Zynga Inc.’s quarterly results topped Wall Street estimates Monday, and the videogame publisher expects growing ad revenue, along with a new version of “Farmville,” to drive growth in 2022.
“Advertising has really picked up a lot of steam,” Zynga Chief Executive Frank Gibeau told MarketWatch in an interview.
While online gaming revenue rose 31% to $571.1 million, Zynga’s fastest-growing segment was built-in game ad revenue, which nearly doubled to a record $133.6 million. One of the things that Zynga pitches to its advertisers is so -called “watch to earn” ads, where players earn in-game currency or energy for watching the ad to completion.
“What’s great about it is that you actually get value for it,” Gibeau said.
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Analysts surveyed by FactSet had forecast a loss of 9 cents a share on revenue of $663.6 million and bookings of $667.2 million, based on Zynga’s forecast of about $665 million in revenue and about $660 million in bookings. Zynga reported average mobile daily active users rose 21% to 38 million from a year ago.
Shares closed the regular session up 1.3% at $6.99, rising from their lowest closing level since April 2020, established on Friday. Zynga shares closed at their highest level in nine years on Feb. 19 at $12.18, but have been hit hard since a disappointing forecast in the last earnings report.
On Monday, Zynga forecast revenue of about $675 million and bookings of $715 million for the fourth quarter, and a record $2.78 billion in revenue and $2.81 billion in bookings for the year. Analysts surveyed by FactSet had estimated revenue of $663.6 million and bookings of $716.5 for the fourth quarter, and revenue of $2.75 billion and bookings of $2.81 billion for the year.
For 2022, Zynga forecast “low double-digit” growth, driven by its live services and full-year contributions of games like “Farmville 3,” which was recently released, “Golf Rival” from its recent acquisition of Beijing-based StarLark, and from Rollic, the Istanbul-based hyper-casual games publisher in which it acquired an 80% stake. Analysts expect 12% revenue growth in 2022.