Delivers $182M in Bookings and $1.7M in
Adjusted EBITDA in Q4
Zynga Inc. (NASDAQ:ZNGA), a leading social game developer, today
announced financial results for the fourth quarter ended December
31, 2015. In addition to today’s press release, a copy of our Q4
2015 Quarterly Earnings Letter, which outlines our Q4 2015
financial results and business outlook, is available on our website
at http://investor.zynga.com.
Zynga management will host a live Q&A session at 2:00 p.m.
Pacific Time (5:00 p.m. Eastern Time) today, February 10, to
discuss the Company's Q4 2015 performance and business outlook.
Questions may be asked on the call or submitted in advance via
email to investors@zynga.com, and the company will respond to as
many questions as possible.
“In terms of our financial scorecard, for 2015, we made good
progress in our transition to mobile on a bookings level but, due
to the lack of significant new releases, we saw an overall decline
in our audience. While our total bookings grew 1%, our core live
mobile franchises – Slots, Words With Friends and Poker – were up
63% and all of mobile grew 35%. We ended the year with mobile now
representing 73% of total bookings up from 60% in Q4 2014. We saw
our web business continue to decline with bookings down 32% and
audience down 53%. Overall for the year, we managed to support a
relatively large slate of new game development and user acquisition
while remaining profitable,” said Mark Pincus, CEO and Founder of
Zynga.
“Our mobile audience was down 1% in 2015. Within the quarter, it
was down sequentially by 5% driven by a lack of significant new
releases. However we’ve stemmed these declines for our core live
mobile franchises – Slots, Words With Friends and Poker – which
were up 1% for the quarter versus a loss of 6% in Q3. This was led
by Slots, which accelerated its audience growth rate from 6% in Q3
to 15% in Q4. Words With Friends moved from a loss of 7% in Q3 to
flat in Q4 and a 9% increase in the beginning of Q1. Poker has
moved from a 10% decline in Q3 to a 4% decline in Q4 and has
flipped to positive growth of 12% in the beginning of Q1,” Pincus
continued.
“For 2016 and beyond, growth and profits will be driven by our
ability to continue our momentum with live franchises and execute
on new game launches. While we get that Zynga has been a show me
story, in 2016, we have better visibility into our slate than ever
before, with 6 new games already in soft launch. While we have high
conviction in our ability to launch these games, the biggest
challenge will be delivering on long-term retention and the LTV to
support user acquisition at scale,” said Pincus.
“We expect to launch 10 new games in 2016. In Social Casino in
the first half of this year, we plan to launch Spin It Rich!, Willy
Wonka Slots, True Vegas and Vegas Diamond Slots. In Match-3, we
expect to launch 2 new games in the first half of this year with
Zindagi’s Crazy Cake Swap and a branded game leveraging the Wizard
of Oz license. In Invest Express, we expect to launch a sequel to
FarmVille 2: Country Escape as well as CityVille Mobile in the
second half of 2016. Finally, in Action Strategy, we also expect to
launch CSR2 and Dawn of Titans in the second half of the year. As
we exit the year with this slate of new games launched and in the
market, we expect to have changed our mix of R&D and unlaunched
slate to live, revenue generating games which will improve our
company’s predictability, profitability and growth,” said
Pincus.
2015 Performance Summary
- Ended 2015 with $700 million in reported bookings; up 1%
year-over-year.
- $17 million in Adjusted EBITDA; down 57% year-over-year.
- Grew mobile bookings 35% year-over-year; web bookings declined
32% year-over-year.
- Delivered strong player monetization growth; ABPU up 26%
year-over-year.
- Strongest advertising year to date; 2015 ads and other bookings
up 22% year-over-year.
- DAU declined 20% year-over-year with mobile DAUs declining 1%
and web DAUs declining 53%.
- Launched a $100 million cost reduction plan; $45 million in
annualized savings from workforce reduction and $55 million in
annualized savings from reduction in centralized services costs and
spend.
