrics will come out a little bit faster. And we think -- we've heard from you that you want to see those numbers quicker. So we'll do that. And then the fourth thing we're going to do is, actually, we're going to return to that breakfast a few years ago, and we're going to look at how we're doing on international growth and aging up, which are the core growth drivers of the business and have been for so many years. All right. So this is what the world looked like if you were the CFO of Roblox in the first quarter of 2020 or the fourth quarter of '19 and the first quarter of 2020. What I saw in the company was that we had this ability to compound bookings very quickly. The white solid line are our bookings. And in fact, in 2019, we grew at 39%. In the fourth quarter of '19, we actually grew at about 60%. The business was really scaling nicely. We were starting to see some of the growth drivers really start to pick up. Underneath that, all stacked up to the dash white line, our cash expenses. So everything between the dark white and the dash white line, that's cash flow -- operating cash flow in the business. And you can see over time, we are generating really healthy margins somewhere between usually about 12% and 15% on a monthly basis while having enough cash to invest in the business and keep growing at these high rates. It was a really, really nice financial model, the kind of thing that allows CFOs to sleep comfortably at night running a private company. It did not require us to go out and raise a lot of venture capital, which is really a nice thing. Underneath there, you see 4 colored stacks -- really 5 colored stacks. On the bottom is DevEx. That's the -- those are the economics that we share with our developer community. And we'll talk a little bit about the various forms that we do that in, and you've seen some of that earlier today. The next one is our hiring, the number of people in the company and the salaries and other things that make up compensation. Above that, infrastructure and trust and safety. Dan Sturman went through a lot of the things that we're doing in infra and trust and safety. That's a major area of investment for us. And then the purple is what we call cost of revenue, mostly payment processing, obviously dominated by Apple and Google app store fees. And then the little, key thing above that, that's overhead. That's all other expenses. We are very, very efficient on cost at Roblox. We watch every nickel. We're incredibly careful about it because we always look and say anything that we waste was money that could have gone to the developers to build the business. So we try very hard not to waste any money. That's what the world looked like in the first quarter of 2020. It was very calm, very exciting, and then that happened. In 90 days, when the pandemic started, the business doubled. We went from $250 million of bookings to $500 million in 90 days, and we continue to grow. For 4 quarters in a row, the business basically was a 3x over the prior year. It was absolutely incredible. I certainly had never seen anything like it. And our reaction to that was not to revel in high margins or all the cash that was coming in, it was to continue what we had been doing, invest in long-term value. This is what's happened with our developer economics since the pandemic started. They've grown aggressively. We had a planning meeting a couple of years ago to talk about where we wanted these numbers to be. We're 50% higher. Now DevEx is generally a variable expense. It tends to track fairly closely with bookings. One of the things that we've done in the last few years is added engagement-based payouts. And when I talk to developers, last week during RDC, there are many of them that talked about the balance of economics being really great and the excitement that they have that advertising is now going to be a third way for them to monetize and earn economics. So they can invest in their businesses and build great companies. So that's what we've done on DevEx. This is personnel. I remember the last meeting at Roblox when we realized that we had to actually go home because of the pandemic, Dave said, recruiting will not stop. And you can see recruiting has not stopped. We cannot build the kind of amazing technology that you've seen this morning without literally the best people in the world. And when you start hiring the best people in the world, the exciting thing is the other best people in the world want to come to that company and work on really hard problems. And you can see the acceleration in recruiting here when you look at just our hiring numbers. Our recruiting brand has never been better. Our recruiting team has never been better, and we're just attracting amazing people. Now that number -- I just want to make a really quick comment. That number excludes stock-based compensation. Just put us in the category of companies that absolutely believe that ownership in the company is great for people. People want to benefit from the innovation they are creating and the value of that innovation through stock ownership, and they retain. It is a retention