Good day, and thank you for standing by. Welcome to the Roblox Corporation Q2 2021 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. [Operator Instructions]. Please be advised today's conference is being recorded. [Operator's instructions]. I'll now hand the conference over to Anna Yen, Head of Investor Relations. Please go ahead.

Good morning, everyone. And thank you for joining our Q&A session to discuss Roblox in second quarter 2021 results. With me today is Roblox's CEO David Baszucki, and CFO Mike Guthrie. Before we start, I want to remind everybody that yesterday after market closed, we published the shareholding letter earnings results and supplemental materials on our Investor Relations website at ir.roblox.com. Since the letter provides a lot of details, we will make some brief opening remarks and reserve the rest of the time for your questions. For our webcast participants, please note the question icon at the bottom of your screen where you can type in your questions. We'll do our best to take as many as possible. On today's call, we may be making forward-looking statements including but not limited to statements about our future financial performance, growth rates in business and investment strategy and plan, development of new technologies, investment in and payments to developers, our ability to bring new brands, music, and recording artists to this platform, investments in international growth, the development of the members, the outcome of any litigation, and the success of and plans for recent acquisitions. Any statement that refers to expectations, projections, or other characterizations of future events including financial projections, future market conditions, or the impact of COVID on our business and on the economy as a whole, is a forward-looking statement and based on assumptions today. Actual results may differ materially from those expressed in these forward-looking statements and we make no obligations to update our disclosures. For more information about factors that may cause actual results to differ materially from forward-looking statements, please refer to the press release we issued yesterday as well as risks described in our filings with the SEC including in our quarterly report on Form 10-Q, filed for the fiscal quarter ended March 30th, 2021, and other filings and reports we make with the SEC from time to time. We will also discuss the non-GAAP financial measures. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations between GAAP and non - GAAP metrics for our reported results can be found in our press release issued yesterday, as well as in our supplemental slides, copies of which can be found on our Investors Relations website. Finally, this call is being webcast and will be archived on our website shortly after. With that, I'll turn the call over to David.

We'll start with Mike Guthrie [Indiscernible] and then I'll chime in later. Just before we hand it over to Mike, welcome everyone to our Q2 call. Reaching out to everyone out there and your families in the midst of a lingering COVID situation. We hope you are all doing well. It's been an amazing quarter for us. A year ago, we were in the midst of lockdown. It's the first quarter when we started to see a little light at the end of the tunnel. We're extremely proud and excited with our results. Mike is going to kick it off, and then I'll follow up with some comments.

Thanks, Dave. Good morning, everyone. Yesterday we published for the Q2 numbers. And we also published key metrics for the month of July, so you can see how we're doing as we start the third quarter. Just so everyone understands, we'll also be publishing August metrics in the second week of September. Look for those as a bit of an update in the quarter in Q3. And secondly, we want to go over -- it's still booking versus revenue, and completely understand that it's confusing. Booking, the best way to think about booking is the value of Robux virtual currencies purchased within the quarter. And then revenue is taking into account the deferred revenue as a result of the bookings. And you recognize our bookings generally over a 23-month period which is the average life of a pair and those numbers can change with -- the life of pair will change over time and we will adjust our deferrals as a result of that. We've seen certain things in the process comparing our revenue number to our bookings number and it causes a little bit of confusion. We currently understand the adjusted Clarity bookings in the quarter were 665.5 million. And revenue -- GAAP revenue was 454.1 million and that was up about 127% year-over-year of bookings, number was up 35% year-over-year. Anyway, sometimes in the analyst models, people call it bookings and sometimes people are referring to it as revenue. I believe if I look at all the model, I believe with the analysts mean is bookings in all other models and some of them refer to that as revenue. If there's any confusion, feel free to ask questions on the call and we will go through with everybody. The other thing we want to just get out is that when people were going through their models, we have $52 million accrual in the quarter for litigation settlement with some of the labels and publishers in the music industry. And so if you're doing adjusted EBITDA or cash flow number just make sure that you understand that accrual is in there. And we believe that's one-time in nature. And so I just want to make sure that that is properly accounted for in your models. If there's any questions, feel free to ask about that. Overall, we ended the second quarter really stronger, mapping COVID, obviously, this quarter continue to grow the business and really started off Q3 strong with July. So looking forward to talking more, and before we jump into questions, I'm going to return back to Dave.

