The 10-second takeaway
For the quarter ended June 30 (Q2), Zynga beat expectations on revenues and exceeded expectations on earnings per share.
Compared to the prior-year quarter, revenue shrank significantly. Non-GAAP earnings per share contracted to a loss. GAAP loss per share dropped.
Gross margins expanded, operating margins shrank, net margins grew.
Zynga reported revenue of $230.7 million. The 18 analysts polled by S&P Capital IQ hoped for net sales of $224.3 million on the same basis. GAAP reported sales were 31% lower than the prior-year quarter's $332.5 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 -$0.04 per share. Non-GAAP EPS were -$0.01 for Q2 compared to $0.01 per share for the prior-year quarter. GAAP EPS were -$0.02 for Q2 against -$0.03 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 73.5%, 200 basis points better than the prior-year quarter. Operating margin was -13.2%, 160 basis points worse than the prior-year quarter. Net margin was -6.8%, 10 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $188.7 million. On the bottom line, the average EPS estimate is -$0.04.
Next year's average estimate for revenue is $867.6 million. The average EPS estimate is -$0.09.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 373 members out of 718 rating the stock outperform, and 345 members rating it underperform. Among 175 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 67 give Zynga a green thumbs-up, and 108 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 $3.35.
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