tool. Stock ownership works. Owners behave differently than renters. Count us also in the category of companies that understand dilution, your shareholders, we are shareholders. We have to grow value well in excess of the amount of dilution that's in the company. We've been very vocal this year, even though prices have been volatile all over the market, we're going to keep dilution below 5%. We're going to do better than that, but we're going to keep dilution low, but we are still going to attract great people, and we're still going to retain great people. So that's what we've been doing on hiring. Infra and trust and safety. A huge area of investment, incredibly exciting. Dan talked to you about what we're doing here. It really is what powers us. And when we make these investments over time, we really, really see the benefits. Now today, this is an area that feels a little more variable as we're adding users and engagement, we are adding infrastructure and trust and safety, but this is also an area where there's real efficiency. And we will ultimately start to see leverage in infra in particular. By the way, we will also ultimately see leverage in head count. As our revenue per person goes up, we do see that kind of leverage in the business. But for now, we're really, really in recruiting mode. Cost of revenue, again, is the top -- the first purple line, and it's interesting. First of all, the first thing you see is it bigger than a lot of the other expenses, which seems unfortunate, right? Cost of revenue, payment processing, that shouldn't be the thing that dominates our cost structure. We've gotten very, very good at running the company in the environment where it is expensive to process payments. We're good at that. But if you really look at that, you'll see that a number that historically had been pretty consistently 25% of our bookings number. It looks like it's coming down because it is. We really, over the last 1.5 years or so, have leaned into prepaid cards. It's been fantastic. Consumers love prepaid cards. We do a huge prepaid card business during the holidays. We do a big prepaid card business during different times of the year, different holidays in different countries, birthday presents, all kinds of things. And increasingly, we are also in a position where we have credit cards for more users, and we can more efficiently sell Roblox to them. So today, we're actually sub-22% of bookings on our cost of revenue. Generally, you've heard us say this before, when we have an efficiency of cost, we want to get that to the developer community. That investment has always yielded great returns for us. And that really leads us to the next question, which is margins went from 12% to 15% up into the mid-30s. We did not sit around and say how can we maintain 30% EBITDA margins. We said, how can we build and grow the business at its absolute peak levels, and we've made the right investments. Now a logical question that I get all the time is, when are the margins going to go back up? The margins are not going to go back up because we cut costs. The margins are going to go back up because of all this incredible technology and this amazing creator community that's building better and better and better content, and it is going to drive the bookings up. And when we get to those points, we're going to get back to margins that look like where we were maybe pre-COVID. And my guess is we'll run at those levels for a while because we really don't have a need to be up in 25%, 30%. If we're up that high, there's something we're not investing in that we drive longer-term value that we should be investing in. So that's how we think about the margin structure. And this is the first thing I wanted to cover. This is historical. You know this, but I just want to give you the philosophy, right? The second thing is how do we operate. For a very, very long time, especially in the -- during the pandemic, we knew the top line was coming in. I mean we just knew that, that would be growing generally at a rate that we almost couldn't catch up in terms of expenses. But we learned a lot about what's really driving the Roblox machine and how do we operate better so that we are compounding our growth. And you heard -- again, you heard it today, our user team, our growth team and the economy team, they are very focused on those core metrics. They know it, they talk about it, they report on it periodically to the executive team. That's what's really driving the business. And so let me put this into context for you, both in terms of the way we forecast and then how we're operating. So the vision, if you're in the finance accounting or BizOps team, we look at forecasting users our top level number. And the whole idea is we're going to grow and retain users of all ages around the world, big monthly active users. That's what we forecast. That's the starting point for all of our forecast is what does our math forecast look like. Now we do this in a really interesting way. We have a lot of history, and we have a lot of data. And we look at 5 different age breakouts today. There will be more