Q4 Performance Highlights
Financial Highlights
- Bookings of $182 million; above the high end of the guidance
range, flat year-over-year and up 3% sequentially.
- Adjusted EBITDA of $1.7 million; within the guidance
range.
- Mobile bookings of $134 million or 73% of overall bookings, up
21% year-over-year and up 10% sequentially.
- Advertising and other bookings up 23% year-over-year and 24%
sequentially; best advertising quarter to date.
- $987 million in cash, cash equivalents and marketable
securities.
- Began $200 million share repurchase program which we completed
in the first quarter of 2016.
Product Updates
- Slots – Delivered highest quarterly bookings in franchise
history; bookings up 78% year-over-year and 7% sequentially.
Launched Princess Bride Slots and Black Diamond Casino, now
in the top 30 grossing Casino charts in the Apple App Store.
- Words With Friends – Delivered strongest quarterly bookings
performance in the history of the game; up 28% year-over-year and
29% sequentially. Consumers played 11% more words as a result of
fun new features.
- Dawn of Titans – On track to launch in 2016; continuing to see
strong potential with an average Apple App Store rating of 4.4
stars. Scaled to 14 test markets and ABPU remains strong.
- CSR2 – On track to launch in 2016; now testing across 10
markets with an average Apple App Store rating of 4.6 stars.
- CityVille – Entered into geo-lock with new CityVille Mobile in
the fourth quarter of 2015; worldwide launch expected in 2016.
Announces Acquisition of Zindagi Games
Today, Zynga announced its Q1 2016 acquisition of Zindagi Games.
Zindagi is made up of world-class engineers, game designers,
product managers and artists who have delivered high quality games
with small teams. Led by founders Umrao Mayer and George Simmons,
the Zindagi team has delivered high quality Match-3 games, in
addition to developing second party mobile titles.
Announces Completion of Share Repurchase
Program
Today, the company announced the completion of our last
repurchase program of $200 million. In aggregate, 80.2 million
shares were repurchased under the plan at an average price of
$2.50.
Financial Highlights (in thousands, except per
share data)
|
Quarter ended |
|
Year ended |
|
December 31,2015 |
|
September 30, 2015 |
|
December 31,2014 |
|
December 31,2015 |
|
December 31,2014 |
GAAP Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
|
185,769 |
|
|
$ |
195,737 |
|
$ |
|
192,547 |
|
|
$ |
|
764,717 |
|
|
$ |
|
690,410 |
|
Net income (loss) |
$ |
|
(46,869 |
) |
|
$ |
3,052 |
|
$ |
|
(45,126 |
) |
|
$ |
|
(117,181 |
) |
|
$ |
|
(225,900 |
) |
Diluted net income (loss) per share |
$ |
|
(0.05 |
) |
|
$ |
0.00 |
|
$ |
|
(0.05 |
) |
|
$ |
|
(0.13 |
) |
|
$ |
|
(0.26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Results |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bookings |
$ |
|
182,104 |
|
|
$ |
175,979 |
|
$ |
|
182,352 |
|
|
$ |
|
699,955 |
|
|
$ |
|
694,300 |
|
Adjusted EBITDA |
$ |
|
1,656 |
|
|
$ |
12,415 |
|
$ |
|
9,432 |
|
|
$ |
|
17,127 |
|
|
$ |
|
39,932 |
|
Non-GAAP net income (loss) |
$ |
|
375 |
|
|
$ |
3,681 |
|
$ |
|
(2,451 |
) |
|
$ |
|
(10,235 |
) |
|
$ |
|
(12,582 |
) |
Non-GAAP earnings (loss) per share |
$ |
|
0.00 |
|
|
$ |
0.00 |
|
$ |
|
0.00 |
|
|
$ |
|
(0.01 |
) |
|
$ |
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Player Metrics (users and payers in millions)
The company tracks operating metrics using internal systems which
rely on internal company data and third party data. We rely on the
veracity of data provided by individuals and reported by third
parties to calculate our metrics and reduce duplication of
data. In the first quarter of 2015, the company modified its
calculations to take into account our business's transition to
mobile and updates to our operating metrics which utilize
additional third party data to help us identify whether a player
logged in under two or more accounts is the same individual. As a
result of these changes, we revised the definitions for DAUs, MAUs,
MUUs, and MUPs in the first quarter of 2015. In the third quarter
of 2015, the company made a subsequent modification to its
calculations of MUU to further reduce duplication. For comparative
purposes, all of these key operating metrics have been revised for
the fourth quarter of 2014 to reflect the company’s current
definitions and calculations for all periods presented. Please
refer to our Quarterly Report on Form 10-Q for the quarters ended
March 31, 2015, June 30, 2015, September 30, 2015 and, when filed,
our Annual Report on Form 10-K for the year ended December 31, 2015
for a full explanation of the changes and the comparison of the
revised and as reported numbers for 2014 and 2015.
