The shares of Zynga Inc. initially rose 10% in out-of-hours trading after a earnings report again proving that home-bound Americans bing on digital games.
The mobile gaming company reported a net loss of $ 150 million in the second quarter, or 16 cents per share, compared to a loss of $ 55.8 million, or 6 cents per share, in the year-ago quarter.
sales improved 47% to $ 452 million from $ 306.5 million a year ago. Sales included record online games revenue of $ 388 million, up 61% year-on-year. In a nod to the strong outlook, the company also increased full-year revenue expectations by $ 110 million to $ 1.8 billion.
Analysts surveyed by FactSet expected an adjusted loss of 13 cents per share on revenue of $ 505 million.
With no foreseeable end in sight for on-the-spot programs, Americans are increasingly turning to gaming as a new form of social media – one in which they can chat and collaborate to solve a puzzle or adventure game. And that translates to record levels of engagement, retention, and making money, say Zynga executives.
“If you asked me New Year’s Eve ”I didn’t think it would happen,” Zynga director Frank Gibeau told MarketWatch on Wednesday in a telephone interview. “But the pandemic has changed that. Gaming is very resilient during economic difficulties. It’s a great way to connect. ‘
Popular titles “Empires Puzzles”, “Merge Dragons”, “Merge Magic” and “Game of Thrones Slots Casino” were the biggest growth drivers, according to Zynga. The San Francisco-based company also said it is buying developer Rollic, and on July 1 it closed the acquisition of Peak, a maker of mobile puzzle games.
Zynga’s strong quarter reflected that of rival Activision Blizzard Inc. ATVI,
and traditional game company Take-Two Interactive Software Inc. TTWO,
earlier this week. Activision reported a second-quarter net result of $ 580 million, or 75 cents per share, compared to $ 328 million, or 43 cents per share, in the same period last year, while Take-Two said sales grew 54% to a record of 831.3 million.
See also: Activision Blizzard results, outlook at the top of Wall Street estimates
Zynga shares have risen 62% this year. The wider S&P 500 index SPX,
will improve by 3% in 2020.