Zynga
ZNGA
reported a loss of 2 cents per share in first-quarter 2022, in line with the loss per share reported in the year-ago quarter.
Quarterly revenues inched up 1.6 % year over year to $691.2 million, driven by strength in demand for live services.
The Zacks Consensus Estimate for earnings and revenues was pegged at 5 cents per share and $749 million, respectively.
Total bookings came in at $695 million, down 3.5 % year over year. The consensus mark for bookings was pegged at $749 million.
In January, Zynga entered into a definitive agreement with
Take-Two Interactive
TTWO
.
Per the agreement, Take-Two Interactive will acquire all of Zynga’s outstanding shares. The acquisition, as announced, is a cash-and-stock deal, implying an enterprise of $12.7 billion.
Zynga Inc. Price, Consensus and EPS Surprise
Zynga Inc. price-consensus-eps-surprise-chart
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Zynga Inc. Quote
Quarter Details
Zynga’s online game or user-pay revenues (77.8% of total revenues) fell 3.5% year over year to $537.7 million.
Advertising and other revenues (22.2% of total revenues) increased 24.5% year over year to $153.5 million. Advertisement bookings (24.1% of total bookings) rose 35.1% year over year to $166.50 million. The upside was driven by robust growth in Zynga’s hyper-casual portfolio.
Mobile revenues (97.3% of total revenues) inched up 1.7% year over year to reach $672.2 million. Mobile bookings declined 3.4% year over year to $676 million. The upside can be attributed to solid demand for its live services.
User Base Details
In the first quarter, user-pay bookings were $528 million, down 11% year over year. The downside was caused by tougher year-over-year comparisons.
Zynga’s average mobile daily active users (DAUs) moved up 5.3% year over year to 40 million. Average mobile monthly active users (MAUs) soared 27.4% year over year to 209 million in the reported quarter.
Average mobile daily bookings per average mobile DAU (ABPU) declined 6% year over year to $0.19.
Operating Details
Non-GAAP operating expenses (52.4% of total bookings) rose 2.9% year over year to $364 million in the reported quarter due to higher investments in the company’s advertising platform, new markets and technologies
Non-GAAP research & development (R&D) and sales & marketing (S&M) expenses shot up 13% and 0.6% year over year to $93.8 million and $246.2 million, respectively. General & administrative (G&A) expenses declined 7% year over year to $24 million.
Adjusted EBITDA came in at $144.4 million compared with the year-ago quarter’s figure of $123.1 million.
Balance Sheet
As of Mar 31, 2022, Zynga had cash, cash equivalents & short-term investments of $826 million compared with $1.15 billion as of Dec 31, 2021.
Cash flow used in operating activities in first-quarter 2022 was $202.7 million compared with the year-ago quarter’s level of $163.7 million. The cash flow provided by operating activities in the previous quarter was $158.1 million.
Free cash outflow was $213 million in the first quarter compared with the previous quarter’s free cash inflow of $152.4 million and the year-ago quarter’s outflow of $165.4 million.
Zacks Rank and Stocks to Consider
Currently, Zynga carries a Zacks Rank #3 (Hold).
ZNGA shares are up 20.1% in the year-to-date period against the Zacks
Gaming
industry’s plunge of 35.5% and the
Consumer Discretionary
sector’s fall of 29.5%.
Some better-ranked stocks from the Zacks Consumer Discretionary sector are
Planet Fitness
PLNT
and
SeaWorld Entertainment
SEAS
, each carrying a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here
.
Planet Fitness shares are down 23.8% in the year-to-date period against the Zacks
Leisure and Recreation Services
industry’s decline of 23.2% and the Consumer Discretionary sector’s fall of 29.4%.
SeaWorld Entertainment shares are down 14% in the year-to-date period against the Zacks Leisure and Recreation Services industry’s decline of 23.2% and the Consumer Discretionary sector’s fall of 29.4%.
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