(Bloomberg) -- Zynga Inc. rose as much as 4.8% in extended trading after the company, a maker of video games played on mobile devices, beat analysts' first-quarter estimates and raised its revenue forecast for the year.
- Sales in 2021 will be $2.9 billion on an adjusted basis, San Francisco-based Zynga said Wednesday. That's up from a February forecast of $2.8 billion and tops the $2.82 billion average of analysts' estimates. The company maintained its forecast for $650 million in adjusted earnings, which is about $21 million short of Wall Street estimates.
- See more details.
Key Insights
- The projection for full-year profit reflects investments, such as acquisitions tied to advertising, cross-platform play and hyper-casual games, Chief Executive Officer Frank Gibeau said in an interview.
- Zynga said Wednesday it's buying Chartboost, an ad and monetization platform it has been working with for years. The $250 million deal will help Zynga more effectively target consumers at a time when Apple is limiting tracking on its mobile devices. Owning Chartboost will also save on fees. “It pretty much pays for the deal itself in just a few years,” Gibeau said.
- Zynga, which had $1.36 billion in cash and short-term investments at the end of the quarter, will continue to make acquisitions, Gibeau said. Known for mobile games, Zynga is expanding to other types of devices, such as consoles. Star Wars: Hunters, a free-to-play combat game, will debut on the Nintendo Switch later this year.
- The company credited games like social slots titles, Empires & Puzzles and Words With Friends for first-quarter sales and profit that beat projections, and projected second-quarter sales and profit that also topped analysts' estimates.
Market Reaction
- Zynga rose as high as $10.63 in extended trading after the results were announced. The shares have gained 2.7% this year through the close Wednesday in New York.
Get More
- Read the statement.
- See Zynga estimates.
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