as time goes on, but 5 today. U9, 9 to 12, 13 to 16, 17 to 24, 25 and over. We look at 3 broad geographies, although it gets even more complicated, but we look at 3 broad geographies; core markets, opportunistic markets and strategic markets. And then we look at the business also by gender. If you do the math, that's about 30 slices of the business. And we have a lot of data. And when we look at that, we look at other information. We look at content data. What current content is doing what, and how is that having an effect on what our results might look like. We do look at COVID. What was happening in a certain country 12 months ago, was there a spike, what was going on. And that is really how we forecast the business. But what we've seen is that for any given number of users, if we get the user forecast right and we tend to do a pretty good job, for any given number of users, there's an ability to massively compound the business by doing other smart things. And we call these the compounding drivers. And you've heard them this morning, frequency -- retention, frequency, engagement and monetization, our user group, our growth group and our economy team. And everything that Dan talked about the core functions, some of this amazing technology. Just think of that as things that while they clearly affect the value of Roblox, maybe we're not touching the income statement every day. We're here trying to forecast the income statement. We focus on these core metrics. It's been such an interesting few years. And occasionally, we'll hear somebody talk about our business. And as if it weren't for COVID, we would not exist. It's just simply not true. I just want to show you this graph, and I'm going to show you a few more. This is frequency. On the left, you see de-seasonalized DAUs divided by MAUs. And it starts at the beginning of 2019. And you'll notice something we index, just to make it easy. You will notice something that we were running at about 100, and all of a sudden, there's a spike. Obviously, that spike in about the first quarter of 2020 is COVID. Sure. Immediately, people started spending -- our existing user base was spending more time on Roblox. So our DAU to MAU ratio went up about 25% very quickly. But what's interesting is look at how consistent that ratio has been, notwithstanding the fact that our MAUs are growing at a very, very high compounded rate. And a lot of those are brand new, new to the platform. We must have been making improvements to the product because this level of frequency has continued to stay well above where we were going into COVID. In fact, today, August, we're 18% above where we were at the beginning of 2019. We're not necessarily at peak COVID frequency, but we're pretty close, and we are well above. So we have retained a lot of that frequency improvement. And that's why for a given amount of MAUs, we've been able to more than triple our DAUs from under 20 million in the beginning of 2019 to about 60 million as of August. Very similar story on engagement. Look at how engagement spiked. It's really interesting. The first thing that happened, all of the Roblox community immediately started spending more time on Roblox. That number jumped up above 125%. it really, really increased. It's really incredible what happened. People found their communities back on Roblox. They couldn't be in person so they were able to connect with their friends, their family on Roblox. And even though as more and more DAUs have come on to the platform and grown at very high rates, and we have certainly moderated from the very peak days of COVID, we are nowhere near back down to where we were. We have maintained and grown. The product has gotten better. The content has gotten better. Our engagement has grown 13%. And we believe we've held that and will grow on top of that. And that is why hours have more than 4.5x between the beginning of '19 to where we are today at 4.7 billion hours for the month of August. Same story on bookings. We started in the -- we started at 100, the pandemic started. It took a while for bookings to grow at the same rate -- for monetization to grow at the same rate because we added a lot of hours and a lot of new users who very quickly spend enough time on Roblox to become engaged enough to actually monetize. And again, although those numbers have come down as we've reopened, they are 20% above where we started. And as a result, there has been a massive acceleration in bookings over the last few years. Now I want to caution, not every month, do we see the metrics lining up this way? Not every quarter does one increase by more than one, dose increases by the next one. It is true that over the last 3 years, this is what we've had. A given amount of MAUs, we've seen a higher rate of growth of DAUs, a higher rate of growth of hours of engagement and an even higher rate of growth of bookings. We believe that by focusing on these kinds of performance improvements by investing in incredible technology, by giving that to our creator community, by giving ownership to product and engineering leads around the company for these core