Chief Executive of Zynga, Inc. (NASDAQ:ZNGA) [Detail Analytic Report], Frank Gibeau stated during first quarter earning call that it’s been a productive two months leading the firm as Chief Executive. He is seeing their momentum improve as their teams continue their commitment to growing their established live franchises and demonstrate more cost and operating discipline. As a result, first quarter bookings were above the high end of their guidance range at $182 million, and Adjusted EBITDA was above their range at $11 million. Their mobile momentum continued with mobile now representing 76% of their total bookings, increased from 73% from previous quarter, and total mobile audience increased 7% from previous quarter.
Zynga declared its first quarter loss of $26.6 million. On a per-share basis, Zynga reported that it had a loss of 3 cents. Earnings, revised for one-time gains and costs, were less than 1 cent a share. Gibeau added since joining, the biggest surprise for him has been how much operating leverage they have across the firm, which they can unlock with improved planning, more focused execution and cost control. That means putting in place more disciplined, consistent development practices and more cross team cooperation.
Gibeau added they’re committed to improving their operating leverage and cost management to attain those levels. Longer term, they’re building an outstanding studio and innovative creative culture. In his experience, the best games in the world are made by small, complete teams with great chemistry who build games in a predictable and profitable way. Zynga announced its first quarter revenue of $181.6 million, which also beat Street forecasts. For the current period completing in July, Zynga reported that it expects revenue to be $160 to $170 million.
Pacific Crest Securities, raised its price target on Activision Blizzard, Inc. (NASDAQ:ATVI) [Detail Analytic Report] stock from $36 to $40 while maintained an overweight rating on the stock. Pacific Crest raise its target on the stock following the firm’s latest financial results. Activision announced earnings of 23 cents per diluted share for its Q1 of 2016, increased from earnings of 16 cents per diluted share for the first quarter of 2015. Activision Blizzard declared record revenue of $1.46 billion versus its first quarter 2015 revenue of $1.28 billion. After reporting solid Q1 results, Activision Blizzard saw record engagement and players across most of its franchises and is positioned well for Q2 with the highly expected Overwatch release May 24, Pacific Crest analysts stated in an investor note.
On the other hand, Activision Blizzard is sweet on mobile advertising. Activision Blizzard could soon start displaying mobile ads in King’s games as it looks to target the 463 million players who access games such as Candy Crush and Farm Heroes on their smartphones. Activision completed its nearly $6 billion buyout of King in February, becoming the biggest game network in the world, but sparked concerns that it was overpaying for a firm with just one blockbuster game series “Candy Crush.
Riccardo Zacconi, Chief Executive of King stated on Activision’s earnings call that given their massive network, they do believe that advertising could be a meaningful revenue stream for King in the long-term. Zacconi added King’s gamers were one of the largest untapped audiences for advertisers in the world and the firm had started experimenting with advertising in two games.