Why Zynga Stock Plunged Today

Business

Motley Fool 06 August, 2021 - 03:21pm 15 views

Why did Zynga stock drop?

Zynga stock was plunging after the company signaled that people were spending less time playing mobile games as the economies in the U.S. and elsewhere begin to reopen. Barron'sZynga Stock Is Plunging After Earnings. Here's Why.

A Florida pastor says 6 members of his church have died from COVID-19 in the past 10 days

Barron's 07 August, 2021 - 03:25pm

Senior Pastor George Davis, who preaches at Impact Church in Arlington, told News4Jax there are 15 to 20 members of his congregation that are currently in the hospital with COVID and his phone hasn’t stopped ringing in the last week.

Senior Pastor George Davis, who preaches at Impact Church in Arlington, told News4Jax there are 15 to 20 members of his congregation that are currently in the hospital with COVID and his phone hasn’t stopped ringing in the last week.

“In the last 10 days, we have had six members of our church who passed away from COVID. Four of them were under the age of 35. All of them were healthy, and the only thing they had in common was they were not vaccinated,” Davis said.

The pastor says there’s an additional 10 people who are at home with the coronavirus and three-to-five vaccinated members also tested positive. “It’s pain,” Davis said. “These are actual people that I know, that I have pastored. One 24-year-old kid, I’ve known him since he was a toddler. The first memorial service for the members who have died is scheduled for this weekend.

This week, the Florida health department reported an average of 19,215 COVID cases per day. About 1 in 5 of all COVID cases in the U.S. have been reported in Florida over the past couple weeks, according to the U.S. Census Bureau.

The Centers for Disease Control and Prevention (CDC) also reported this week, Florida leads the nation in the number of adults and children admitted in hospitals with confirmed cases of COVID-19.

Pastor Davis told the Jacksonville TV station that it wasn’t until July when he first found out about a member testing positive. Since then, cases have piled up and many people are dying shortly after they go to the hospital, the pastor mentioned.

Impact Church follows the CDC guidelines, practices social distancing, offers hand sanitizer and aggressively cleans the auditorium in between services. While members from the church are contracting the virus, Davis said he is certain they are catching COVID outside of the church.

The pastor has quickly become a staunch advocate for the COVID vaccination. He’s encouraging his members and others to get informed about the disease and get the jab. On Sunday (Aug. 8), Davis and his church will be hosting an event where they will be offering the Pfizer vaccine for churchgoers and other members of the Jacksonville community. “All I know is my heart’s passion is to help the people that I’m called to serve and do whatever I can to help see to it that they are in a healthier place,” Davis said.

Check your inbox for a welcome email.

A Florida pastor says 6 members of his church have died from COVID-19 in the past 10 days

Investor's Business Daily 07 August, 2021 - 03:25pm

Senior Pastor George Davis, who preaches at Impact Church in Arlington, told News4Jax there are 15 to 20 members of his congregation that are currently in the hospital with COVID and his phone hasn’t stopped ringing in the last week.

Senior Pastor George Davis, who preaches at Impact Church in Arlington, told News4Jax there are 15 to 20 members of his congregation that are currently in the hospital with COVID and his phone hasn’t stopped ringing in the last week.

“In the last 10 days, we have had six members of our church who passed away from COVID. Four of them were under the age of 35. All of them were healthy, and the only thing they had in common was they were not vaccinated,” Davis said.

The pastor says there’s an additional 10 people who are at home with the coronavirus and three-to-five vaccinated members also tested positive. “It’s pain,” Davis said. “These are actual people that I know, that I have pastored. One 24-year-old kid, I’ve known him since he was a toddler. The first memorial service for the members who have died is scheduled for this weekend.

This week, the Florida health department reported an average of 19,215 COVID cases per day. About 1 in 5 of all COVID cases in the U.S. have been reported in Florida over the past couple weeks, according to the U.S. Census Bureau.

