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Video Game Maker Zynga Beats Quarterly Views, Buys Chartboost

Zynga (ZNGA), a publisher of mobile and social video games, late Wednesday beat Wall Street’s targets in the first quarter and raised its guidance for the full year. It also announced a major acquisition. Zynga stock rose in extended trading.




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San Francisco-based Zynga lost 2 cents a share on bookings of $720 million in the March quarter. It reported adjusted earnings of $162 million in the period. Analysts had forecast adjusted earnings of $150 million on bookings of $686 million. In the year-earlier period, Zynga lost 11 cents a share on bookings of $425 million.

Top-performing games in the March quarter included “Hit It Rich! Slots,” “Empires & Puzzles” and “Words With Friends.”

“We had record quarterly revenue and bookings,” Chief Executive Frank Gibeau told Investor’s Business Daily. “We’ve got momentum across our whole business.”

Gibeau said he expects usage of mobile games to continue even as the world emerges from the Covid-19 pandemic.

Zynga Stock Rises After Hours

For the current quarter, Zynga expects to generate bookings of $710 million, topping expectations of $694.8 million.

The company also raised its target for 2021 bookings by $100 million to $2.9 billion. Wall Street had predicted $2.84 billion.

In after-hours trading on the stock market today, Zynga stock climbed 5%, near 10.65. During the regular session Wednesday, Zynga stock dipped 0.5% to 10.14.

Zynga Acquiring Chartboost Platform

In other news, Zynga announced a deal to acquire Chartboost, a mobile advertising and monetization platform, for $250 million in cash. The companies expect the transaction to close in the third quarter.

Combining Zynga’s game portfolio and first-party data with Chartboost’s advertising and monetization platform will enhance Zynga’s competitive positioning in the mobile ecosystem, Gibeau said.

“As the mobile ecosystem evolves, game companies that have a platform are going to do better than ones that don’t,” he said. “The platform is going to give you the ability to understand what’s happening in the marketplace more accurately. And it’s going to give you the tools to be able to acquire users and monetize your inventory in advertising at much higher rates than someone who doesn’t have a platform.”

Zynga stock ranks No. 13 out of 16 stocks in IBD’s Computer Software-Gaming industry group. It has a poor IBD Composite Rating of 26 out of 99, according to IBD Stock Checkup. IBD’s Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock’s strengths. The best growth stocks have a Composite Rating of 90 or better.

Zynga stock has been consolidating for the past 11 weeks at a buy point of 12.42, according to IBD MarketSmith charts.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.

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