Yeah, just a couple of highlights. Looking at our core user base, once again, very proud with our 29% DAU growth year-on-year, specifically because we've been lopping that super lockdown quarter in Q2 a year ago. Jumping to a bit of a vision we shared with all of you over the last 6 to 9 months about the future growth vectors for Roblox, one thing we're really excited about is our virtual [Indiscernible] growth. We have passed having the majority of people on our platform be 13 and over as opposed to 13 and under, which is a huge benchmark for us. And in Q2, we saw 46% 13 and up DAU growth year-on-year, which is a great bellwether for where we're going. Internationally, in Q2, second big thing, part of our vision of really bringing the whole world together, we saw 42% DAU growth outside the U.S. and Canada, which we think is spectacular. And we've also seen in response to this, a broadening and acceleration of the diversity of content on our platform which has been very satisfying as well. In Q2 last year, 58% of the remarks were coming from the top 10 experiences. That curve has flattened a bit as we have a wider array of content, and that number is now 37% in Q2 of this year. Lots of fun stuff. Looking forward to diving in with your questions. And we'll turn it back to Anna.

Great. Actually, I will turn it over to the Operator. Operator, you want to start taking questions?

Yes. [Operator Instructions] Our first question comes from the line of Alexia Quadrani with JPMorgan.

Hi. This is David Karnovsky for Alexia. I will start with the Guilded acquisition. Dave, can you maybe discuss how you plan to integrate their platform with Roblox? Do you see Roblox users on Guilded communities now? And if so, how do you see that impacting their overall experience? And then how do you plan to maintain support to the non-Roblox communities that are on Guilded? Thanks.

Yes. This really goes to a bit of our vision here. And when we speak about Roblox, we are an immersive 3D, metaverse platform Company. There are complementary product categories. Gilded within one, we might call that the social communication and community platform area. We're really interested in the way these types of product work together. We see our -- people who play Roblox use various apps sometimes to hop from place to place and communicate outside of those apps. Even though, internally, we simultaneously are hard at work on immersive spatial audio for people who are in 3D. Gilded, we came across in an amazing team. They're also extremely innovative in a lot of their ideas [Indiscernible] developing in this area of social communication platform. It gives us the opportunity in an open way to experiment with the various ways these classes of applications work together. More to come on that in the future announcements, but it really gives us the opportunity to experiment with APIs and how these products work together.

Okay. And then I was just hoping you could expand on your shareholder letter commentary on Roblox in China so far. What do we learn? How are users engaging with the experiences there relative to what you might have seen in other launch markets? And just as a follow-on, how do you evaluate the current or future regulatory risk in the market? Thank you.

Yeah. A couple of things we've started to see that we [indiscernible] can see, and one is, with this vision of a worldwide platform that simultaneously is compliant with local customs and regulations, and things like that. We've seen a few things. One is we've started to see amazing content come out of China and start to get the worldwide platform. Livetopia coming out of China and it's one of the top 12 experiences on Roblox, which is amazing. We've also seen very great success with a lot of the U.S. global content going into China, which is also a bilateral network effect. We're really excited about the traction we've seen in China with respect to just the initial user growth. And especially in China, education is so important, both learning to code, learning to create, that we think there is amazing opportunities there to adapt and be beneficial there. I just saw some stats in South Korea which shows how well our platform is working, in that the top 10 experiences in South Korea are somewhat different than the top 10 in the U.S. There's a lot of overlap with some of the very top U.S. experiences but we can also see South Korea -created experiences emerging into that top 10. And it's -- our system is working. We're seeing both cultural affinity mixed with global hits. We're very excited with the growth we've seen in China so far. It's been really gratifying to be live there in both the iOS and the Android, coupled with our partner Tencent and a government license. I think great opportunity and at the same time consistent with our values, we take a very long view in China.

Thank you.

Your next question comes from the line of Brian Nowak with Morgan Stanley.