The Centers for Disease Control and Prevention (CDC) also reported this week, Florida leads the nation in the number of adults and children admitted in hospitals with confirmed cases of COVID-19.

Pastor Davis told the Jacksonville TV station that it wasn’t until July when he first found out about a member testing positive. Since then, cases have piled up and many people are dying shortly after they go to the hospital, the pastor mentioned.

Impact Church follows the CDC guidelines, practices social distancing, offers hand sanitizer and aggressively cleans the auditorium in between services. While members from the church are contracting the virus, Davis said he is certain they are catching COVID outside of the church.

The pastor has quickly become a staunch advocate for the COVID vaccination. He’s encouraging his members and others to get informed about the disease and get the jab. On Sunday (Aug. 8), Davis and his church will be hosting an event where they will be offering the Pfizer vaccine for churchgoers and other members of the Jacksonville community. “All I know is my heart’s passion is to help the people that I’m called to serve and do whatever I can to help see to it that they are in a healthier place,” Davis said.

Check your inbox for a welcome email.

Zynga Announces Second Quarter 2021 Financial Results

Financial Post 06 August, 2021 - 09:46pm

Zynga management will also host a conference call at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) today to discuss the company’s results. Questions may be asked on the call and Zynga will respond to as many questions as possible.

The conference call can be accessed at http://investor.zynga.com – a replay of which will be available through the website after the call – or via the below conference dial-in number:

Zynga is a global leader in interactive entertainment with a mission to connect the world through games. With massive global reach in more than 175 countries and regions, Zynga has a diverse portfolio of popular game franchises that have been downloaded more than four billion times on mobile including CSR Racing™, Empires & Puzzles™, Hair Challenge, Harry Potter: Puzzles & Spells, High Heels!, Merge Dragons!™, Merge Magic!™, Queen Bee™, Toon Blast™, Toy Blast™, Words With Friends™ and Zynga Poker™. With Chartboost, a leading mobile advertising and monetization platform, Zynga is an industry-leading next-generation platform with the ability to optimize programmatic advertising and yields at scale. Founded in 2007, Zynga is headquartered in California with locations in North America, Europe and Asia. For more information, visit www.zynga.com or follow Zynga on Twitter, Instagram, Facebook or the Zynga blog.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those statements relating to, among other things: Zynga’s current and future operations and initiatives, including potential for future growth in our business; the ability to achieve the intended benefits of the acquisition of Chartboost, Inc. (“Chartboost”), our projections regarding future financial and operating performance, and our ability to effectively compete in the global advertising industry; and the proposed acquisition of Beijing StarLark Technology Co., Ltd. (“StarLark)”, the Golf Rival mobile game franchise and related other games, intellectual properties, business records and specified other assets and liabilities, including our ability to achieve the intended benefits of the acquisition and leverage Zynga’s platform and capabilities to drive further growth. Forward-looking statements often include words such as “projected,” “planned,” “intend,” “will,” “anticipate,” “believe,” “target,” “expect,” and statements in the future tense are generally forward-looking. These forward-looking statements are not guarantees of future performance and reflect management’s current expectations. The achievement or success of the matters covered by such forward-looking statements involves significant risks, uncertainties, and assumptions, and our actual results could differ materially from those predicted or implied. Undue reliance should not be placed on such forward-looking statements, which are based on information available to us on the date hereof. We assume no obligation to update such statements. Factors that could cause actual results to differ include: our ability to effectively integrate Chartboost and achieve the expected benefits of the transaction; the impact of the acquisition on Zynga’s and Chartboost’s business and operating results and our ability to maintain relationships with business partners; satisfaction of StarLark transaction closing conditions and our ability to timely close the transaction; our ability to effectively integrate and achieve the expected benefits of the acquisition of StarLark and related transactions; risks of litigation and/or regulatory actions related to these transactions; and our ability to effectively compete in the mobile advertising and mobile games industries. More information about these risks, uncertainties, and assumptions and additional factors that could cause actual results to differ are or will be described in greater detail in our public filings with the Securities and Exchange Commission (the “SEC”), copies of which may be obtained by visiting our Investor Relations website at http://investor.zynga.com or the SEC’s web site at www.sec.gov.

