Outlook: Zynga Bookings Exceed Guidance

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App Store 2008

After the close on Thursday, Zynga (NASDAQ:ZNG) preannounced Q4:13 (ending December) results in conjunction with its announcement of an agreement to acquire NaturalMotion. Bookings were $147 million versus our estimate of $140 million, consensus of $141 million, and guidance of $130 – $140 million. EPS was $(0.03) versus our estimate of $(0.04), consensus of $(0.04), and guidance of $(0.05) – $(0.04).

Bookings exceeded guidance due in part to positive trends for key titles. Words with Friends had its highest bookings quarter in its five year history, with 33 percent sequential growth. Zynga’s Casino franchise achieved positive sequential bookings growth for the first time in the past eighteen months. Its new mobile slots game, Hit It Rich! is the top tablet game on the free iPad charts in the Casino category. In the next two weeks, Zynga plans to release another slots game.

Zynga provided much stronger-than-expected FY:14 guidance, a positive reflection on steps management has taken to refresh the product portfolio and rationalize spending. FY:14 guidance is for bookings of $760 – $810 million and non-GAAP EPS of $0.01 – $0.03 versus consensus of $629 million and $(0.04).

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