Thanks for taking my questions. I have two. The first one is: In the second quarter, it looks like U.S. and Europe, DAUs were down quarter-over-quarter. You talked to us about sort of what you're seeing in July and August in the U.S. and Europe DAUs and sort of some of the drivers of that DAU decline? And then secondly, a bigger picture one on the competition for developers, specifically the highest quality developers. Dave, maybe talk to us about how you think about continuing to bring on and retain the highest quality developers for the ecosystem, in particular now that you have some other social networks with large budgets and capability to invest to build a metaverse potentially offering developers even higher take rates or higher and better economics, etc.

Okay. Got it. First, on DAUs in U.S. and Canada, year-over-year in Q2, they were up about 5%. I think you're referring to engagement which was down year-over-year. First of all, largest market, most users to begin with -- I think in the second quarter, it's pretty clear that as we have referenced and anticipated when we went public and we talked about the only guidance we've ever given, we expected that during the second quarter, COVID -- our modeling assumption was that COVID would go away during the second quarter. And then we would return to normal curves on sign-ups and retention conversion in monetization. That's very similar to what happened in the second quarter. By the end of the second quarter in June, there was a lot of "reopening", especially in the U.S. and Canada and the United Kingdom, and some of that has reflected in engagements, though, substantially higher than it was in 2019 on a year-over-year basis. Flux was slightly down and then now in July, it looks like some of those trends are reversing themselves. The overall growth in the quarter was definitely driven by Asia-Pacific and rest of world which includes South America and Eastern Europe. I think that's just to make sure that we get the trends exactly right.

And then this is Dave chiming in on the take rate and just a little bit of our vision going forward. For 15 years, we've been building this platform, and we've been supporting that with three major tenets. One is driving innovation, really participating in inventing and shepherding in the metaverse and in an innovative way. And what's got us here so far is many, many innovations, and we have to keep having those in the pipeline and we're trying to scale that linearly as we grow our employee base. Last year at this time, we had 750 employees. We're over 1,200 this year at the same time. The second thing is, historically, we've been a [Indiscernible] of secure play for the last 15 years. Everything we do piles into making our platform better, and we iterate that with 14 groups every single day in shifting new and interesting functionality. And third, we're in a really unique position with the foundation of stability and safety and learning. And we're growing from there. And we think that's a very positive place for people to come together of all ages, and it's a great foundation to build a really big Company on. On the check rates, in Q2, we have upped our engagement-base payouts. We -- as you can see this, I think we announced a 129 million to devs in Q2, so that's on a great track. In general, we much prefer money flowing to creators systemically as part of the self-service UGC architecture, as opposed to any hand-given grant-type program. And that number is going to keep going up. You can also see with how much cash we're generating when you look at our bookings, cash flow-type accounting, there's a lot of ring there. We're not making any announcements on the increases to our developer rate. But generally, we want to maximize the amount we're using for our employees and for our creativity, as well as what's flowing to our developers. And more to come there without any future announcements.

Got it. And just to clarify that, Mike. This is from a modeling perspective. The July DAU trends you're seeing, are you saying you're seeing U.S. and Europe DAUs up quarter-over-quarter, or is that more driven by rest of world? Just so we can understand the modeling.

I'll double-check, Brian. I think it's driven by all regions.

Okay. Great. Thanks.

Your next question comes from the line of Mike Ng with Goldman Sachs.

Hey. Good morning. Thanks so much for the question. You guys have made a ton of progress in diversifying your experiences and edging up your user base. I was just wondering if you could talk about a few of the drivers that have led to that and how that strengthens the durability of the business. And then as a quick follow-up, I was just wondering if you could preview some of the takeaways that you'd like the investment community to get from your Investor Day later this year. Thank you.

