Zynga Inc. (NASDAQ: ZNGA) reported second-quarter 2016 results after markets closed on Thursday. For the quarter, the social game maker posted an adjusted break-even and revenues of $181.7 million. In the same period a year ago, the company reported a net loss of $0.01 per share on revenues of $199.9 million. Second-quarter results compare to consensus estimates for a loss of $0.02 and $169.8 million in revenues.Bookings totaled $174.65 million in the quarter compared with $174.46 million in the year-ago quarter. Sequentially bookings were down 4% from $181.72 million.
Average daily user sessions dropped from 21 million in the second quarter of 2015 to 18 million and average mobile daily users dropped from 17 million to 15 million. Average daily bookings per average daily user rose from $0.091 to $0.107, a 17% improvement.
Online game revenue was down 16% year-over-year and 1% sequentially. Advertising revenue was up 22% from last year, but down 8% sequentially.
For the third quarter, Zynga forecast revenue in the range of $170 to $180 million. Adjusted EPS is projected at $0.01. Bookings are projected at $180 to $190 million. Analysts concur with Zynga’s EPS projection, but had a $188 million target for third-quarter revenues.
CEO Frank Gibeau said:
We are continuing to make great progress in our turnaround. Our Q2 bookings and Adjusted EBITDA were both above the high end of our guidance range, with bookings at $175 million and Adjusted EBITDA at $12 million. … We are tightening our operating model and improving our cost management as we do more with less, particularly in marketing. While we have more work to do in our turnaround, I am encouraged to see the momentum we feel in our products and company show up in our results.
The revenue guidance will hurt Zynga’s shares. Investors do not have a lot of patience left for social media turnaround stories
After closing up about 0.3% at $2.97 against a 52-week trading range of $1.78 to $3.02, a new high set earlier Thursday, shares have dropped about 8% in after-hours trading to $2.73. Thomson Reuters had a consensus analyst price target of $2.97 before the report.
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