Roblox shares plunged 18% following first-quarter earnings as new child safety measures disrupted user engagement. The company's age-check feature restricted communication between users, slowing new user acquisition. CEO David Baszucki defended the approach, calling it "the real, right long-term way to build this platform" despite immediate headwinds.

The safety initiatives impacted financial expectations significantly. Roblox cut its 2026 bookings forecast by nearly $1 billion, now projecting $7.33-7.6 billion versus the previous $8.28-8.55 billion range. The company reported that 73% of age-checked daily active users were under 18, with 35% under 13, explaining the communication restrictions for younger users.

Roblox faces over 140 lawsuits in federal court alleging failures to protect children from sexual exploitation. Last month, the company settled with Alabama and West Virginia for $23.2 million combined. Despite these challenges, Q1 results beat expectations with a smaller-than-forecast loss of 35 cents per share on $1.73 billion in revenue, narrowly surpassing analyst forecasts.