Zynga reports record results, stock mostly unmoved after hours pending acquisition by Take-Two

Zynga said it will not hold a conference call with analysts or provide an outlook given the $12.7 billion offer to buy the company from Take-Two
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Take-Two, which reported its earnings on Monday, said it expects the acquisition to close by the end of June, or by the end of Zynga’s second quarter.

Zynga reported a fourth-quarter loss of $67.2 million, or 6 cents a share, compared with a loss of $53 million, or 5 cents a share, in the year-ago period.

Revenue rose to $695.4 million from $616 million in the year-ago quarter, and bookings rose to $727 million from $699 million a year ago.

Analysts surveyed by FactSet had forecast a loss of 5 cents a share, or adjusted earnings of 9 cents a share, on revenue of $677.6 million and bookings of $721.1 million, based on Zynga forecast revenue of about $675 million and bookings of $715 million.

Zynga reported annual revenue of $2.8 billion and bookings of $2.83 billion. Analysts expected $2.79 billion in revenue and $2.82 billion in bookings, based on Zynga’s forecast of $2.78 billion in revenue and $2.81 billion in bookings for the year.

The company also reported average mobile daily active users rose 3% to 37 million from a year ago.

“Our strong Q4 results capped off our record 2021 performance where we delivered our highest annual revenue and bookings ever, while reaching the largest mobile audience in Zynga history,” Zynga Chief Executive Frank Gibeau said in a statement.

While online gaming revenue rose 7% to $534 million, Zynga’s fastest-growing segment was built-in game ad revenue, which increased 37% to a record $161 million. One of the things that Zynga pitches to its advertisers is so -called “watch to earn” ads, where players earn in-game currency or energy for watching the ad to completion.

While Zynga did not provide a forecast, analysts surveyed by FactSet estimate revenue of $736.1 million and bookings of $749.2 million for the first quarter, and revenue of $3.09 billion and bookings of $3.14 billion for 2022.

Back in November, Zynga had forecast “low double-digit” growth for 2022, driven by its live services and full-year contributions of games like “Farmville 3,” which was recently released, “Golf Rival” from its recent acquisition of Beijing-based StarLark, and from Rollic, the Istanbul-based hyper-casual games publisher in which it acquired an 80% stake.