Zynga slashes forecasts following $63m loss
San Francisco-based games company cuts 2014 bookings and EBITDA forecast after game delays and wider than expected Q2 net loss
Zynga is slashing its 2014 forecasts after posting a US$62.5m net loss for Q2 2014 while also revealing further delays to new product launches.
The San Francisco-based social gaming company’s net loss was an increase on the $16m recorded in Q2 2013, while revenues also fell 34% year-on-year to $153m following a decline in online game and advertising revenue.
Zynga Poker maintained its 24% contribution to total online game revenue of $131m, which was down 36% compared to the same three-month period last year, and total bookings declined 7% year-on-year.
In an analyst call, Zynga CFO David Lee said it was lowering its full-year outlook for bookings to be in the range of $695m and $725m and adjusted EBITDA to be in the range of $40m to $60m due to delays in a number of games and features including Zynga Poker.
However, chief executive Don Mattrick said although the financial results were at the lower end of its expectations, he was confident the company was pursuing the right strategy to turn its fortunes around.
“While our quarterly financial results were in line with our guidance range, we aspire to do better and improve execution across our business,” Mattrick said.
“Inside Zynga, we recognise that our products have the potential to live for multiple years and with nurturing, refinement and investment, they can grow and scale.
“We are purposefully competing, and while we would like to be further along, we believe we are making the right decisions to grow our business and unlock long term shareholder value,” he added.
In an effort to turn around the business Zynga announced it is to enter the sports category after signing multi-year licensing agreements with the NFL and golf pro Tiger Woods.
“Our sports effort introduces a new franchise brand for us “ Zynga Sports 365 “ and with it, new mobile games in football with the NFL and NFL Players and in golf with one of the most iconic athletes in the world, Tiger Woods,” Mattrick said.
Zynga’s share price at the time of writing was $2.92 on the NASDAQ.