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
December 31, 2015 |
|
September 30, 2015 |
|
December 31, 2014 |
|
Q4’15 Q/Q |
|
Q4’15 Y/Y |
Average daily
active users (DAU) |
|
|
18 |
|
|
|
|
19 |
|
|
|
|
24 |
|
|
|
(5 |
%) |
|
|
(24 |
%) |
Average mobile
DAUs |
|
|
15 |
|
|
|
|
16 |
|
|
|
|
18 |
|
|
|
(5 |
%) |
|
|
(14 |
%) |
Average web
DAUs |
|
|
3 |
|
|
|
|
3 |
|
|
|
|
6 |
|
|
|
(7 |
%) |
|
|
(49 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
monthly active user (MAUs) |
|
|
68 |
|
|
|
|
75 |
|
|
|
|
98 |
|
|
|
(9 |
%) |
|
|
(30 |
%) |
Average mobile
MAUs |
|
|
55 |
|
|
|
|
61 |
|
|
|
|
70 |
|
|
|
(9 |
%) |
|
|
(21 |
%) |
Average web
MAUs |
|
|
13 |
|
|
|
|
14 |
|
|
|
|
28 |
|
|
|
(11 |
%) |
|
|
(54 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily
bookings per average DAU (ABPU) |
$ |
|
0.110 |
|
|
$ |
|
0.100 |
|
|
$ |
|
0.084 |
|
|
|
9 |
% |
|
|
31 |
% |
Average
monthly unique users (MUUs)(1) |
|
|
48 |
|
|
|
|
51 |
|
|
|
|
64 |
|
|
|
(5 |
%) |
|
|
(24 |
%) |
Average
monthly unique payers (MUPs)(1) |
|
|
0.8 |
|
|
|
|
0.9 |
|
|
|
|
1.0 |
|
|
|
(7 |
%) |
|
|
(19 |
%) |
Payer
conversion(1) |
|
|
1.7 |
% |
|
|
|
1.7 |
% |
|
|
|
1.6 |
% |
|
|
(2 |
%) |
|
|
7 |
% |
|
(1) MUUs, MUPs and payer conversion exclude NaturalMotion
legacy games (CSR Racing, CSR Classics and Clumsy Ninja) and games
from recently acquired Rising Tide as our systems are unable to
distinguish whether a player of these games is also a player of
other Zynga games. We exclude players of these games to avoid
potential duplication. |
|
Fourth Quarter 2015 Financial Summary
- Revenue: Revenue was $186 million for the
fourth quarter of 2015, a decrease of 5% compared to the third
quarter of 2015 and a decrease of 4% compared to the fourth quarter
of 2014. Online game revenue was $130 million, a decrease of 14%
compared to the third quarter of 2015 and a decrease of 4% compared
to the fourth quarter of 2014. Advertising and other revenue was
$56 million, an increase of 26% compared to the third quarter of
2015 and a decrease of 2% compared to the fourth quarter of 2014.
