Zynga Posts Loss as Number of Active Users Drops

Zynga Inc. on Wednesday posted a 6.8% decline in revenue and swung to a loss in the latest quarter as the videogame company shed users.

Zynga is transitioning from its glory days designing desktop games that were ubiquitous through its partnership with Facebook Inc. to being a player in the mobile-game market. Apple Inc. and Alphabet Inc.'s Google have become the two largest platform partners for Zynga's online game bookings.

Average daily active users fell 5.2% to 18 million in the three-month period ended Sept. 30 compared with the same period a year ago.

Still, average mobile daily active users grew 1% year-over-year, reaching 16 million in the latest quarter. The company reported mobile bookings of $162.3 million during the quarter, representing 83% of overall bookings and up 34% year-over-year.

Overall revenue sank to $182.4 million from $195.7 million a year ago. The recently installed leadership of the company maintained bookings are a better indicator, however, of the company's turnaround effort. Bookings rose 12% to $196.7 million during the quarter, compared with the same period last year.

"The turnaround is gaining momentum," said Frank Gibeau, who was named chief executive in March. Mr. Gibeau spent more than two decades at Electronic Arts Inc. Gerard Griffin, meanwhile, spent a decade at EA before being named chief financial officer at Zynga in September. The company aims to release 10 games this year, Mr. Gibeau said.

For the quarter ended in Sept. 30, Zynga posted a loss of $41.7 million, or 5 cents a share, compared with earnings of $3.1 million, or no earnings on a per-share basis, a year earlier. Revenue edged down 6.8% to $182.4 million.

Analysts surveyed by Thomson Reuters expected a penny of earnings per share on revenue of $187.2 million.

For the period, costs rose 11.6% to $228.7 million, mostly because of the launch of new games. Advertising revenue climbed 8.1% to $48.2 million.

For the current, fourth quarter of the year, the company said it expects revenue between $180 million and $190 million, with a net loss in the range of $25 million to $27 million, or 3 cents a share. Analysts expect revenue of $202.8 million with a penny of earnings per share.

Write to Ezequiel Minaya at [e-mail]

(END) Dow Jones Newswires

November 02, 2016 16:25 ET (20:25 GMT)

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