metrics, this is where the next 10x is coming from. Okay. That was the first thing -- the second thing. Third thing is I'd like to go through the August metrics. We had a great August. I'm incredibly excited. We had 60 million daily active users in August that grew at 24% year-over-year. The business is growing. It's growing all around the world. It's growing in all age demographics. This is one of the healthiest signs of the health and well-being of our platform is 60 million DAUs in the month of August. We've literally never been bigger. We've had a fantastic summer. And we really feel like we are reopened and the platform is reopened. So just a fantastic performance on DAUs. Users spent 4.7 billion hours in the platform, nearly 20% growth year-over-year. We generally expect August a little less engagement than July, right? School starting, people getting back to more normal days with schools open. But again, fantastic growth. The last 3 months have been super strong. And we're really, really excited. And we feel like, again, we're getting through the difficult comparison periods, and we're just showing that the platform just has never, never, never been bigger than it is today, which is wonderful. And on bookings, our bookings range for the month of August is $233 to $237. Now We talked a lot earlier in the year about year-over-year growth rates. We knew because of comparisons, we would have difficult compares in March and April. We talked about that on different calls on when we would bottom out in terms of year-over-year growth. We're really excited to see the business returning to high rates of growth very quickly in June, July and August. The reason we're showing you 2 year-over-year growth numbers, the reported year-over-year growth are the red numbers, 8, 10 and 7 year-over-year for the last 3 -- for the last 3 months. But as all of you know, in the crazy economy that we're in right now, the dollar has just really strengthened across all major currencies, the pound, the euro and many others. And so we're -- like a lot of other companies, we are losing about 400 basis points of growth on a currency-adjusted basis. So when we run the data for where the currencies were this time last year, the business is now in double-digit growth land. And look, it reported as what we're looking at. But again, we're operators and we're running the company, and we feel like we know that we've now returned to sort of double-digit growth and that feels great. So it's been a really, really good summer for us. It was a really fantastic August. We're incredibly excited about the momentum going into next year. So we're about connecting everyone, everyone in the world. That's what we want to do. This is a massive platform. I go back to that breakfast with Dave. And I think about the major ways that we have grown, the entire time I've been here, I get this question all the time. How are you growing? It's really around the world and aging up. It's the same story. It's a really good story, but it's the same story powered by massively improved technology, a much bigger creator community that can build absolutely amazing and wonderful things. We're growing in every region right now. U.S. and Canada is back up to very healthy positive growth. I know that's important to everyone because U.S. and Canada monetizes great. But Asia Pacific is now growing at about 39%. And Dave showed statistics in Japan, and in India and really all around Asia, Roblox is really enjoying fantastic growth. Same in Europe. We're doing incredibly well in Europe. So we really feel like we're firing on all cylinders. Translation is certainly part of it. Other part of it is so many great creators around the world building content, and that's exciting. So one on the right, I think, is when I walked breakfast, I believe the one on the left at the time, that day, I believe that, that would happen. I don't know that I really believe this would happen at the rate that it happened until I got into the company and saw what was going on every day. 17- to 24-year-olds are now growing at 41%. This is August over August. And you can see really clearly, it's not like it's the small little cohort that's growing on a small base. At 13.2 million DAUs, it's the second largest cohort, and you can do the math on growth rates. It will obviously be the largest cohort in the not-too-distant future. Everything there at the bottom are the aged up cohorts, 13 to 16, 17 to 24 and 25 and over. That's the fastest growing. And what we've learned with those users is they do, in fact, engage at very similar rates as younger users. And they do, in fact, monetize better, which is really what we expected. They control their own wallets and so they monetize really well. So 5 years later, the story is very similar, and it's really exciting. So first of all, I just want to thank everybody again for spending time with us. Dave is going to come back out. And we're going to get ready for Q&A with everybody. We're going to have microphones on the side. So thanks again for coming, and we look forward to taking your questions. And Dave, come on back.

