May 1, 2019 / 8:12 PM / 4 months ago

'CSR Racing 2', "Empires & Puzzles" fuel Zynga's bookings, shares rise

(Reuters) - Zynga Inc on Wednesday forecast bookings above Wall Street expectations after beating first-quarter estimates, powered by demand for its games such as “CSR Racing 2”, as well as acquired franchises like “Empires & Puzzles”.

FILE PHOTO: The Zynga logo is pictured at the company's headquarters in San Francisco, California April 23, 2014. REUTERS/Robert Galbraith/File Photo

Shares of the company rose about 11 percent to $6.11 in after-market trading, adding to the 40 percent gain this year.

Zynga, once known for its Facebook-based desktop games such as “Farmville”, has been focusing on mobile-centric games and on acquisitions of smaller studios such as Gram Games, Small Giant Games and the card and board games studio of Peak Games to power growth.

Mobile revenue, which accounted for 93 percent of total revenue, surged 35 percent to $246 million in the first quarter ended March 31.

Zynga also raised its 2019 forecast for revenue and bookings, bolstered by a strong slate for the second half of the year with games such as “Harry Potter” and “Game of Thrones”.

The company said the raised guidance put it on track to deliver the strongest annual revenue since 2012 and highest bookings in its history.

“There’s a real renaissance and strong growth in mobile right now... our games are hitting the mark from a quality standpoint and from an audience standpoint,” Chief Executive Officer Frank Gibeau told Reuters.

Earlier this month, Snap Inc launched a gaming platform within its Snapchat app featuring original and third-party games such as Zynga’s Tiny Royale.

Zynga posted first-quarter bookings of $359 million, beating estimates of $326.6 million, according to IBES data from Refinitiv.

The San Francisco-based company said it expects second-quarter bookings of $360 million, above analysts’ estimates of $327.8 million.

Bookings are an important measure of future revenue for companies like Zynga which sell virtual goods such as currency and lives inside the smartphone gaming apps.

First-quarter advertising revenue jumped 45 percent to $65 million, aided by network optimization, as well as the year-over-year additions of Small Giant Games and Gram Games.

However, the company missed on average number of daily active users, which came in at 22 million versus estimates of 26.4 million.

Zynga reported a net loss of $128.8 million, or 14 cents per share, in the quarter, compared with a profit of $5.61 million, or 1 cent per share, a year earlier.

Reporting by Arjun Panchadar in Bengaluru; Editing by Sriraj Kalluvila

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