Zynga chief targets higher margins as revenue rises in Q1

Frank Gibeau, chief executive of Zynga, has spoken about his confidence that the social gaming company can match the margins of its peers in the long-term after it was able to achieve year-on-year growth across key financials during the three months to March 31.

Revenue in the opening quarter of the year amounted to $186.7 million (€162.5 million), up from $183.3 million in the same period last year.

Net income improved from a loss of $46.5 million in the first quarter of 2015 to a negative of $26.6 million in the most recent three-month period, while adjusted earnings before interest, tax, depreciation and amortisation increased from $2.1 million to $10.9 million.

Bookings were also up from $167.4 million to $181.6 million, while Zynga noted that GAAP diluted net income per share slightly improved from a loss of $0.05 to a negative of $0.03.

Gibeau, who took over from founder Mark Pincus as chief executive in March, said: “I'm seeing our momentum improve as our teams continue their commitment to growing our established live franchises and demonstrate more cost and operating discipline.

“Our mobile momentum continued with mobile now representing 76% of our total bookings, up from 73% from last quarter, and total mobile audience up 7% from last quarter.

“Since joining, the biggest surprise for me has been how much operating leverage we have across the company, which we 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 collaboration.

“Over the long-term, there’s no reason why Zynga’s margins can’t be more in line with its peers.

“We’re committed to improving our operating leverage and cost management to attain those levels.

“Zynga has all the ingredients it needs for a successful turnaround.”

Related article: Pincus departs as Zynga CEO again, Gibeau named as replacement