All right, Mike and team, that was awesome. We have 2 microphones right here. For any of you who would like to ask us a question, it can be anything. Grab a mic, we'll go back and forth as much as we can. We're live and nothing is off limits. It's exactly the way we do it at Roblox with our open mic. So -- and when we go to you, just name, where you're from and question.

It's Brandon Ross from LightShed Partners. I wanted to dig into the ad business that you're creating and launching next year. First of all, how long is it going to be until we could see meaningful contribution in terms of revenue or bookings from the ad business? And if you look out 3 to 5 years, how big do you think that business can be? And what are the gating factors?

Maybe I'll talk about the how long and then you can share. I do want to caveat this is a brand-new type of ad unit that's never been seen before, and it's combined with 4.7 billion hours, which we can extrapolate in other types of platforms well mentioned that the early tests are going to happen this year with a select number of partners. And I expect we will see early partnerships that will involve revenue pretty close to that. We plan by, I believe, early next year to get this into a self-serve mode where anyone can use it. And then I'll go to Mike on projections.

Yes. It's very difficult to put financial projections around the brands. We've, I think, in a very Roblox way worked with brands to have them experiment and figure out what works for them. And we're going to see. We're going to see what they do. We're going to see how creative they can be. We're going to see how valuable the interactions are with their user base. But we feel really comfortable that in 3 to 5 years, this is going to be a big part of our business. We really do. We think brands are going to be incredibly creative. There are multiple ways to engage with the user base. Just if you think just in a very simple way on the example we showed, the portal into -- in the Vans World, that's a user engaging with a brand for possibly an hour, which is really difficult to do in other places. So things that can happen here that haven't happened anywhere else, that makes it inherently hard to forecast, but it also makes it inherently exciting about the long-term value of the business.

And how are you thinking about the creator splits for the advertising business?

In discussion now, I would say, give creators as much as we possibly can. One thing that's unique about these ad units is, we're optimistic they'll heavily be performance-based, teleporting into a destination, staying on platform, being within our bounds of safety and civility. So even the performance ads, I think, help the platform.

Mike and David, thanks for the presentation, really informative. And thanks for adding all the age data there at the end. But I want to kind of dig in a little bit more to the age data. How much is that verified? A lot of these new features that will be for older users, are those going to be for verified users only? And then lastly, around the aging. Could you talk about the engagement by age group as far as time spent on the platform?

I'll say a little. We can go back and for on this one. So we -- what we know is we have a long history of getting age data from the players on our platform. And we know that these gains are real relative to the size they used to be. We are not verifying right now the age of all of our 9- and 14-year-olds, but the incremental gains are absolutely real. When we think about a lot of the economic things we talked about here, and I'm just running through the product road map in my head. Incremental improvements have nothing to do with age gating. Immersive ad system has nothing to do with age gating. Expansion of our catalog and perfecting the economy, nothing to do with age gating. So I don't -- I'm trying to think of any of the economic things that we've mentioned that will have friction from age gating. I'll kick it over to Mike.

Yes, we ask that question all the time because when we started looking at the data, we say, is there any reason to believe that behavior would be affected by something that would lead them to be behaving differently than they've ever behaved before in the platform? So we're always looking at that kind of data. Self-reported, as we've always said. Your other question, Andrew, was on engagement and monetization of those users. Is that...

The engagement side of -- the engagement side?

Yes. It's very similar. Different ages are engaging very, very similarly. There's not -- there are not major differences across. They're a little bit of -- put it this way, there's a little more difference between regions. There's less -- probably less within a region and within age demos. So they're -- they look just as engaged and high monetizing, not meaningfully -- meaningful changes around the different ages.

Got it. And I just want to sneak in one more question philosophically. David, the scarcity stuff you showed, the buy and trade, giving developers incremental revenues as things get bought and sold, that sounds a lot like NFTs. But just curious...

No, I actually think it's the exact opposite. I think one way to think about where we're trying to go in our catalog is, first and foremost, we've had active economy on Roblox for a long time, and it's really a utility economy. It's -- if I buy shoes in the real world for $100, and I wear them 10% of the time in Roblox, we could see those shoes being $1 to $5 to $10. The -- so I feel we have this real solid historical utility-based economy. We did see some brands in the real world. Gucci, for example, can demand high value for rare items. I think the philosophy is more replicate the real world rather than try to create some speculative economy.

David Karnovsky from JPMorgan. I'm going to follow up on the advertising question. I guess, Dave, how important of a revenue stream do you see advertising being to developers over time? How could that potentially change the type of experiences that become popular on Roblox? And then how much control do you want to give to developers in terms of ad load and types of ads that they build in? And then maybe I have a follow-up.

I think we're coming at this from this wonderfully fortunate position. And for the Roblox historians out there, the very first source of revenue we made were very bad banner ads. A second source of revenue that was live on Roblox for a while was pre-roll video. Both of those are no longer on the platform. So we've learned along the way how can we create a very, very large business without any advertising whatsoever. Philosophically, that stays there. But what's really exciting is the units we're talking about sure have a revenue upside, have an upside for developers. We love that, a third source of revenue. But they're also fun and interesting on brands. We believe our people on the platform want to participate with. So there's growth opportunity from the types of advertising we're going to do as well. I think, historically, our values are always going to be very thoughtful and cautious in how we roll this out. We've always been very selective about the ad partners that will work and that will come on to our platform. So I think huge opportunity for booking, huge opportunities for growth, and at the same time, we'll do it in a values consistent way.

