Zynga Tanks As Bookings Soften, User Acquisition Costs Rise
By Dhirendra Tripathi
Investing.com – Zynga stock (NASDAQ:ZNGA) slumped 19% Friday as the social games developer indicated softness in bookings towards the end of the second quarter and said the cost of acquiring new players has risen in the wake of Apple’s (NASDAQ:AAPL) new privacy rules.
The company felt a softness in bookings the second quarter owing to economies reopening and people stepping out to eat, drink and just enjoy life after a year of being home due to the pandemic. This resulted in declines in player cohorts who installed its games in the early part of 2021.
The company said it is moving the launch of Farmville 3 to the last quarter of the year from the third while raising the revenue guidance for the year one more time.
Zynga now expects 2021 revenue at $2.72 billion and bookings at $2.8 billion. The net loss for the year is seen at $135 million.
The company had its best-ever June-quarter with revenue rising 59% year-on-year to $720 million. Live services drove the revenue growth.
Advertising revenue and bookings both more than doubled, primarily driven by the momentum in the hyper-casual portfolio of Rollic, the Turkish company it bought last year, as well as strength in advertising yields.
Strong performances came from Toon Blast and Toy Blast as the company introduced two new beats – Disco (OTC:DSCSY) Fever and Teams – as well as Harry Potter: Puzzles & Spells. Players engaged and competed in a new club-based Magical Mischief event.
Net income swung to $28 million from a loss of $150 million in the June quarter of 2020.