Zynga Inc Dives After Weak Earnings, Guidance

Shares of Zynga plunged by as much as 11.28% to $2.36 per share after tonight’s earnings release

Zynga released its latest earnings report after closing bell tonight, posting non-GAAP earnings of 0 cents per share, which was in line with the consensus estimate. The game maker reported revenue of $192.55 million. Analysts had been expecting $201.11 million in revenue for the fourth quarter.

In the same quarter a year ago, Zynga posted non-GAAP losses of 3 cents per share on $176.36 million in revenue.

Warren Buffett’s 2018 Activist Investment

Berkshire Hathaway Warren BuffettMost investors are aware of Warren Buffett's most high profile long-term investments. However, there is one long term investment that is often overlooked. Q2 2020 hedge fund letters, conferences and more This is building materials maker USG, which was owned by Berkshire Hathaway for more than 17 years before it was acquired in 2018. If Read More

Key metrics from Zynga’s earnings report

GAAP losses per share were 5 cents, compared to last year’s GAAP losses of 3 cents per share. Zynga reported $182.4 million in bookings and adjusted EBITDA of $9.4 million.

The game maker did see a 120% increase in mobile bookings year over year for the fourth quarter and a 14% sequential increase as well. Mobile bookings were 60% of Zynga’s total bookings, an increase from last year’s 34% in the fourth quarter. The company’s mobile monthly audience grew 87% year over year, and its daily mobile users increased 41%.

Zynga also recorded record advertising results during the quarter, marking a 41% quarter over quarter ad bookings increase, excluding licensing developer payments.

The game maker also provided some business updates, like its entry into the mobile Action Strategy category with games using technology from NaturalMotion, a recent acquisition. Zynga also plans to expand the FarmVille franchise into the Match 3 category with a new game called FarmVille: Harvest Swap.

The game maker also announced that it is closing its China studio, which affects 71 employees and provides annualized cost savings of $7 million.

Zynga provides weak guidance

The game maker also provided an outlook for this year. For the current quarter, management expects revenue of between $155 million and $165 million and net losses of between $60 million and $52 million. They’re projecting net losses per share of between 7 cents and 6 cents and non-GAAP net losses of between 3 cents and 2 cents per share. That’s compared to the consensus estimate of breakeven for non-GAAP net income.

They’re projecting between $140 million and $150 million in bookings for the first quarter.