The 10-second takeaway
For the quarter ended March 31 (Q1), Zynga met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped significantly. Non-GAAP earnings per share shrank significantly. GAAP earnings per share expanded to zero.
Margins increased across the board.
Zynga reported revenue of $263.6 million. The 15 analysts polled by S&P Capital IQ predicted a top line of $264.8 million on the same basis. GAAP reported sales were 18% lower than the prior-year quarter's $321.0 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.01. The 22 earnings estimates compiled by S&P Capital IQ predicted -$0.03 per share. Non-GAAP EPS of $0.01 for Q1 were 83% lower than the prior-year quarter's $0.06 per share. GAAP EPS shrank to zero from the prior-year quarter's -$0.12.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 73.7%, 180 basis points better than the prior-year quarter. Operating margin was -1.9%, much better than the prior-year quarter. Net margin was 1.6%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $253.0 million. On the bottom line, the average EPS estimate is -$0.01.
Next year's average estimate for revenue is $1.04 billion. The average EPS estimate is -$0.05.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 353 members out of 683 rating the stock outperform, and 330 members rating it underperform. Among 158 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 57 give Zynga a green thumbs-up, and 101 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Zynga is hold, with an average price target of $3.36.
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