A child looks back at a banner for Roblox, shown to celebrate the company’s IPO, on the front facade of the New York Stock Exchange (NYSE) in New York, March 10, 2021.

Brendan McDermid Reuters

Shares of Roblox rose 10% on Wednesday morning, marking a sharp reversal from an initial drop of 10% on Tuesday night after the company posted disappointing earnings for the first quarter.

Shares settled slightly during trading and rose only about 5% by 13:30 ET.

The company reported a loss of 27 cents per share compared to the loss of 21 cents per share expected by Wall Street, according to Refinitiv. Analysts also expected $ 645 million in revenue, but the company reported $ 631.2 million. The company’s provisions decreased by 3% during the quarter. It also reported 54.1 million average active users daily in its first quarter, which is below the StreetAccount consensus of 55 million.

Although it is not clear what is driving the jump, the company seems to be tuned to growth rates in the current quarter. The online gaming platform faced difficult comparisons to its performance earlier in the pandemic, when children were glued to their TVs and gaming platforms as a way to have fun in a blockade.

“We expected annual growth to the bottom in April. At the moment, it seems to have bottomed out in March, which is good, so consistently our growth rates in April were better than in March, and on an annual basis I expect that to be true in May and again in June. ” said Roblox CFO Michael Guthrie during the company’s conference call with investors on Wednesday morning, according to a rough transcript.

“In terms of the overall shape of the curve, it’s usually … maybe lower than April, then June is higher again than May and really, the opening of the summer season, where normal seasonality begins,” Guthrie added.

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