Yeah, this is Dave. I think what we're going to be showing at our Investor Day is as much transparency as we can with respect to those and what we're shipping right now, as well as our future vision. And hopefully give a glimpse into the architecture of the Company and the architecture we built to drive innovation. So look forward to some coverage, hopefully, of the whole product stack, went all the way from our apps on multiple platforms to our game engine, to our developer tooling, to our -- the technology we use to make experiences run all around the world. All the way into our platform and in through, which allows us to run a high performance and high reliability at low cost. We're hoping to show as much of this as we can and enhance the vision in all of these areas without at the same time announcing any public shift at Investor Day. Great stuff to talk about. We're actually in the middle of it, and we've been talking about it for 3 or 4 years. And a lot of the visionary stuff we put in place 3 or 4 years ago is what's been driving this position now where over 50% of the people on our platform are over 13. The -- that includes often personalized search and discovery, it includes increasing the version of our 3D engine, and it includes also a lot of things that we've spoken about that haven't quite shift now. We've given highlights that our Avatar system has a lot of opportunity. And it's going to go full UGCU, which will radically increase the diversity of the types of Avatars on our platform, which is super exciting. We've given handset over time. We would expect maybe for those to be more familiar with the movie industry, not R rated, but PG and maybe PG-13-type similarities and some of the experiences we do. And we've also been very, very hard at work with the philosophy that we're building a unified platform that has been a safe, civil, and educational for a 6-year-old, while simultaneously very interesting for 22 year old. That goes all the way from our branding to the performance of our app to the way people find content, to the way we matchmake people. So it's actually something we're right in the middle of. The amount of white space in the 13 and under market relative to our TAM is enormous because we've gotten to where we are very heavily on a very small sliver of the world population 9 through 12 year old. We think a lot of these early signs for 13 and up bode well for us.

Okay. Your next question will come from the line of Matthew Thornton with Truist Securities.

Hey, this is Anthony Duplisea on for Matt. Thanks for taking the question, guys. Wanted to ask about content expansions outside of gaming experiences. You talked about how the pipeline is evolving with music, cars, to labels. Are there any -- is there any momentum with PDS Studio networks and online market companies? And then how and when could these Company expansions start to have an impact on financials? Thanks.

Yeah. So I love that you brought up online learning. It starts internally, we have a very big vision around education on the Roblox platform. And it goes as you -- I think my hint at way beyond learning computer science, it goes into learning all topics. It goes on to learning about history immersively, all the way to learning about physics by jumping into a physics experiment. So we are hard at work. We've gone on educational vertical segment and more to come on that within Roblox. Really, when we think about the metaverse and what Roblox is, we do think it as a utility where there's going to be a lot of use cases that we can't even imagine right now. The Gucci Garden experience really for us was really interesting. It's not really a concert, it's not really a game, it's almost like going to Norma and going to an art installation. It's really the first Roblox experience my father really liked and -- just the ability to go around and see what's going on there. And that couples with Netflix's Stranger Things experience on Roblox which is much more around letting fans participate in an experience immersively, rather than watching it. And then that jumps to our vision that our hopes for the future of music where for artists and musicians today who are very creative, they need to support their careers, it's primarily live concerts or recorded right now. And those live concerts are wonderful and they're immersive, but it's hard to get more than 20,000 people or 50,000 people into a live concert. Whereas with a Zara Larsson Launch Party, for example, we've been able to go well over 4 million. And those numbers go higher still. We're very optimistic about our future where musicians can use immersive 3D with live participation that feels very different than watching video. It's with other people. We're very optimistic as a third monetization area for musicians to interact with their fans.

And, Anthony, I'll just point out that in the -- in things like Gucci Garden since we're monetizing today in very traditional ways. There's purchase of virtual goods, there was a store that launch point of Gucci Garden, and it was obviously getting complimentary with users who purchased millions of dollars of virtual items. So today, their traditional funds and monetization in the future, we obviously can imagine just the things that we can do with the brands to expand that and with the developer community as well.

Of course. Thanks, Mike.

Your next question comes from the line of Drew Crum with Stifel.

Okay. Thanks. Good morning, guys. Mike, wonder if you could drill down a little bit further on the monetization of the up-style metric that you disclosed. It seemed to flatten out in 2Q. Can you discuss some of the puts and takes on that metric? And then, Dave, just to circle back on the brand partnerships in music experiences, can you talk about any observations you've made in terms of how that's impacted new user growth and what you've seen in terms of retention/engagement trends for that cohort? Thanks.

