[toc]Zynga profits in third quarter topped franchise history records in the social casino sphere.
Zynga Poker mobile revenue was up 78 percent year over year, with mobile bookings up 81 percent year over year, according to Zynga’s Q3 2017 Financial Results Earning Slides. The company attributed this rise to a focus on challenges, leagues, and jackpots.
Zynga Poker represented 24 percent of the total online game bookings, with slots the only competitor topping it with 26 percent of the total $165 million pie. Gaming revenue followed a similar trend with 22 percent and 26 percent, respectively.
Frank Gibeau, CEO of Zynga, spoke with VentureBeat about the company’s continued progress:
“It was our best performance in four years. Our fifth consecutive quarter of growth across bookings, seventh consecutive quarter of EBITDA growth. The finance department was really excited that for the first time since going public, Zynga has delivered two consecutive quarters of net income.”
Zynga reports solid numbers in Q3
Cash flow for the company was $35 million in the quarter, up $14 million year over year. Mobile as a whole was up 33 percent this year, representing a total now of 87 percent. Zynga sits at 19 million daily active users, up almost 20 percent this year, along with mobile user pay.
Zynga Poker, CSR 2, and Words with Friends largely drive the growth.
Here’s a closer look at some of the numbers both on and off the stock market:
- Reported $0.02 earnings per share for the quarter, beating a $0.01 estimate from Thomson Reuters
- Revenue of $224.6 million during the quarter compared to $211.98 million analyst estimates
- Quarterly revenue up 23.1 percent compared to Q3 last year
- Exchange average volume: 10,652,535
- 52-week low: $2.40; 52-week high: $4.09
Zynga continues to be the subject of multiple research reports, which range from buy ratings to hold and back again. The company currently has an average rating of buy and an average price target of $4.11, according to the Ledger Gazette.
Other notable changes in Zynga stock
Director Ellen F. Siminoff sold 12,000 shares of Zynga stock at an average price of $3.79 for a total of $45,480. This brings the director’s total to 122,478 shares, valued at just over $464,000.
Insiders sold 36,000 shares of the company in the last 90 days. Due to this exchange of roughly $137,000, the insiders now own almost 12.5 percent of the company’s stock.
Manufacturer’s Life Insurance Company increased its position with the company by 23.2 percent during the second quarter, buying 5,815 shares. Of the company’s total stock, institutional investors and hedge funds own roughly 69.3 percent, according to Ledger Gazette.
Growth projected in Zynga’s near future
Analysts project that Zygna will post $214.4 million in sales for the current fiscal quarter. Overall estimates range from $210 million to $217 million. With $201.5 million last year this quarter, the company would grow 6.4 percent.
Current estimates for the full year range from $840 million to $850 million. Next year looks just as bright, with estimates ranging from $881 million to $950 million. Gibeau said this pace should continue.
“If you look at the story of the quarter, it was the continued performance of our forever franchises, strong momentum in mobile, and then beating consensus and guidance. We’re very excited about where we’re at. We do have some additional news. We’re actively trying to grow the company, and we’re pushing live ops really hard. We’re also introducing new games.”
Taking over casual card games on mobile
Included in that announcement of new versions of old games (Words with Friends 2), Zynga also entered into an agreement with Peak Games to take over their card and board game group. Gibeau and Zynga embraced poker and solitaire, and are taking that one step further into the “casual card-based games on mobile” franchises.
Zynga bought the spades game from Peak, and will utilize that presence to maintain the world’s largest card-based game portfolio on mobile.
Beyond this growth, Zynga will drive live operations, release new games (with new IP and strategic licenses), invest in chat and augment reality (new platforms and new business models), and to continue to press the mobile opportunities.
Gibeau does see crossover between causal games and social casino. He told VentureBeat that even with this crossover, this will inspire a new audience.
“The acquisition will actually add several million DAU [daily active users] to our overall mobile business. A lot of those will be incrementally new,” he said.
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