Categories AlphaGraphs, Analysis, Technology

Zynga reports Q1 earnings tomorrow. What you need to know

Following four months of steady rally, Zynga Inc (NASDAQ: ZNGA) is scheduled to report first-quarter 2019 results after the closing bell on Wednesday, May 1. Analysts have projected a 57% growth in Q1 revenue to $327.07 million, benefiting from the strength of its live mobile services as well as higher bookings.

The management had earlier projected a 48% jump in first-quarter bookings to $325 million.

Separately, benefits from the acquisition of Small Giant Games, which creates Empires & Puzzles franchise, is likely to show up in the first-quarter results. Zynga had acquired an 80% stake in the  Finland-based mobile gaming company in December 2018 for $364 million in cash and $231 million in equity.

Meanwhile, the Farmville-maker is projected to report a profit of 5 cents per share, compared to one cent per share last year. The street expects royalty hikes and marketing expenses to partly offset the benefits from higher revenues coming down the line.

READ: ZYNGA REPORTS Q1 2019 EARNINGS RESULTS

Two other important metrics to gauge the strength of gaming companies are daily active users (DAU) and monthly active users (MAU). During the last reported quarter, the San Franciso-based firm had reported flat year-over-year growth in DAU and 1% decline in MAU. Wall Street anticipates much better performance this time around, with DAU growth projected at 15% and MAU growth at 9%.

Far perspective

For the full year of 2019, Zynga expects to deliver $1.15 billion in revenue, up 27% year-over-year, with bookings of $1.35 billion, up 39% year-over-year.

READ: MOMO SHARES CRASH AFTER ITS TINDER-LIKE APP GETS REMOVED FROM APP STORES

The company expects its topline performance to be similar in Q1 and Q2, driven primarily by live services. In the second half of the year, the company expects to layer in additional growth from the new game launches as well as a seasonal lift in advertising.

Zynga expects low double-digit revenue and bookings growth in 2020, with greater operating leverage as live services growth in 2020 will be further enhanced by a full year contribution from 2019 new game launches.

 

Listen to on-demand earnings calls and hear how management responds to analysts’ questions

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