And can you maybe just discuss how you think about it geographically? Is this an opportunity globally? How important is it for a region, say, like India where monetization is more of a challenge?

I'm optimistic that given the efficiency of our infra and given our ability to scale trust and safety with ML and AI, I'm optimistic long term, we're going to be in really good shape all around the world, even without advertising. I think, on top of that, of course, different regions have different ECPMs and it's going to be different around the world. Some places are going to be better than others. I don't think we are going to be in a position where, oh my gosh, we need ads in India to do this to make it work. I think it will always be a values consistent accelerant.

Yes. I was going to say the same thing. I think the people go to this notion as, well, in a place like India, where GDP per capita is much lower, maybe what you do is you just like everyone has to get advertising in India, so you can get the monetization up. That would be not at all consistent with the way we want to run the business and really not a great experience for users in India. So why would we do it that way? So yes, we're not going to make the -- ultimately, when we get this right, it's going to be really valuable across the entire platform, but it should be consistent and get there over time. One of the reasons it's hard to forecast is this isn't what anyone else is doing, right? We're doing something different. It's a different unit. It's a different approach. And we're going to keep learning with the brands. That's been a huge benefit over the last couple of years. So -- but yes, it should not like be used to sort of milk money out of a part of the world where the unit economics aren't quite as good. That just really changes the experience.

Yes. And I would say, as we have scaled and we have gotten efficient and driven operational excellence, what would be considered lower monetizing regions, Brazil or Philippines, I think are solid contributors to our business at scale.

[indiscernible] from Edward Management. My question is, given the importance of search and discovery and recommendations, how do you think about managing the balance between servicing the best content and the most monetizable content? And then a secondary question to that is, is this sort of a prelude to sponsored recommendations in search?

We already have some sponsored recommendations. So on our home page, we didn't talk about it, but we know ultimately, this is a mix of all of those. The hard -- it's funny, Anupam on the search and discovery team, we say, "Oh, yes, just the optimization function is enterprise value in 10 years, just to implement that optimization function. That is a very difficult function to implement. I think graphically, we specifically showed the efficient frontier as a very cautious small slope deviation because we do believe long-term engagement DAUs, that's the big hit. We just think 2 developers, it's very thoughtful some of them, how they mix engagement with monetization. We want to give a nod to them as far as more personalization. Anything to add?

No, same, absolutely.

This is Omar Dessouky from Bank of America. So I have a couple of questions. I'll start off with more along the content, and then I'll ask one about infrastructure. So how do you protect the strong brand that Roblox has developed as being a family-oriented and family-friendly brand and really expand to types of content that may be more edgy and more appeal to teenage and adult gamers, things like Grand Theft Auto, Red Dead Redemption and Call of Duty and really expand that market for the older users? Or is that not even what you...

I think it's one of these two quadrant charts where one of the quadrants is trust and civility and a separate quad -- separate axis is the types of content on the platform. We want to be a utility -- a trusted, safe and civil utility that people trust to support a wide range of things. I think there's wonderful brands out there that span all ages. So we've been thinking about this for a long time. Someday, there will be older content on the platform, and there will be content that a 4-year-old, it can safely go to without a grandparent looking over their shoulder, there will be that. I think the common thing will be trust, civility and safety even as people start to understand this. And I think we've all in the midst of the last 2 or 3 years, we already have seen the brand and the understanding move from that's a place where younger people play games to, oh my gosh, what are we going to do in the middle of this pandemic? How are people going to stay connected when they can't be connected in the real world? So I'm optimistic we can hit that quadrant. Anything to add, Mike?

No, that's right.

And sorry, just a couple of more questions. So if I was to think about all these wonderful technological innovations you guys are making to improve the fidelity of our games, do you think that you could soon develop games that are close to AAA level that you would see on Xbox and Sony, AA, Indy, kind of -- where do you think you can kind of get up to in terms of quality?