A welcome email is on its way. If you don't see it, please check your junk folder.

The next issue of Financial Post Top Stories will soon be in your inbox.

We encountered an issue signing you up. Please try again

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

© 2021 Financial Post, a division of Postmedia Network Inc. All rights reserved. Unauthorized distribution, transmission or republication strictly prohibited.

This website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Service and Privacy Policy.

Video Game Stocks Hit By 'The Great Reopening' After Covid

TheStreet 06 August, 2021 - 03:10pm

Video game stocks have been among the worst performing industry groups lately.

The group got a boost last year during the Covid-19 pandemic as people stayed home during the health crisis. But now, as vaccination rates rise and the economy begins to reopen, people aren't playing video games as much.

Mobile game publisher Zynga (ZNGA) on Friday became the latest casualty among video game stocks, falling after it posted June-quarter results.

San Francisco-based Zynga late Thursday said it earned 2 cents a share on sales of $720 million in the second quarter, topping estimates. In the year-earlier period, it lost 16 cents a share on sales of $451.7 million.

Get these newsletters delivered to your inbox & more info about our products & services. Privacy Policy & Terms of Use

However, it lowered its bookings targets for the rest of the year, saying consumers are playing fewer video games as Covid restrictions ease. It cut its bookings outlook by 3% vs. its prior guidance.

On the plus side, Zynga still expects 2021 bookings to rise 23% to $2.8 billion despite tough year-over-year comparisons. And the company held its profit guidance.

But Zynga stock tumbled 18.2% to close at 7.99 on the stock market today. Overall video game stocks dipped 0.2%, according to IBD MarketSmith charts.

IBD's Computer Software-Gaming industry group currently ranks a dismal No. 192 out of 197 industry groups. A year ago, it ranked No. 13.

"When you're hot you're hot and when you're not you're not," Zynga Chief Executive Frank Gibeau told Investor's Business Daily.

"In late May through July, we started to see choppiness in our audience," Gibeau said. "We saw the easing of Covid restrictions, and a lot of people got the opportunity to go back outside. The shelter-in-place stuff started to fall away."

While its core audience, making up 85% of its base, still actively played its games, newer players gained during the pandemic played less, Gibeau said.

"The Covid cohorts that we brought in (during) 2020 really moved out into the Great Reopening pretty quickly and that put a damper on growth," he said.

The good news is that the gaming business is coming out of Covid stronger than it was before the pandemic hit in early 2020, Gibeau said.

Take-Two Interactive Software (TTWO) Chief Executive Strauss Zelnick echoed that sentiment. "The new normal is at a meaningfully higher level than pre-pandemic demand," he told IBD.

On Aug. 2, Take-Two beat Wall Street's estimates for the June quarter, but guided lower than views for the September quarter. The "Grand Theft Auto" publisher cited the reopening of the economy post-Covid as a factor for its soft outlook.

Take-Two stock sank 7.7% the day after it reported June-quarter results.

Other video game stocks that have had a rough go since earnings include Activision Blizzard (ATVI), Electronic Arts (EA) and Nintendo (NTDOY).

Activision stock fell ahead of its earnings report on Aug. 3 and then trended sideways afterward. It's facing some company-specific issues, including reports of a toxic workplace culture.

EA stock dropped 2.2% the day after its June-quarter earnings release on Aug. 4 even though the company delivered a beat-and-raise report.

On a conference call with analysts, EA Chief Executive Andrew Wilson said his company isn't seeing a noticeable impact from the post-Covid reopenings.