Zynga Poker, FarmVille 2, Hit It Rich! Slots and Wizard of Oz Slots
accounted for 18%, 17%, 17% and 15% of online game revenue,
respectively, for the fourth quarter of 2015 while FarmVille 2,
Zynga Poker, Hit It Rich! Slots, FarmVille 2: Country Escape and
Wizard of Oz Slots accounted for 21%, 17%, 16%, 14% and 12%,
respectively, for the third quarter of 2015.
- Bookings: Bookings were $182 million for the
fourth quarter of 2015, an increase of 3% compared to the third
quarter of 2015 and flat compared to the fourth quarter of
2014.
- Net income (loss): Net loss was $47 million
for the fourth quarter of 2015, compared to net income of $3
million for the third quarter of 2015 and net loss of $45 million
for the fourth quarter of 2014. The quarter-over-quarter change in
net loss was primarily due to higher costs and expenses (primarily,
in order of significance, restructuring expense, marketing costs
and third party hosting costs) as well as a tax benefit recorded in
the third quarter of 2015 in connection with our acquisition of
Rising Tide Games.
- Adjusted EBITDA: Adjusted EBITDA was $2
million for the fourth quarter of 2015, compared to $12 million in
the third quarter of 2015 and $9 million for the fourth quarter of
2014. The quarter-over-quarter decrease in adjusted EBITDA was
primarily due to higher marketing costs due to seasonality and, to
a lesser extent, higher third party hosting costs due to our data
center migration.
- Non-GAAP net income (loss): Non-GAAP net
income was $0.4 million for the fourth quarter of 2015, compared to
non-GAAP net income of $4 million in the third quarter of 2015 and
non-GAAP net loss of $2 million in the fourth quarter of 2014.
- Net income (loss) per share: Diluted net loss
per share was $0.05 for the fourth quarter of 2015, compared to
diluted net income per share of $0.00 for the third quarter of 2015
and diluted net loss per share of $0.05 for the fourth quarter of
2014.
- Non-GAAP earnings (loss) per share: Non-GAAP
earnings per share was $0.00 for the fourth quarter of 2015,
compared to non-GAAP earnings per share of $0.00 for the
third quarter of 2015 and non-GAAP loss per share of $0.00 for the
fourth quarter of 2014.
- Cash and cash flow: As of December 31, 2015,
cash, cash equivalents and marketable securities were approximately
$987 million, compared to $1.07 billion as of September 30, 2015.
In the fourth quarter of 2015, we repurchased 37.9 million shares
of our Class A common stock at a weighted average price of $2.60
per share for a total of $98.9 million. Cash flow from operations
was $7 million for the fourth quarter of 2015, compared to ($5)
million for the third quarter of 2015 and $4 million for the fourth
quarter of 2014. Free cash flow was $7 million for the fourth
quarter of 2015 compared to ($7) million for the third quarter of
2015 and $2 million for the fourth quarter of 2014.
2015 Annual Financial Summary
- Revenue: Revenue was $765 million in 2015, an
increase of 11% on a year-over-year basis. Online game revenue was
$591 million, an increase of 10% on a year-over-year basis.
Advertising revenue was $174 million, an increase of 14% on a
year-over-year basis.
- Bookings: Bookings were $700 million in 2015,
an increase of 1% on a year-over-year basis.
- Net income (loss): Net loss was $117 million
in 2015, which included $132 million of stock-based expense, $32
million of restructuring expense and a $9 million income tax
benefit, compared to net loss of $226 million in 2014.
- Adjusted EBITDA: Adjusted EBITDA was $17
million in 2015, a decrease of 57% year-over-year, primarily due to
an increase in payment processing fees due to our increased mobile
bookings mix and, to a lesser extent, an increase in royalty
expense for licensed intellectual property.
