Zynga (ZNGA) Posts Q3 Earnings Miss, Active Users Down 5.2%

Zynga Inc. (NASDAQ:ZNGA) just released its third quarter fiscal 2016 financial results, posting earnings of a loss of 3 cents per share and GAAP revenues of $182.4 million. ZNGA is a Zacks Rank #3 (Hold), and is down 2.55% to $2.67 per share in after-hours trading after its earnings report was released.

Missed earnings estimates. The company reported earnings of a loss of 3 cents per share, lagging behind the Zacks Consensus Estimate of a loss of 2 cents per share. This number excludes 2 cents from non-recurring items.

Missed revenue estimates. The company saw GAAP revenue figures of $182.4 million, missing the Zacks Consensus Estimate of $188 million, down 6.8% year-over-year.

Bookings rose 12% to $196.7 million during the quarter, compared with the same period last year.

Zynga saw average daily active users fall 5.2% to 18 million in Q3, versus the year-ago period.

Zynga reported mobile revenue of $145.9 million, up 16% year-over-year and represents 80% of overall revenue. Mobile bookings came in at $162.3 million, or 83% of overall bookings, increasing 34% year-over-year.

For Q4, Zynga expects GAAP revenue to fall in the range of $180 million to $190 million, lower than the consensus of $204.8 million. Net loss per share is estimated to be at 3 cents on a GAAP basis compared to the expected loss of 2 cents per share.

"In Q3, we executed well on our core business and our new launches. Our outperformance in the quarter was due to our over-delivery on CSR2 and advertising. We successfully launched two new, high quality mobile games, and our focus on our key live mobile franchises is paying off as demonstrated by the strong year-over-year growth of Zynga Poker, Social Slots and Words With Friends,” said Frank Gibeau, CEO of Zynga.

Here’s a graph that looks at Zynga’s price, consensus, and EPS surprise:

Zynga Inc. is the world's largest social game developer with users playing their games which include CityVille, FarmVille, FrontierVille, Words with Friends, Mafia Wars, Zynga Poker, Cafe World, and Treasure Isle. Zynga games are available on a number of global platforms including Facebook (NASDAQ:FB), MySpace, Yahoo (NASDAQ:YHOO), as well as the iPad, the iPhone and Android devices. They operate their games as live services. All of their games are free to play, and they generate revenue through the in-game sale of virtual goods and advertising.

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