"Given the roller coaster nature of opening up and shutting down and lockdowns and various restrictions that are happening in various geographies and territories globally, it's almost hard to track at this juncture who is open and who is closed," he said. The delta variant of Covid-19 has caused some regions to go back into lockdown mode.

He added, "What I would tell you, though, in aggregate, is we have seen strength across our business, across all territories regardless of being open or closed."

Meanwhile, Nintendo stock fell 1.8% after its June-ended quarter report on Aug. 5, continuing a two-month slide.

IBD's Computer Software-Gaming industry group includes 17 video game stocks. The top-ranked stock in the group is Luxembourg-based NeoGames (NGMS), which provides services to lottery operators. It has an IBD Composite Rating of 85 out of 99.

8/03/2021 Video game publisher Take-Two Interactive Software late Monday beat analyst estimates for the June quarter but its outlook came up...

8/03/2021 Video game publisher Take-Two Interactive Software late Monday beat analyst...

The top U.S. pot producers have operations stretching across multiple legal states. (© Gary Neill)

Get instant access to exclusive stock lists, expert market analysis and powerful tools with 2 months of IBD Digital for only $20!

Get market updates, educational videos, webinars, and stock analysis.

Learn how you can make more money with IBD's investing tools, top-performing stock lists, and educational content.

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice.

*Real-time prices by Nasdaq Last Sale. Realtime quote and/or trade prices are not sourced from all markets.

Ownership data provided by Refinitiv and Estimates data provided by FactSet.

© 2000-2021 Investor's Business Daily, LLC. All rights reserved

Buy the Dip in Zynga Stock After the Earnings? Use Caution

TheStreet 06 August, 2021 - 01:45pm

The San Francisco social-games developer's shares are getting slugged, down almost 20% after its earnings report.

The results and outlook weren’t enough to inspire the bulls, while analysts have reduced their price targets in response.

It’s not a great showing, particularly as one analyst cited Apple’s  (AAPL) - Get Report recent privacy changes as one of the negative catalysts for Zynga.  

It wasn’t long ago that the shares were trading north of $12. Now that they're down about 35% from those highs, is Zynga worth another look?

Coming into Friday, there were already concerns about Zynga from a technical analysis perspective.

A bullish reaction would have sent the shares back over the 200-day and, preferably, back over some of its short-term moving average.

Instead, Zynga is plunging, leaving one heck of a gap in its wake. It doesn’t help that the stock is fading from where it opened, rather than rallying off the lows.

The $8 level was a key support area in November. Watch this area for a potential bounce zone. Aggressive bulls may already be long against Friday's low, but they need to use caution. 

The low from November was $7.77, which investors should keep on their radar moving forward.

A close below $7.77 that’s not quickly reclaimed could push Zynga stock down to the prior breakout zone, near $7.25.

Watch for a possible “look below and fail” of $7.77, where the shares dip below this mark — or “look below” $7.77 — and “fail” to close below it. That could be a reversal sign for longs.

On the upside, a move above Friday’s high at $8.26 and the stock can start filling in some of this massive gap, which goes all the way up to $9.64.

No matter how one cuts it, they should use caution with Zynga or consider avoiding it all together. 

Zynga’s Q2 2021 bookings of $712M are up 37% from a year ago

VentureBeat 05 August, 2021 - 03:05pm

Zynga beat analysts’ expectations today, reporting strong bookings and revenues in the second quarter that ended June 30 thanks to the  performance of its existing games Toon Blast, Toy Blast, Rollic’s hyper-casual portfolio, and Harry Potter: Puzzles & Spells.

And Zynga also kept up its acquisition spree by agreeing to acquire Golf Rival maker StarLark from Betta Games for $525 million. The Beijing company makes what it claims is the No. 2 golf match game with more than six million players. Zynga also closed its $250 million for Chartboost, a mobile advertising and monetization platform with 700 million monthly users; and its Rollic division topped a billion lifetime downloads.