Yes. I think Morgan said it really well when he talked about, of course, we think about photorealism and frame rate and AAA things, but we think about a lot of things. We think about social, we think about player density. We think about the ability to go anywhere with a friend in under a second. We think about join times. We think about variety of content. We think about the very, very difficult thing of having exactly the same content run on a crappy, old iPhone and iOS 16 or Android phone, I'm just saying old phone, not crappy iPhone or a 16 core gaming console. And that's super difficult. And I would say for those of you that want to do a Google search by year of the content on Roblox and the quality of it, you can extrapolate that it's getting better and better all the time.

Okay. Great. Well, I just wanted to ask a couple of infrastructure questions before concluding. So you talked about neural networks, which I'm quite interested in. How long has Roblox had a research effort to develop state-of-the-art neural network models that companies like Google or Microsoft would develop things like BERT, ResNet, AlexNet? And do you consider the existing chip architectures such as GPUs are sufficient for your purposes or would you consider maybe building your own application-specific architectures?

Yes. I would say this is a mix of things we develop as well as the open source community. I don't know the very first day we launched a very first neural network on Roblox. I know the cloud service for ML is not a hardwired thing. It's something we're developing as a Roblox ML cloud side-by-side other things developers want. Our creators on Roblox, in addition to our internal teams, they want data storage, they want persistence, they want analytics, they want event storage. And where we're going with this is a side-by-side with that. ML for Roblox is both what we use as well as what developers use at super scale. So Roblox now has a Chief Scientist. ML creation is a huge focus on that. And I think there are areas where we're using that way beyond where other companies are as far as like we talked about 3D object, detection -- code detection and things like that, there's a bright future. As far as what's it take to build that 50,000 player photorealistic thing in the cloud? A couple of advantages we have that would be very, very difficult if we were not incrementally building our own edge data centers. We're in a wonderful position with the learning we've done running everything through those computers. There's a wide range of technical innovations that are coming, shared memory, GPU in the cloud. We have a lot of options to put that together, so you'll be seeing that.

And just one final question, and I appreciate your patience here. What categories of unstructured data do you use to power your growth recommender systems, your DNNs there and your moderation systems?

Now we're getting into trouble for the CEO answering that one. I think Anupam is in the audience. I'm looking at him. When we're done, he could probably answer that better than me. So I don't want to get in hot water there.

Chris [indiscernible] from Needham. Just curious, the conversations you're having with brands now, how do they measure the ROI on the platform? And how do you kind of guide them towards measuring ROI in the future and brand spend or when it moves into performance spend?

These are real-time discussions. We can probably have Christina talk to you, but we're building those systems right now, having those discussions right now. We really haven't launched anything meaningful yet. So those are the kinds of conversations that are happening literally as we are speaking.

We do hear of brands that we have been working with who are running various ways of user engagement, telling us they're moving at 100% to Roblox. And so there must be some rationale or logic between that. I think longer term, attribution possibilities for shopping are absolutely enormous. Same thing with an experience like Vans for example. We do know people in the real world when they're walking in the region of a Vans store with their family go in there and make purchases partially because of the engagement of that experience. I think Vans knows that. I think over time, we're going to find better and better ways to attribute that. And the more we can attribute that there's an enormous possibility there.

When you say brands moving to Roblox, is that taking it from another platform or it's Roblox becoming a new category of spend?

I would say, anecdotally, you can talk to Christina about it, we'll see what she could share or not. I'm saying anecdotally other forms of advertising are engaging with the community. Some brands say, "Look, I just want to do it all on Roblox." Okay. I do not see any other questions. So what I want to just do is wrap up, and then we can all go have lunch and then we will mingle with all of you. We want to thank all of the online visitors as well, all of the small investors out there who might be watching us. We -- I really wanted to get across this balance of innovation and execution at scale and doing both of them with an amazing, amazing team. And I think in closing, I want to thank everyone at Roblox. It's been a super busy 2 weeks. We just did already see, we just did this. It covers way beyond everyone you've seen on stage to put this together. So 2 things. Thank you to the Roblox team, and thank you for all of our new investor partners that we're hanging out with today. So thank you, and we'll see you at lunch.