Zynga Wins Big On Triple Announcement: Earnings, An Acquisition, A Headcount Cut

Jan 30 2014, 6:18pm CST | by

Zynga came out with 2013 full year and fourth quarter results a full week ahead of schedule, but the move seems to be paying off. Shares were up close to 20% to $4.25 in after-hours trading following the surprise announcement which included 2013 earnings, as well as news of an acquisition and plans to cut jobs.

On a non-GAAP basis the digital gaming company reported $716.2 million in annual bookings — a predictor of sales — down from $1.1 billion in the year prior, but ahead of Wall Street’s $712 million consensus estimate. Adjusted EBITDA came in at $46.5 million and non GAAP net loss was $34.1 million, or minus 4-cents per share.

On a GAAP basis full year revenue came in at $873.3 million, down 32% from the year prior. But the company managed to slash it’s net loss to $37 million from $209.4 million in 2012. Loss per share was 5 cents, versus 28 cents in 2012.

“Over the last 7 months, our teams have been working with a sense of urgency,” said CEO Don Mattrick in a statement. “We finished 2013 in a strong position and expect 2014 to be a growth year.” He declared high hopes for a foundation setting first quarter and noted that investments in popular game Words With Friends and in Zynga’s Casino have begun to pay off.

He added, “Our market is growing as measured by device, audience and dollars and we have the privilege to compete in one of the fastest growing parts of the entertainment industry. We have an ambitious agenda and we are moving quickly to add capabilities that are complementary and strategic to our core growth plans.”

The company also announced that it has acquired NaturalMotion, a privately held mobile gaming company responsible for hits like CSR Racing and Clumsy Ninja. Zynga paid around $527 million for NaturalMotion, including $391 million in cash and 39.8 million Zynga shares at its $3.42 close price on January 29.

In addition to creative and technological gains in mobile, Zynga expects the deal to add between $70 million and $80 million to non-GAAP earnings this year. “NaturalMotion set out to make games that wow millions of people, by being obsessed with quality, disrupting and creating genres, and using almost magical technology,” said Natural Motion CEO Torsten Reil. “We’ve reached our first milestones — creating #1 top-grossing and top-free titles — on our own. We can’t wait to see what we can achieve together with Zynga.”

Finally, Zynga announced what it is calling a “cost reduction plan.” The plan includes cutting 314 employees, approximately 15% of its workforce. The company expects the cuts to result in $33 million to $35 million in pre-tax savings, excluding a first quarter restructuring charge between $15 million and $17 million.

Looking ahead Zynga forecasts first quarter revenue between $155 million and $165 million including the impact of NaturalMotion. Net loss is projected to fall between $56 million and $49 million, including restructuring charges. The company expects bookings in the range of $138 million to $148 million.

For the full year, the outlook on bookings it between $760 million and $810 million, for non-GAAP earnings per share to return to positive territory between 1-cent and 3-cents.


Follow @samsharf/>

Source: Forbes Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

China pledges $81 mn financial assistance for Afghanistan
Beijing, Oct 31 (IANS) China Friday pledged to provide non-reimbursable assistance of 500 million yuan (about 81 million dollars) to Afghanistan this year at an international meeting on Afghanistan held here.
 
 
EU seeks talks with Russia over goods duties: WTO
Geneva, Oct 31 (IANS) The European Union (EU) has sought a consultation with Russia over the tariffs the latter imposed on certain agricultural and manufactured goods, the World Trade Organisation (WTO) said Friday.
 
 
Virgin Galactic's spaceship crashes during test flight
Los Angeles, Nov 1 (IANS) A passenger rocket plane developed by Virgin Galactic's crashed Friday after suffering an "in-flight anomaly" during a powered test flight over the US state of California, the company said.
 
 
Bhopal fugitive Warren Anderson is dead (Roundup, Changing dateline)
Washington, Oct 31 (IANS) Warren Anderson, the former CEO of Union Carbide Corp, has died at 92 after living for 30 years under the shadow of the 1984 Bhopal gas tragedy that killed thousands.
 
 
 

Latest from the Network

Three Iraqis arrested on terror charges in Switzerland
Geneva, Nov 1 (IANS) Swiss authorities Friday said they arrested three Iraqi nationals suspected of planning a terrorist attack in Europe. The office of the attorney general of Switzerland said in a statement that the...
Read more on Politics Balla
 
Pakistan repatriates 29 Afghans
Islamabad, Oct 31 (IANS) Pakistan handed over 29 Afghans arrested during a military operation in its northwestern tribal region to Afghan authorities, the army said Friday. The Pakistani security forces had launched a...
Read more on Politics Balla
 
Less than half of Americans support stricter gun laws: Poll
Washington, Oct 31 (IANS) Less than half of Americans said they back tougher gun laws, which is significantly lower than the 58 percent recorded just after the 2012 school shooting in Newtown, Connecticut, that left 20...
Read more on Politics Balla
 
Zimbabwe's main opposition calls for fresh polls again
Harare, Oct 31 (IANS) Zimbabwe's opposition MDC-T party said Friday economic challenges confronting the country could only be resolved if the country holds free and fair polls. MDC-T president Morgan Tsvangirai told...
Read more on Politics Balla
 
Trapped miners confirmed dead: Colombia
Bogota, Oct 31 (IANS/EFE) Twelve workers trapped by a flood inside a coal mine in the northwestern province of Antioquia are dead, Colombian authorities said Friday. "With an inspection we made in the night hours, we...
Read more on Politics Balla
 
10,000 agents searching for missing Mexican students
Mexico City, Oct 31 (IANS/Prensa Latina) The search for the 43 students who disappeared in Iguala, in the Mexican state of Guerrero, continued Friday with participation of 10,000 agents, including federal forces,...
Read more on Politics Balla
 
Unicef wants unimpeded delivery of aid to kids in CAR
Geneva, Oct 31 (IANS) The UN Children's Fund (Unicef) Friday asked for unhampered delivery of humanitarian assistance to children in need of support amid the recent episodes of unrest in Central African Republic (CAR...
Read more on Politics Balla
 
UN calls for inclusive urban development
United Nations, Oct 31 (IANS) UN General Assembly President Sam Kutesa Friday called for an inclusive and sustainable approach for urban development that considers the needs of marginalised groups. Commemorating the...
Read more on Politics Balla
 
Ponzi schemer in US cheats residents of $22 mn, jailed
Washington, Oct 31 (IANS) If you have been one of those approached by some 'known' person for investing in something with an assurance of 'easy money', you may benefit reading about this Ponzi schemer, jailed in the US...
Read more on Politics Balla
 
China pledges $81 mn financial assistance for Afghanistan
Beijing, Oct 31 (IANS) China Friday pledged to provide non-reimbursable assistance of 500 million yuan (about 81 million dollars) to Afghanistan this year at an international meeting on Afghanistan held here. China...
Read more on Politics Balla