Thursday, August 6, 2015

ZyngaI Inc. Q2 Earnings: Improvements Can Be Seen In The Numbers

Zynga has improved financially as compared to last quarter and will soon enter the profitability region if such progress continues


Zynga Inc. released its Q2FY15 earnings yesterday and was able to perform better than what analysts expected from it. During the quarter, Zynga was successfully able to increase its revenues and was also able to lower down its losses as compared to the previous quarter. There were significant improvements in its Daily and Monthly active users that were reflected in higher revenues.



To start our analysis, revenue for the quarter rose sharply to $199.91 million, up 30.5% Year on Year, while analysts were expecting revenue equal to $188 million. There were 21 million Daily Active Users during the quarter, up 23% YoY. The average daily bookings per average also rose to $0.091, up 29% YoY. The mobile bookings for the quarter stood at $115 million, up 30% YoY, whereas the total bookings for the quarter stood at $175 million. Although it did not enter into the profitability region in this quarter, it was able to control its losses substantially as the net loss for the quarter stood at $23 million, which showed significant improvements as compared to the last quarter when the loss was $47 million. This was translated into loss per share of $0.03.

Moving on with the analysis, Zynga had a positive cash flow from operations of $4.2 million, while the overall cash balance rose to $475 million during the quarter. Zynga’s balance sheet size slightly contracted, while the major changes were witnessed in its investments and current liabilities that declined YoY.
New games such as Farmville, Empires and Allies, and Harvest Swap were launched during the quarter. Zynga CEO Mark Pincus is optimistic that he has a talented team and the company is making significant progress in its business.
Moving on, Zynga expects revenue of around $175-190 million in Q3FY15 while the net loss is expected to stay the same.
The Tech Zone
The Tech Zone

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