Hey, Drew, in 3 thoughts on monetization. One is we talked earlier, there was a clear broadening of content on Roblox over the last year. As more experiences are part of the monetization engine, some of those experiences are early on and then curves of learning actually how to monetize. And so it's not unusual. A lot of things we do with Roblox, you can model through the experience curves. And so -- and some of these experiences are on the platform for longer periods of time. The developers will learn better how to monetize and users will be more engaged and they will want to monetize better. So that's one. The second thing is geographic diversification in our base. Obviously when you look at growth in Asia-Pacific and other parts of the world, again, some of those parts of the world are similar to slightly lower GDP per capita. You might have more monetization in those parts of the world. You also have early-payer cohorts. Those payer cohorts, as they get older -- and we've seen over many, many years on Roblox is payer cohorts tend to increase cumulative bookings quarter after quarter after quarter. We still have -- if we can go back to 2016 and look at Q1 2016 payer cohorts, and the cumulative bookings of that payer cohort is continuing to grow at a very consistent and healthy rate. Some of these new users and new geos are early in their -- as payer cohorts, and they're early and maturing and overtime, they will increase cumulative booking and bookings overall. My third comment on monetization is simply, just be careful when you're comparing ratios. We can have very strong bookings and very strong user growth and app DAU can go down. So is the ratio. If your users are going faster than your bookings, that would lead you to understand that in the future, you got some really powerful tailwinds around bookings but the users might just be growing faster right now. Similarly, if you look at just July, hours of engagement was really strong. 3.8 billion hours, quite honestly, was a big number. It's probably more than we expected to come out. So if I happen to be looking at bookings per hour, I might have looked at that number as having gone down in July. And I can tell you, we're very happy with bookings and are very happy with ours. So when you get to the ratio you just might have a little bit of movement back and forth. So in time and within ratio is we should just be careful and make sure we deconstruct that into the growth in the numerator and growth in denominator. But, overall, I think all of those things are weighing in, Drew. Thanks.

Yeah. And, hey, this is Dave, just following up on the brand partnerships. I'm really excited about the brand partnerships and at the same time, our core growth is driven primarily virally, well beyond the size of the user traffic we're getting from those brand partnerships. And that is organic word of mouth growth. People talking to friends coming to the platform, being referred by friends. I think we have a bit of a vision starting all the way from our foundation, that Roblox ultimately is a platform that people will use every day to play, to work, to learn together, to communicate together, to be together as a utility when they can't be together in person. And some music and concerts are an exciting way of possibly bringing people to the platform. But the retention comes from staying with friends and socializing with friends and playing with friends, following that. I don't -- it might be a little controversial. We don't need music events to grow this business enormously large. And we don't factor in -- them as a traffic source. The business is growing organically. But they are a wonderful thing on top of our core organic growth. And I think ultimately, there's a vision where these concerts and experiences will be more and more self-service. We're really focused on building the tools and technology. Just like games and experiences, concerts are built by a wide network of intermediaries. And we also have a vision ultimately that they're going on all the time, just as play is going on all the time right now.

Your next question will come from the line of Brandon Ross with LightShed Partners.

Hi. Good morning. Thanks for taking the questions. I have a big-picture one to start. And one of the more interesting parts of earnings this quarter was when Zuck said that Facebook is now a metaverse Company. And I wanted to get your perspective on how you think a broader metaverse will play out in the future. Do you see a distributed metaverse like the broad internet or one dominated by a few key platforms like social media? And do you think companies like Facebook will have a real place in the metaverse, or do you think metaverse native companies will be the only real winners?

