Zynga beats bookings estimate as 'Words With Friends 2', 'CSR Racing 2' deliver

(Reuters) - Zynga Inc, creator of the once popular online game “FarmVille”, reported fourth-quarter bookings above analysts’ estimate, driven by the success of its mobile games such as “Words With Friends 2” and “CSR Racing 2”.

The company reported bookings of $223.8 million for the three months ended Dec. 31, well above the $213.9 million estimated by analysts polled by data and analytics firm FactSet.

Bookings, an important metric indicating future revenue, include sales of virtual goods such as currency and lives.

“Words With Friends 2,” launched in November, builds on the franchise’s eight-year history and includes user-inspired features and latest pop culture phrases. The game recorded its biggest quarterly revenue in history, the company said.

Quarterly revenue from its drag racing game, “CSR 2”, nearly doubled from a year earlier.

Zynga, which has entered the third year of its turnaround, has been building up its mobile business as users move away from desktop-based games, a segment it once dominated through its “FarmVille”.

Zynga’s mobile revenue rose 32 percent to $203.6 million. The segment accounted for 86 percent of total revenue in 2017, up from 77 percent in 2016.

The company said it would emphasize on increasing player engagement through live services in its current roster of games, instead of spending on developing and marketing new ones.

“We’re making progress on lots of fronts,” Chief Executive Frank Gibeau told Reuters.

Gibeau, who once managed Electronic Art’s mobile games division, has been steering the company to a mobile-focused games maker since assuming charge in March 2016. Zynga’s shares are up about 57 percent since he took the helm.

Zynga, however, forecast current-quarter bookings of $210 million, below analysts’ estimate of $216.1 million, according to FactSet.

“We are coming off a really hot holiday and usually the Q1’s at our company and mobile game companies in general are seasonally down,” Gibeau said.

Zynga’s average daily active users at the end of fourth quarter were 22 million, a 22 percent jump from a year earlier. Analysts had expected 21.3 million, according to FactSet.

Zynga reported net income of $12.9 million, or 1 cent per share, compared with a loss of $35.4 million, or 4 cents per share, a year earlier.

Shares of the company were down marginally at $3.67 in extended trading on Wednesday.