Roblox shares plummeted after the company lowered its annual bookings forecast, sending shares down over 18% in extended trading and causing a 24% plunge in premarket trading on Friday.
First-quarter users fell short of analysts' expectations following the implementation of safety features that restrict how children, who make up the majority of the platform's audience, can use the service. There are concerns that these safety initiatives may weigh on user growth and spending for several quarters.
The company has adjusted its full-year revenue forecast to between $5.87 billion and $6.14 billion, a decrease from its previous outlook of $6.02 billion to $6.29 billion.
These developments occur as Roblox faces over 140 federal lawsuits accusing the company of failing to prevent child exploitation. The company settled with Alabama and West Virginia last month.