Zynga Digs a Bigger Hole With Soft Earnings

Zynga generated bookings of $182.4 million in the fourth quarter. The company delivered a 120% increase in fourth-quarter mobile bookings year-over-year and a 14% increase quarter-over-quarter. In terms of platform mix, mobile bookings were 60% of total bookings in the fourth quarter of 2014, up from 34% in the fourth quarter of 2013

Daily active users (DAUs) in the fourth quarter of 2014 were 25 million, compared to 27 million in the fourth quarter of 2013. Web DAUs and mobile DAUs were 6 million and 19 million, respectively, for this quarter.

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In the fourth quarter, monthly active users (MAUs) were 108 million, compared to 112 million in the same period in the previous year. Web MAUs and mobile MAUs were 28 million and 80 million, respectively, in the fourth quarter of 2014.

Don Mattrick, CEO of Zynga, said:

2014 was a year of progress for Zynga — we came together as one team and applied more discipline and rigor to our business. In the fourth quarter, we increased mobile bookings to 60% of our total bookings mix, expanded our mobile audience with monthly mobile consumers up 87% year over year, and grew our core franchise bookings by 35% year over year

He commented on the outlook for 2015:

In 2015, we will focus on three priorities: driving mobile growth, launching more products in more evergreen categories and building on our social legacy. We will deliver a 100 percent mobile-first new product slate featuring new games, with a goal of ending 2015 with more than 75% of our fourth quarter bookings coming from mobile. I am excited by the boldness of our 2015 product aspirations — this year we expect to launch between 6 to 10 new games in important categories like Match 3 and Action Strategy. We are building a high performing culture which takes time and while we would like to go faster, we are being methodical and purposeful about our decisions. We have a healthy balance sheet with $1.1 billion in cash and marketable securities which gives us staying power and the ability to invest in our future growth.

Zynga shares closed Thursday down 5.7% at $2.65. In after-hours trading, shares were down another 10% at $2.39. The stock has a consensus analyst price target of $3.31 and a 52-week trading range of $2.20 to $5.89.

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