Yeah, that's a wonderful question. It goes to what we've been doing for 15 years. And I'll start with a couple of comments, just big picture comments. The technology is very complex. The technology to support ultimately a 50,000 person concert where we all feel like we're there, we can talk to our friends next to us, we can wave across the stadium, it feels photo-realistic. The audio is awesome, and there's 50,000 people doing that. That's a huge technological challenge. And side by -- so that technological challenge, I just want to put that out there in that it's very exciting that there's so much work to do. And we're pretty far into this. If we look back to second-line [Indiscernible].com, this started a long time ago so there's a lot of fun stuff to do. Our focus for the last 15 years has been on innovation, and invention, and really shepherding in where we feel the metaverse is going to go. Whether it's when we had 4 people and now we have 1,200 people, that will continue. There is a wonderful focusing effect for a Company like ours when we're only working on one thing. And everything we do piled into making this single platform better and better. We do have this Roblox benefit of extreme focus with now 1,200 people on that growing. The other thing that we believe that long term for a metaverse utility, it must be a civil and fixed platform that welcomes 6-year-olds, and at the same time welcomes 30-year-olds who are working together. This is very complicated and it's -- this takes -- I think it's much easier to start from that stability and safety combination and then open up the freedom, than to try to reel it back in and go the other direction. And so we really think that's a wonderful opportunity for us as well. I think as far as openness, we're signaling that with our acquisition with Guilded right now. And we do think the various components that people might create and use as part of their metaverse experience, including the way a social community communication app interacts with an immersive 3D spatial audio app is very interesting. And I think there's amazing opportunity for creativity on that integration. So those are a few hints at how we view, what we're doing for the last 15 years and what we'll do for the next 15 years.

Well, maybe just a follow-up on Guilded. And I saw that voice and video were a big part of that. I wanted to ask if you move from more tech space communication to integrating voice and video for communications, from -- how much harder of a problem is that from a safety perspective and how prepared are you for the explosion of those form of communications on Roblox?

We take it -- it's really our top priority. Civility [Indiscernible], whether it goes to how we filter text, whether it goes to thousands now of live human moderators out in the field, whether it goes to the ML that we use to filter, it's always been our top priority. And doing this for voice and video, ultimately is very complex. It's something we take very seriously. But we -- we'll come at it from that safe foundation that we've always had. On the audio side, to clarify, I believe there's two classes of audio. What Guilded does is -- think of it as team audio. It's the audio, maybe like in a phone call, really that groups of players use that they opt around various experiences. And I think we've in our Guilded announcement, we haven't done anything with Guilded, that they will still not keep working with other platforms as well. There's a lot of people from many, many gaming communities on the Guilded platform. Simultaneously, we have a vision of metaverse audio. It's what we shared with you, and that's what we do at our Company holiday parties. It's what we've been prototyping internally, which is really true 3D immersive audio. We think these are going to complement each other in a wonderful way.

Thank you.

We'll now take questions from the webcast audience.

Okay. The first one is from Richard J. (ph). Can we talk about the trends, particularly usage and spending trends, between the over-13 and under-13 audience?

I'll pass that over to Mike.

Yeah. They're incredibly similar, is the short answer. If you -- share engagement and monetization in -- whether under 13 or over 13 is actually quite similar.

And the follow-up to that was being curious if we're seeing partnerships with Gucci helps stimulate demand for Avatar personalization?

This is a really great, big question. The demand is everywhere. And when people participate in an immersive 3D environment, It's so important. We all want it, and our younger players want it, and our older players want it. Everyone wants to represent themselves in the metaverse in a way they feel proud of and they feel comfortable with. And when we look at how we work in the real world, I was very picky today on what shirt I picked out, what shoes I wore, how I cut my hair. This all applies in the digital world as well, and it goes to body, clothing, hair, clothing, hair, makeup, accessory, glasses, everything. So building a system where we can have a vibrant market, where people can mix and match, where clothing items work on any Avatar, where people can have anybody they want and any face they want, is super important to us. And I think it's worthy. It's really been part of Roblox since we started and there's an amazing opportunity there.

Great. We've got a lot of questions coming in about China, particularly, what is our response to the government's comments on the dating case.

Yeah. We're -- one of the reasons that Tencent and Roblox was so excited about going into China is how focused parents and kids are in China on education, and how focused they are on learning to code, on participating in creation. And that thread, it has been very, very powerful to us. The other thread that has been very powerful to us is, country by country, we're building a distributed worldwide platform that is policy aware in software of the rules and regulations of any country. And if a country has a certain set of laws, we will abide by them. And our developers are also very understanding that the content they create will, country by country, either be applicable or not. We have a very long-term view in China. A lot of the play on Roblox is both educational as well as social that goes way beyond gaming. Our response is really no response. It's to keep doing exactly what we've been doing. We have a 10-year vision there. We know it's going to be big and interesting. And we're in this unique position with our Tencent partnership and government license live on IOS, live on Android, and bilateral network effects; the great, global content going into China as well as great China content starting to hit the world market. So our response is to keep doing what we've been doing.

