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Zynga Announces Q1 2016 Financial Results

Zynga (ZNGA) announced its Q1 2016 financial results, and released its Q1 Quarterly Earnings Letter. The Q1 Quarterly Earnings Letter and press release are included below and are also available at http://investor.zynga.com.

Today, we announced we: (1) outperformed the high end of our Q1 guidance with bookings of $182M and Adjusted EBITDA at $11M, (2) continued to drive mobile momentum with mobile bookings now representing 76% of our overall bookings and our mobile audience up 7% sequentially, (3) our commitment to growing our core live franchises – Slots, Words With Friends and Zynga Poker – is paying off with mobile bookings up 54% from last year and (4) we remain on track to launch 10 games this year, including our newly announced Match-3 game, Ice Age: Arctic Blast.

Below are two press release quotes from CEO Frank Gibeau addressing today’s news:

·        “It’s been a productive two months leading Zynga as CEO. I’m seeing our momentum improve as our teams continue their commitment to growing our established live franchises and demonstrate more cost and operating discipline. As a result, Q1 bookings were above the high end of our guidance range at $182 million, and Adjusted EBITDA was above our range at $11 million. Our mobile momentum continued with mobile now representing 76% of our total bookings, up from 73% from last quarter, and total mobile audience up 7% from last quarter,” said Frank Gibeau, CEO of Zynga. “Zynga has all the ingredients it needs for a successful turnaround. My priority is to bring our founding social gaming vision to life in our games and lead our teams to deliver high quality experiences for players on time and profitably.”

·        “Since joining, the biggest surprise for me has been how much operating leverage we have across the company, which we can unlock with improved planning, more focused execution and cost control. That means putting in place more disciplined, consistent development practices and more cross team collaboration. Over the long term, there’s no reason why Zynga’s margins can’t be more in line with its peers. We’re committed to improving our operating leverage and cost management to attain those levels. Longer term, we’re building a world class studio and innovative creative culture. In my experience, the best games in the world are made by small, complete teams with great chemistry who build games in a predictable and profitable way,” said Gibeau.

For further detail on the quarter, Frank and interim CFO Michelle Quejado will host a live Q&A conference call at 2 p.m. PT today to discuss our earnings results and Q2 guidance. The call can be accessed at investor.zynga.com.

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