- Non-GAAP net income (loss): Non-GAAP net loss
was $10 million in 2015, compared to non-GAAP net loss of $13
million in 2014.
- Net income (loss) per share: Diluted net loss
per share was $0.13 for the full year 2015, compared to diluted net
loss per share of $0.26 for the full year 2014.
- Non-GAAP earnings (loss) per share: Non-GAAP
loss per share was $0.01 for the full year 2015, compared to
non-GAAP loss per share of $0.01 for the full year 2014.
- Cash and cash flow: As of December 31, 2015,
cash, cash equivalents and marketable securities were approximately
$987 million, compared to $1.15 billion as of December 31, 2014. In
the fourth quarter of 2015, we repurchased 37.9 million shares of
our Class A common stock at a weighted average price of $2.60 per
share for a total of $98.9 million. Cash flow from operations was
($41) million for the year ended December 31, 2015, compared to
($5) million for the year ended December 31, 2014. Free cash flow
was ($48) million for the year ended December 31, 2015 compared to
($14) million for the year ended December 31, 2014.
Restructuring Charges From Our Cost Reduction Plan in
the First Quarter of 2015
We incurred a restructuring charge of $17 million in fourth
quarter of 2015 related to our first quarter of 2015 cost reduction
plan. This charge was offset by $2 million of credits from prior
period cost reduction plans, primarily related to executing a
sublease agreement in a data center facility we had previously
vacated.
First Quarter Outlook
Zynga’s outlook for the first quarter of 2016 is as follows:
- Revenue is projected to be in the range of $160 million to $175
million
- Net loss is projected to be in the range of ($40) million to
($30) million
- Net loss per share is projected to be in the range of ($0.05)
to ($0.03) based on a share count projected to be approximately 866
million shares
- Bookings are projected to be in the range of $150 million to
$165 million
- Adjusted EBITDA is projected to be in the range of ($10)
million to break-even
- Non-GAAP loss per share is projected to be in the range of
($0.01) to $0.00, based on a share count projected to be
approximately 866 million shares
Conference Call Details
In addition to today's press release, a copy of our Q4 2015
Quarterly Earnings Letter, which outlines our Q4 2015 financial
results and business outlook, is available on our website at
http://investor.zynga.com.
Zynga will host a live Q&A session today, February 10, 2016,
at 2:00 pm PST (5:00 pm EST) to discuss financial results.
Questions may be asked on the call or submitted in advance via
email to investors@zynga.com, and the company will respond to as
many questions as possible.
The live Q&A session can be accessed at
http://investor.zynga.com - a replay of which will be available
through the website after the call - or via the below conference
dial-in number:
Toll-Free Dial-In Number: (800) 537-0745 International Dial-In
Number: (253) 237-1142 Conference ID: 13589408
About Zynga Inc.
Zynga Inc. is a leading developer of the world's most popular
social games that are played by millions of monthly consumers. The
company has created evergreen franchises such as FarmVille, Zynga
Casino and Words With Friends. Zynga's NaturalMotion, an
Oxford-based mobile game and technology developer, is the creator
of hit mobile games in popular entertainment categories, including
CSR Racing, CSR Classics and Clumsy Ninja. Zynga games have been
played by more than 1 billion people around the world and are
available on a number of global platforms including Apple iOS,
Google Android, Facebook and Zynga.com. The company is
headquartered in San Francisco, California. Learn more about Zynga
at http://blog.zynga.com or follow us on Twitter and Facebook.
The Zynga Inc. logo is available
at http://www.globenewswire.com/newsroom/prs/?pkgid=11743
Key Operating Metrics
We manage our business by tracking several operating metrics:
"DAUs," which measure daily active users of our games, "MAUs,"
which measure monthly active users of our games, "MUUs," which
measure monthly unique users of our games, "MUPs," which measure
monthly unique payers in our games, and "ABPU," which measures our
average daily bookings per average DAU, each of which is recorded
by our internal analytics systems. The numbers for these operating
metrics are calculated using internal company data based on
tracking of user account activity. We also use third party network
logins to help us track whether a player logged under two or more
different user accounts is the same individual. We believe that the
numbers are reasonable estimates of our user base for the
applicable period of measurement; however, factors relating to user
activity and systems may impact these numbers.
