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Zynga (ZNGA) Q4 2021 earnings results miss revenue and EPS expectations

Zynga's out with their Q4 2021 earnings release, and the numbers are not great. It probably doesn't matter since Take-Two Interactive has already acquired them, but check out the results here.

Asif Khan

February 9, 2022 3:45 PM

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Zynga is out with their first earnings release since announcing the acquisition by Take-Two Interactive, and the company appears to have missed both Wall Street's revenue and EPS estimates. Zynga reported Q4 2021 revenue of $695 million, missing expectations of $720 million. EPS came in at a loss of 6 cents/share versus expectations of a profit of 9 cents/share. The stock is barely moving in afterhours trading because the TTWO deal is providing a floor to shares.

Here are some highlights of Zynga's Q4 2021 earnings release:

• Revenue & Bookings: We achieved our highest-ever annual revenue of $2,801 million, an increase of 42% year-over-year, and our best-ever annual bookings of $2,826 million, up 24% year-over-year. Online game revenue was a record $2,249 million, up 35% year-over-year, and user pay bookings were a record $2,265 million, up 15% year-over-year. Advertising & other revenue was a record $551 million, up 79% year-over-year, and advertising & other bookings were a record $561 million, up 83% year-over-year.
• Audience Metrics: Record annual average mobile DAUs were 39 million, up 41% year-over-year, and all-time best annual average mobile MAUs were 184 million, up 107% year-over-year. Annual mobile ABPU of $0.194 decreased by 12% year-over-year.
• Costs & Expenses: Cost of revenue was $1,015 million or 36% of revenue, compared to 41% of revenue in the prior year. Non-GAAP cost of revenue was $787 million or 28% of bookings, down from 30% of bookings in the prior year. GAAP operating expenses were $1,730 million, representing 62% of revenue and a significant improvement from 78% in the prior year. Non-GAAP operating expenses of $1,386 million represented 49% of bookings versus 46% in the prior year.
• Profitability & Cash Flow: Net loss was $104 million, an improvement of $325 million year-over-year, and adjusted EBITDA was $641 million, up $374 million year-over-year. We generated operating cash flow of $254 million, down $176 million year-over-year, and ended the year with approximately $1.2 billion in cash and investments.

Due to the pending transaction with Take-Two Interactive Software announced on January 10, 2022, Zynga is not hosting a conference call or providing forward guidance in connection with the release of its quarterly results.

Just last month, Take-Two Interactive announced a deal to acquire Zynga for nearly $13 billion. This set off a flurry of acquisitions in the video game space with Microsoft scooping up Activision Blizzard for nearly $69 billion, and Sony acquiring Destiny 2 developer Bungie for $3.6 billion. 

Zynga will not be hosting conference calls or providing guidance going forward, so tune in to the next few Take-Two Interactive conference calls to hear more about Zynga in the future.

This article is only meant for educational purposes, and should not be taken as investment advice. Please consider your own investment time horizon, risk tolerance, and consult with a financial advisor before acting on this information.

Asif Khan

CEO/EIC/EIEIO

Asif Khan is the CEO, EIC, and majority shareholder of Shacknews. He began his career in video game journalism as a freelancer in 2001 for Tendobox.com. Asif is a CPA and was formerly an investment adviser representative. After much success in his own personal investments, he retired from his day job in financial services and is currently focused on new private investments. His favorite PC game of all time is Duke Nukem 3D, and he is an unapologetic fan of most things Nintendo. Asif first frequented the Shack when it was sCary's Shugashack to find all things Quake. When he is not immersed in investments or gaming he is a purveyor of fine electronic music. Asif also has an irrational love of Cleveland sports.