Zynga (ZNGA) Misses Q1 EPS by 11c; Guides Below

Zynga (NASDAQ: ZNGA) reported Q1 EPS of ($0.06), $0.11 worse than the analyst estimate of $0.05. Revenue for the quarter came in at $404 million versus the consensus estimate of $406.67 million.

The human costs of the COVID-19 pandemic have been extraordinary, straining global capabilities and forcing massive societal change. Amidst this global crisis which has done so much to separate us from our colleagues, friends, and family, Zynga’s founding mission – to connect the world through games – has never been more vital. We’ve been humbled to see millions of people turning to our deeply social game experiences for entertainment and a sense of community and continuity.

Today, all Zynga employees are working from home, a transition we executed without any material disruptions to our operations. Our global workforce has rallied, adapting quickly to keep pace with the increasing appetite for innovative bold beats as well as progressing on our new game pipeline. We’ve also been grateful for the opportunity to serve our community during this time and are collaborating with the World Health Organization (WHO) and more than 55 other games companies on the #PlayApartTogether campaign to promote physical distancing through special in-game events, content and giveaways. Zynga’s collaborative culture has never been stronger and while the duration of shelter-in-place rules is uncertain, we are confident in our ability to operate our business remotely for as long as is necessary.

In Q1, we delivered our best first quarter revenue and bookings in Zynga history driven by our live services, which performed well throughout the quarter. We achieved revenue of $404 million, up 52% year-over-year, and bookings of $425 million, up 18% year-over-year. Our topline performance was above guidance driven by broad-based strength across our portfolio, especially by a record quarter from Empires & Puzzles and a great start to the year from Merge Dragons!. Additionally, the new titles we launched in 2019 – Merge Magic! and Game of ThronesTM Slots Casino – are doing well and were meaningful year-over-year contributors.

Given our Q1 beat and strong Q2 outlook, we are raising our full year 2020 guidance to $1.65 billion in revenue, up 25% year-over-year, and $1.8 billion in bookings, up 15% year-over-year. This represents an increase of $50 million in both revenue and bookings versus our prior guidance.

We continue to expect live services, anchored by our forever franchises, to drive the vast majority of our 2020 performance. Our new game pipeline is on schedule and we expect to release new titles worldwide in the second half of the year. In March, Harry Potter: Puzzles & Spells joined Puzzle Combat and FarmVille 3 in soft launch, and all three games are progressing well in test markets. We also continue to see opportunities to acquire talented teams and franchises around the world to further accelerate our growth.

While we are operating in an uncertain times, our business fundamentals are strong and should enable us to navigate the current environment, while remaining well-positioned for the long term.

GUIDANCE:

Zynga sees Q2 2020 revenue of $400 million, versus the consensus of $421.4 million.

Zynga sees FY2020 revenue of $1.65 million, versus the consensus of $1.76 million.

For earnings history and earnings-related data on Zynga (ZNGA) click here.

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• SanDisk upgraded at JPMorgan after investor day; shares climb
• Hydrofarm Holdings Group, Inc. (HYFM) Misses Q2 EPS by 134c