However, Zynga noted some uncertainties related to Apple’s push toward user privacy over targeted advertising with its change to the Identifier for Advertisers (IDFA), and that made it more cautious about its forecast for the coming quarter and the full year. On top of that, and partly because of it, Zynga delayed the launch of Farmville 3 from the third quarter to the fourth quarter. And it also delayed the launch of  Star Wars: Hunters from 2021 to 2022. That game will still do a limited soft launch in Q4.

As a result of that cautious outlook, Zynga’s stock price is falling now in after-hours trading. The stock is at $8.10 a share, down 17%.

The San Francisco-based Zynga’s revenue was $720 million, up 59% year-over-year; and bookings of $712 million, up 37% year-over-year. The revenue number was its highest ever for the second quarter, and profit numbers were strong as well.

“We saw great results in the first half,” Gibeau said.

But he noted some of the mixed outlook comes from seeing some “choppiness” in the business related to new pandemic users going back to their non-game activities as well as the impact from IDFA changes, which make it harder to target the users that spend a lot of money in games.

“Starting in late May and early July, we started to see some choppiness in our business as it relates to the great reopening as well as IDFA,” Gibeau said. “Some of the later [new players] that joined Zynga in [2020 and] 2021 got to go out of the house, as COVID restrictions were easing. They started playing a little bit less.”

Gibeau noted that core players have been playing a lot, just as they were before COVID.

“But this one segment started to pull back a bit,” Gibeau said. “At the same time, Apple rolled out their IDFA [change] and the market got kind of choppy as well. We decided to pull back our user acquisition spending to see how it settled. We saw a reduction in audience from from the great reopening. We were also not aggressively acquiring new players because we didn’t think it was the right thing to do at that time. So that put a little bit of a softening on our revenue run rates for the second half. As a result, what we’ve done is we’ve taken the top line bookings number down 3%.”

The numbers still look pretty good. But Gibeau said, “We’re trying to do is be as transparent with folks as possible. Now, the good news is that we’re starting starting to see the recovery and the core business is strong. We’re seeing good early returns on user acquisition trends.”

Above: Zynga is buying StarLark and Golf Rival for $525M.

While the pandemic has been a tragedy in lost lives and economic hardships, gaming is one of the few industries that appears to be emerging stronger than before the coronavirus hit. People are still playing more than before, and the San Francisco firm has also benefited from its acquisitions.

Zynga has been buying aggressively under Gibeau, and the whole game industry has been following suit. In addition to StarLark and Chartboost, Zynga has been making regular acquisitions since the 2017 purchase of casual card games from Turkey’s Peak Games for $100 million. In May 2018, Zynga bought Gram Games for $250 million, followed by the late 2018 acquisition of Empires & Puzzles maker Small Giant Games for $560 million.

The big one came in June 2020 as Zynga acquired all of Peak Games for $1.8 billion. In October 2020, Zynga bought hypercasual game maker Rollic for $168 million. It took a step into PC games with the acquisition of Echtra Games, which was started by the makers of the Torchlight series. And today it closed the acquisition of Chartboost for $200 million.

Gibeau said he was pleased with the price on StarLark, given its revenues and profits.

“Golf Rival is a casual player-vs.-player (PvP) experience. It’s kind of Words with Friends with golf clubs,” said Gibeau. “It has fantasy courses, and it’s highly social. It has just started to hit its growth curve. We really love the quality of the game. We think it’s got tremendous growth in front of us. And I think it’s the fastest growing golf game right now.”

He said that if you look at the (undisclosed) revenue and profits of Golf Rival, Zynga is getting it for a good price.

“The underlying metrics, the daily active users, the conversions to paying, are all very strong,” he said. “It’s a good business from multiple standpoints.”

Gibeau said the business is also growing organically, and so Zynga can walk away from deals if they get too expensive.

Above: Zynga has teamed up with Girls Who Code.