Please refer to our Quarterly Report on Form 10-Q for the
quarters ended March 31, 2015, June 30, 2015, September 30, 2015
and, when filed, our Annual Report on Form 10-K for the year ended
December 31, 2015 for our updated definitions of "DAU,"
"MAU," "MUU," "MUP" and "ABPU".
MUUs, MUPs and payer conversion in this press release exclude
NaturalMotion legacy games (CSR Racing, CSR Classics and Clumsy
Ninja) and games from recently acquired Rising Tide as our systems
are unable to distinguish whether a player of these games is also a
player of other Zynga games. We exclude players of these games to
avoid potential duplication.
We acquired NaturalMotion in February 2014. As a result, the
financial information presented in this press release for January
2014 and a portion of February 2014 does not reflect any
contribution from NaturalMotion.
Forward-Looking Statements
This press release contains forward-looking statements relating
to, among other things, our outlook for the first quarter 2016
revenue, net loss, net loss per share, weighted average diluted
share count, bookings, Adjusted EBITDA, non-GAAP earnings per share
and non-GAAP weighted average diluted share count; certain other
financial items necessary for GAAP to Non-GAAP reconciliation; our
future operational plans, use of cash, strategies and prospects;
our cost structure and cost reduction plans and estimated savings
and charges, including our reduction in workforce and reduction in
centralized services costs and spend; our ability to accelerate
execution, drive profitability and nurture creativity and
innovation while reducing costs and lowering discretionary spend;
the breadth and depth of our 2015 game slate and our game slate for
2016 and the success of these slates; including recently launched
Princess Bride Slots and Black Diamond Casino and future launches
of Dawn of Titans, CSR2, CityVille Mobile, a sequel to
FarmVille 2: Country Escape, Spin It Rich!, Willy Wonka Slots, True
Vegas, Vegas Diamond Slots, Crazy Cake Swap and a Wizard of Oz
branded match-3 game; our ability to change our mix of R&D and
unlaunched game slate to live games; our ability to increase the
predictability of our business our continued transition to mobile;
our ability to sustain player engagement, optimize to increase
long-term player retention and monetize our live games (including
our Slots games, Words With Friends, Zynga Poker, and FarmVille
franchise games) and games in geo-lock testing, (including, Dawn of
Titans,CSR2 and CityVille Mobile); our ability to grow our mobile
bookings in 2016 and beyond; our ability to execute against our
strategy and deliver long-term value to our shareholders, employees
and players and fulfill our mission to connect the world through
games; our ability to attract and retain key employees in light of
business challenges, including employees key to franchise games and
planned launches and senior management; the impact of changes in
our senior management team and management teams, new hires and
other changes in our organization; the strength of our balance
sheet and our ability to effectively manage our cost structure and
investments; the timely launch and success of our games, including
the launch of our 2016 game slate (including Dawn of Titans,CSR2
and CityVille Mobile); the success of our acquisition of Rising
Tide Games and Zindagi Games; our ability to improve our execution
against audience growth and product quality; our ability to
effectively market our games; our ability to execute in mobile; our
ability to sustain and expand key games to sustain and grow
audiences, bookings, and engagement, including games within our
Slots Franchise (Hit It Rich! Slots, Wizard of Oz Slots and Black
Diamond Casino), Words with Friends, Zynga Poker, and our games
within our FarmVille franchise; investment in new game development,
marketing for live games and new game launches and core
infrastructure in data and analytics; our ability to build on our
social legacy in both our web games and our new mobile games and
build a player network across mobile games; our ability to
accurately forecast our upcoming game launches and bookings and
revenue related to upcoming game launches and the performance of
our existing games; our ability to operate in an entrepreneurial
manner, innovate on game mechanics, and leverage data and analytics
in our operations; our ability to utilize, protect, defend and
enforce our intellectual property; market opportunity in the social
gaming market, including the mobile market, the advertising market,
the market for social game categories in which we invest, and our
ability to capitalize on and contribute to this market
opportunity.
