Zynga grows revenue 27% to $265 Million
Zynga reported big revenue growth of 27% and bookings growth of 64% for the first quarter of 2019 thanks to games such as Empires & Puzzles, Merge Dragons, Words With Friends, and CSR2. But the company reported a bigger loss since it had to pay bigger bonuses.
Revenues were $265 million for the quarter, with bookings at $359 million. Mobile revenue was $246 million, up 35%, and mobile bookings were $341 million, up 77%. Mobile now accounts for 93% of revenue and 95% of total bookings, with desktop web account for the rest.
Analysts had expected revenues of $240 million and bookings of $359 million, with earnings per share of 5 cents. Zynga blew past the revenue and bookings numbers. But the company had to pay a big bonus to the acquired companies, Gram Games and Small Giant Games, that pushed it into a deeper loss than previously expected.
Zynga CEO Frank Gibeau said that the company is raising its full-year forecast for revenues by $50 million to $1.2 billion (up 32% from the 2018), based on the first quarter results. Much of that is due to the surprisingly strong performance of the newly acquired games, Merge! Dragons and Empires & Puzzles, as well as Zynga’s existing “forever franchises,” or games that generate more than $100 million a year for a period of years.
“It was one of our best quarters ever,” Gibeau said. “It is a testament to the live services portfolio that we have vibrant franchises. It’s a pretty exciting time for us and we’re getting our product lined up for the rest of the year with Game of Thrones Slots Casino and Puzzle Combat.”
The quarter reflected Zynga’s highest mobile revenue and bookings quarter ever. Bookings are expected to hit $1.45 billion for the year, up 50 percent from a year ago and up $100 million from previous guidance. That puts Zynga on track for its strongest annual revenue since 2012 and the highest bookings in Zynga’s history.
Gibeau said the company will also launch new games in the second half of 2019 that will help it grow in 2020 and beyond.
The company recently soft launched two new games — Game of Thrones: Slots Casino and a title from Small Giant Games, Puzzle Combat — to begin gathering player feedback and testing for long-term engagement.
The company saw record mobile online game — or mobile user pay — revenue of $183 million, up 31% year-over-year and mobile user pay bookings of $278 million, up 85% year-over-year.
The company also had its highest first-quarter mobile advertising quarter with mobile advertising revenue of $63 million, up 48% year-over-year, and mobile advertising bookings of $63 million, up 46% year-over-year.