FILE PHOTO: The Zynga logo is pictured at the company’s headquarters in San Francisco, California April 23, 2014. REUTERS/Robert Galbraith/File Photo
May 1, 2019
By Arjun Panchadar
(Reuters) – Zynga Inc on Wednesday forecast bookings well above Wall Street expectations after beating first-quarter estimates, powered by demand for its games such as “CSR Racing 2”, as well as acquired franchises like “Empires & Puzzles”.
The company, once known for its Facebook-based desktop games such as “Farmville”, has been focusing on mobile-centric games and on acquisitions of smaller studios such as Gram Games, Small Giant Games and the card and board games studio of Peak Games to power growth.
Zynga also said it was raising its 2019 forecast for revenue and bookings, also bolstered by a strong slate for the second half of the year with games such as “Harry Potter” and “Game of Thrones”.
The company said the raised guidance put it on track to deliver the strongest annual revenue since 2012 and highest bookings in its history.
“There’s a real renaissance and strong growth in mobile right now… our games are hitting the mark from a quality standpoint and from an audience standpoint,” Chief Executive Officer Frank Gibeau told Reuters.
Zynga posted first-quarter bookings of $359 million, beating estimates of $326.6 million, according to IBES data from Refinitiv.
San Francisco-based Zynga said it expects second-quarter bookings of $360 million, well above analysts’ estimates of $327.8 million.
Bookings are an important measure of future revenue for companies like Zynga which sell virtual goods such as currency and lives inside the smartphone gaming apps.
Zynga’s mobile revenue, which accounted for 93 percent of total revenue, surged 35 percent to $246 million in the first quarter ended March 31.
However, the company’s average number of daily active users came in at 22 million, missing estimates of 26.4 million.
Zynga reported a net loss of $128.8 million, or 14 cents per share, in the quarter, compared with a profit of $5.61 million, or 1 cent per share, a year earlier.
The company’s shares, which closed down 2.7 percent in regular trading, have gained about 40 percent since the beginning of the year.
(Reporting by Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila)