Gibeau said in an interview with GamesBeat that the quarter benefited from live services revenue related to Rollic’s hypercasual portfolio, Words With Friends, and Zynga Poker. That was offset by lower-than-expected user pay across the portfolio. He noted that users that Zynga picked up in the second quarter of 2020 during the pandemic started playing less in Q2 of 2021 as lockdowns started to be lifted. But he noted that the core gamers continued playing as much as they ever have.

Merge Dragons and Merge Magic saw declines because they faced tougher competition in the “merge” genre, where players put different elements together to craft new items.

And Gibeau is more cautious about the second half of 2021, as he predicts annual revenue could hit $2.725 billion and bookings of $2.8 billion, less than the previously signaled target of $2.9 billion in bookings. That is due to the IDFA uncertainty, the delay in the games, and the new user uncertainties.

Building upon its successful launch in September, Harry Potter: Puzzles & Spells gained momentum as players engaged in its social gameplay. Advertising in Q2 was also a key growth contributor, hitting $133 million in revenue, up 110% from a year earlier. That was due to Rollic’s success with hypercasual games.

“Our ad business is strong, and Rollic is starting to bring in a lot of new users,” Gibeau said. “There are a lot more people in our networks playing. And we’re in a position now where we’re starting to advertise and promote things like Harry Potter, Empires & Puzzles, to get folks over. So we’ll see how it unfolds.”

Above: Zynga’s Rollic is buying the Onnect matching game for $6 million.

Apple is changing the Identifier for Advertisers (IDFA) so that people can more easily opt-out of being tracked. That’s good for user privacy. But it makes it harder to target ads at gamers who spend money, which is what game companies have had to do in the absence of great discovery on iOS devices. Without access to IDFA data, game companies will have a harder time finding users.

Gibeau said that change began to have more effect as it was implemented in iOS 14.5 in April and it became clear it was harder to target users as in the past. He expects that effect to continue in the second half of the year.

Gibeau also said the company is going to keep its profitability forecast the same. The company is not changing its guidance on adjusted EBITDA for the year, as it will focus on managing costs and focusing in on delivering profitability for our shareholders.

“As we communicated IDFA was going to be a short term headwind, as was rolled out, the industry would react and start to settle in with new tools, new techniques, new approaches, that in the long term would would start to return to normal,” Gibeau said. “I think we’re part of the way through that process. But the good news is we’re making forward progress. We’re moving our way through it.”

Zynga closed the quarter with close to 2,476 employees, and StarLark’s acquisition will add 50.

Above: Zynga is part of the #PlayApartTogether campaign to boost the WHO.

The stock market reaction to Zynga’s results is usually driven by whether it hits revenue or earnings targets. But it’s complicated, because Zynga is required to report some revenue later than when it actually receives it (like when a user buys in-game currency but doesn’t use it until much later). This is called deferred revenue. But if you add the changes in deferred revenue and current revenue, you get a better picture of the actual quarter’s results in a number dubbed bookings. Zynga’s management uses this number in how it guides expectations. And its investors view bookings as more important than revenues.

As a public company, Zynga is required to report quarterly results on a U.S. GAAP basis, while analysts and investors use non-GAAP financial metrics to assess a company’s underlying performance. Bookings and adjusted earnings before income tax, depreciation, and amortization (EBITDA), excluding the impact of deferred revenue, are among those metrics that are most highly scrutinized as they reflect the actual operating activity of the company better.

Here’s the numbers that really matter when it comes to stock market trading for Zynga’s stock. Analysts expected Zynga to report earnings for the second quarter ended June 30 of 9 cents a share on revenue of $713 million. Analysts expected bookings of $715.2 million. Zynga had guided to $710 million.

And it also beat the analysts’ profit targets. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is more closely watched as a measure of the company’s profitability. After adjustments, the figure that analysts focus on (adjusted EBITDA, excluding the impact of deferred revenue) of $165.8 million, while Zynga guided to $150 million. The comparable profit target number that Zynga hit for adjusted profits was $162.2 million, well above expectations.

