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Zynga Records Positive Metrics but Growing Loss in Q3

UTC by John K. Kumi · 3 min read
Zynga Records Positive Metrics but Growing Loss in Q3
Photo: Depositphotos

The mobile daily active Zynga users and the mobile monthly active users recorded its best average with 31 million and 81 million respectively in six years. 

Zynga Inc (NASDAQ: ZNGA), an interactive game-making company has recorded mixed feeling metrics that have to do with the company struggling with the net income but recording some positive numbers to be proud of. Zynga reported a Q3 of 2020 net income loss of $122 million that translates to 11 cents per share. This is a huge fall compared to the recorded $230 million or 24 cents per share reported in the Q3 of the previous year.

Compared to the Zack Consensus Estimate of $0.09, Zynga had a quarterly loss of $0.03 per share. Some of the positive things to talk about are the 46% increase in revenue in the Q3 of the year with Zynga having risen from $345 million in 2019 to $503 million in 2020. 

Zynga in Q3

Booking which has been a very essential indicator of the company enjoyed a huge surge of 59% to take the figures to $628 million. The guidance of the full fiscal year was raised with $570 million offered as revenue guidance for the next quarter of the year according to the report

The Zacks Consensus Estimates were missed by 0.02%. The current price per share and the recorded revenue was near accurately predicted by Wall Street as they missed by inches. The analyst estimated an expected loss of 13 cents per share to go with expected revenue of $627 million. The mobile daily active users and the mobile monthly active users recorded its best average with 31 million and 81 million respectively in six years. 

“CSR2” and “Words with Friends” games were very popular among users. Some of these positive metrics are hugely linked to the global pandemic forcing Americans to stay at home and to kill their boredom with games made by Zynga. 

Frank Gibeau, the Chief Executive Officer of Zynga, told reporters that interactive entertainment especially found on mobile is deemed compelling among people. He added that there has been a considerable amount of discovery, especially on mobile. The Zynga shares price is currently making waves with 61% up, and since the start of the year, it has seen a gain of 55.4% compared to the S&P 500 which has gained just 4.3%. 

Its impressive run has seen it dominating the Consensus Revenue Estimates having topped it three times in the last four quarters. Zynga has worked so hard in recent months with the company announcing several partnership deals with a recent one with Snap games, and also, laying down its vision to change the gaming industry with blockchain. These efforts coupled with the impact of the pandemic on users have worked in their favor.

The Outlook of the gaming industry is not much encouraging as investors are mindful as this can translate into the full performance of the Zynga stocks. Gaming is just 19% and found at the bottom on the Zacks Industries Rankings among 250 and the Zacks industries. The industries found at the bottom (last 50%) of the Zacks-ranked industries were completely outperformed by the top 50% by more than 2 to 1 factor according to research

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John K. Kumi
Author John K. Kumi

Excellent John K. Kumi is a cryptocurrency and fintech enthusiast, operations manager of a fintech platform, writer, researcher, and a huge fan of creative writing. With an Economics background, he finds much interest in the invisible factors that causes price change in anything measured with valuation. He has been in the crypto/blockchain space in the last five (5) years. He mostly watches football highlights and movies in his free time.

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