Okay. Great. The next one comes from [Indiscernible]. Can we provide color on the trajectory of expenses versus bookings growth over the next couple of years? Obviously, there's going to be some catch-up in building the platform, but any insight into the trends?

So we've been really clear in our discussions around investment but we have a real focus. The first is hiring the best engineers in the world, tracking down great product professionals through Roblox and we will continue to focus on that. The Company is laser-focused on recruiting and growing. We're around about 1300 employees today, which is fantastic, but our ambitions require a significantly larger group of professionals working in the Company. The second thing is to increase investment in the creator community and developer community on Roblox and continue to share a greater percentage of economics with them over time. Both of those, in a factor, are circulating back into faster and more prolific product releases, which tends to drive more content, which tends to drive higher bookings. Generally, we view our business as having the kinds of cash flow margins where our ability to invest is relatively unconstrained. And we're very fortunate to be in that situation. We produce a lot of operating cash flow. And even though we continue to invest in the infrastructure around the world on Roblox in states [Indiscernible] India that we talked about in the letter, we've still been able to go to the long run and generate a lot of free cash flow. And so we have the ability to invest more aggressively because, ultimately, what we're interested in is a billion users. Not high 40 million daily active users. potentially, a billion hours of engagement every day on the platform, not -- obviously, a much smaller number today. We'll continue to invest at heavy rates. We believe, ultimately, the bookings will support that, but we do have a lot of flexibility in terms of margin and we view that as really fortunate -- that's a fortunate outcome of our business model. And ultimately, we're trying to get to our end goals of growth and scale as quickly as we can. Those are the major areas that we'll be investing in.

Yeah. And this is Dave chiming in and riffing on what Mike said there. Kudos to our core platform and infrastructure teams to build such an amazingly high performance, low cost, high-reliability network around the world. We've got over 24 edge VA centers now. We've got 4 in China, we've got 3 primary zones. It's really -- that is all money that we're able to funnel back to employee growth and our developer ecosystem.

Okay. So the next question talks about July. Great July month. Can you talk about the underlying drivers as the performance? And also specifically how maybe give some color on how August and September last year, with the trends we're given the seasonal impact of back-to-school, in terms of DAUs, booking, and monetization?

Yeah, I'll take the second question first. If seasonality of business is a typical speaking that would be the summer peak is July, August people start going back to school, and in September, it is back to school. So sequentially, it's a bit high in August, it is lower in July, and September is back-to-school time. If I were, I would look very carefully at year-over-year growth rates in this business now. We're starting to come back to a more normal seasonality which means, I think, that year-over-year data is insightful. And I think we're also comparing into our expectation and belief, and certainly what's embedded in our financial expectations, is that notwithstanding Delta variant. Schools are opening in September. Offices are reopening. That's what we all hope for, personally, and that's what we're expecting. I think those normal curves will prevail in the third quarter and in the fourth-quarter. Again, the typical seasonality, we talked about this before, is that October, there's usually a pick up from September and November. Eventually, you get to start the holidays and things pick up in December. It's always very outside in terms of that month. And that's -- that hasn't changed, and that's very normal. And we talked about that before, and I think that's what we'll see in the back half of this year. The question on what do we attribute the trend in July. It's -- we're very happy to report monthly metrics. It's a great way for everyone to keep up with the business. The trends don't change very much month-to-month. We have been -- I've been the CFO of the Company for going on 4 years, and we've been talking about international growth and aging of the platform and making those investments for the entire -- my entirety here at the Company -- we're making progress on those for my entirety at the Company. And I think what you saw in July possibly that there's little bit of COVID impact between June and July, where things were definitely up ending up in June and July, and it is a little more questionable. On the other hand, there's some of the other trends that are going on inside the business that I think drive, growth, and performance, that it's hard to just separate into one of those. Again, much more content on the platform, a diversity of concept on the platform. Users growing really fast in places like Asia Pacific and rest of the world. some new players coming onto the platforms that were early in their payer cohorts. There's a lot of different things I consider that are -- that feed into the numbers. And I would -- I just always caution people month-to-month. I'm not sure that the trends change dramatically. Unless there's a really big macro shock, you should believe that we're doing the same things to grow the platform with an incredibly long-term perspective.