Above: Frank Gibeau is CEO of Zynga.

The company had record online game (or user pay) revenue of $587 million, up 51% year-over-year, and user pay bookings of $579 million, up 27% year-over-year.

The company had record average mobile daily active users (DAUs, or those who play at least once a day) of 41 million, up 87% year-over-year, and a best-ever average mobile monthly active users (MAUs, or those who play at least once a month) of 205 million, up 194% year-over-year.

The company reported a net income of $28 million, $58 million better than its own guidance. This was primarily driven by a net change in deferred revenue, lower contingent consideration expense (payouts for acquired companies), and than-expected stronger operating performance, partially offset by higher income taxes and other expenses. On a year-over-year basis, the net income grew by $178 million, primarily due to the higher net increase in deferred revenue, amortization of acquired intangibles, and stock-based compensation, partially offset by improved operating performance and lower contingent consideration expense.

Adjusted EBITDA was $174 million, which is $59 million above Zynga’s guidance. This was primarily driven by a stronger operating performance and lower net change in deferred revenue. On a year-over-year basis, Adjusted EBITDA increased $104 million driven by a lower net change in deferred revenue and stronger operating performance. The company closed the quarter with $1.5 billion in cash and investments, which it will use to fund future and existing acquisitions.

Live services for games such as Toon Blast, Toy Blast, and social casino games were strong in the quarter. Words With Friends delivered its best Q2 revenue and bookings quarter in the franchise’s 12-year history, driven by the recent introduction of Rewards Pass and new Solo Challenge content.

Above: Zynga bought 80% of Rollic for $168 million.

In 2021, Zynga expects to deliver revenue of $2.725 billion, up 38% from a year earlier, and bookings of $2.8 billion, compared to expectations of $2.7 billion in revenue and $2.93 billion in bookings. It expects a net increase in deferred revenue of $75 million, down $220 million, or 75%, from a year earlier.

Zynga expects to generate a net loss of $135 million, in-line with prior guidance, and now including a charge of $84 million primarily related to the impairment of its existing San Francisco lease and related leasehold improvements.

Zynga anticipates a net loss of $135 million and adjusted EBITDA of $575 million. Analysts had been expecting full-year EBITDA (excluding the impact of deferred revenue) of $669.3 million. Zynga did not change its own EBITDA number for the full year of $650 million. Zynga will manage costs and beef up the introduction of new live services in the second half, Gibeau said.

Above: Harry Potter: Puzzles & Spells is another Zynga “Forever Franchise.”

For the third quarter ending September 30, Zynga expects revenue of $665 million, up 32% year-over-year, with bookings of $660 million, up 5% year-over-year. Analysts had been expecting bookings of $721 million in Q3 and they are expecting Zynga to report earnings per share of 9 cents on revenue of $721.7 million for the third quarter ending September 30.

The net loss will be $110 million, while adjusted EBITDA will be $150 million. Analysts were expecting EBITDA (excluding impact of deferred revenues) of $161.5 million, and Zynga expects it will hit $145 million in Q3.

Zynga said it will benefit from positive additions of the Rollic hypercasual games as well as a full quarter contribution from Harry Potter: Puzzles & Spells, the company anticipates this will be offset by declines in Merge Dragons and Merge Magic and older mobile and web titles. Outside of hypercasual games, Zynga is assuming it will not launch new titles in Q3.

From an ad perspective, the adoption of Apple’s privacy changes could put short-term pressure on ad revenue and bookings in Q3 compared to Q2.

Join AI & Data professionals for 5-days of content and networking.

July 12 - 16, 2021

We may collect cookies and other personal information from your interaction with our website. For more information on the categories of personal information we collect and the purposes we use them for, please view our Notice at Collection.

Business Stories