Okay. Can we talk about the investment strategy in more detail? Are we investing enough on the creator side to differentiate roll-off studio relative to Unity, Unreal, and other games?

Yeah. I want to highlight and then I'll kick it over to Mike. Once again, our belief in system-wide investment, which means it's self-service, we have 2 ways that our developer community does business. The first is on the Robux economy. The second is on engagement-based payouts. We are really proud with what the engagement-based payout system has done in that over time, more and more developers down ranking 1000+ are starting to make a living on our platform without even thinking about it, and this goes to hobbyists or new developers. We really focus on the depth of that pipeline and getting people successful early on so they can make a decision to jump onto the platform. We increased those in Q2. There is a lot of room to turn those knobs, even though we're not announcing anything as we look at where our cash is right now. And we would always prefer to turn those knobs rather than doing manual by-hand type investment programs. Our top developers now, whether they're organic on the Roblox platform, where outside companies like the companies that are coming on platform to dill experiences. It's getting very pretty serious business. Tens of millions of dollars a year, larger and larger teams with VC back teams. I think you can see, say, the future for us will continue to be UGC and really system-based, and there's a lot of room there. I think that [Indiscernible] can attract [Indiscernible] 2 years is up by about 5x and that will continue. Then, Mike, I know -- would you like to add on to that?

No. I think in the first half of the year it's about just under $249 million. We talked a little bit about where we hope that will be on our last call and obviously, it's on track. Again, we really remain razor-focused on our investment, infrastructure, talent inside the Company, and the developer community. And outside of that, actually, we're really careful about our investment. We really are quite focused. The only other significant investments that you're going to see within our numbers in the quarter of the back-half of the year will be a little bit around tending improvements because we're growing and we need more space and then that's a good thing. We've got on a great campus [inaudible] they're very well located. So we'll make some investments there, but we're incredibly careful about where we put our capital. And I think we're in a really privileged type because the business, over the 15 years that it's been in existence has -- most of the cash that we see on the balance sheet is generated by the business. And so, again, it's the flexibility to continue to invest at high rates. And, historically, those investments have proven to be productive in terms of -- from the top line of the business, that's been -- it's been a really great match in terms of the financial model. But that -- we'll continue to do those things.

And then I think 2 more. Quick one, fraudulent credit card usage accounting for 5% of bookings. Has it been a persistent problem, and how are we planning on tackling this internally?

We have a whole team that's focused on fraud. The numbers have bounced around a little bit, but I know I would have seen that -- you're going to see that number ticking up and causing us any significant issues. But we're focused on it, absolutely. We're laser-focused on making sure that fraud is as low as it possibly can be.

Okay. And then the last question is on the slow burn. Can we talk about the traction we're seeing with new developers, professional studios, and higher-quality content coming up?

Yeah, this is Dave. I'll chime in. I think [Indiscernible] is a great example. It's out of the team in Shanghai, and they broke into the top 12. We have this vision; both the current people on our platform are right now growing into studios that are competitive with any external studio. The top 5, 10, 20 teams on Roblox are big, they're talented, they're out recruiting on universities through programming talent, they stand side-by-side. And we're really proud that we've grown these internal studios. At the same time, external studios, whether they're VC backs, whether they are backed by other larger studios, we're seeing those as well. So great traction. China, Shanghai studio breaking into the top 12 on Roblox. Great. We'll be signing up.

Great. I think that's all the time we have for today. I will now hand it back over to David.

Yeah. Just certainly back. Wishing you, your friends, your families, the Roblox community, a hopeful and safe emergence from this COVID situation. And thank you for all your support.

Great. Operator.

Thank you, ladies and gentlemen. This concludes today's conference call. You may now disconnect.