Forward-looking statements often include words such as
“outlook,” “project,” “plan,” “intend,” “could,” “should,” “would,”
“will,” “might,” “anticipate,” “estimate,” “continue,” “believe,”
“may,” “target,” “expect,” or similar expressions, or the negative
or plural of these words or expressions and statements in the
future tense are generally forward-looking. The achievement or
success of the matters covered by such forward-looking statements
is subject to a number of risks, uncertainties, and assumptions.
Moreover, we operate in a very competitive and rapidly changing
environment and industry. New risks may also emerge from time to
time. It is not possible for our management to predict all of the
risks related to our business and operations, nor can we assess the
impact of all factors on our business or the extent to which any
factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements we may make and reported results should not be
considered as an indication of our future performance. Factors that
could cause or contribute to such differences include, but are not
limited to, the ability of key games, including our franchise
games, to sustain or grow audiences, bookings and engagement; our
relationship with Facebook, changes in the Facebook platform and/or
changes in our agreement with Facebook; our relationship with
Apple, Google and other Android platform providers, changes in the
Android or iOS platforms and/or changes in our agreements with
Apple, Google and/or other Android platform providers; our
relationship and/or agreements with key licensing partners,
additional platform providers or any key partners; the
effectiveness of our cost-cutting activities and our ability to
control and reduce expenses, including our estimated savings and
charges associated with our restructuring efforts; our ability to
efficiently deploy employees, leverage our teams and talent,
including shifting resources when necessary to prioritize more
important projects; our ability to retain and attract new talent;
our ability to work as a team to execute against our strategy; our
use of working capital in general; attrition or decline in existing
games, including franchise games; our ability to launch and
monetize successfully new games and features for web and mobile in
a timely manner (such as the Weekly Word feature in Words With
Friends and the Leagues feature in Zynga Poker) and the success of
these games and features, including planned features for our
existing games; the process of integrating our operations into
NaturalMotion Limited’s (“NaturalMotion’s”), Rising Tide Games,
Inc.’s (“Rising Tide Games”) and Zindagi Games’s operations and
NaturalMotion’s, Rising Tide Games’s and Zindagi Games’s operations
into our operations, including but not limited to our expected
ability to expand our creative pipeline, accelerate our growth on
mobile and deliver hit NaturalMotion games in 2016 and hit games
from Rising Tide Games and Zindagi Games; planned launches from our
franchises and planned launches in the content categories where we
are focused; the ability of our games to generate revenue and
bookings for a significant period of time after launch and the
timing for market acceptance of new games; attrition or decline in
existing games, including franchise games; the effectiveness of our
marketing program and initiatives and our ability to obtain game
featuring from partners; our strategy of backing proven teams to
develop or expand our game offerings in the categories where we are
focused, the timely launch of our games in these categories and the
success of these game; our ability to understand industry trends,
such as seasonality, and position our business to take advantage of
these trends; our ability to successfully monitor and adapt to
changes in gaming platform and consumer demand as the industry
continues to evolve; our ability to run successful in game
advertising campaigns; our exposure to illegitimate credit card
activity and other security risks, including sales or purchases of
virtual goods used in our games through unauthorized or
illegitimate third-party websites; our ability to anticipate and
address technical challenges that may arise; our ability to protect
our players’ information and adequately address privacy concerns;
our ability to maintain technology infrastructure and employees
that can efficiently and reliably handle increased player usage,
changes in mobile devices and game platforms, fast load times and
the rapid deployment of new features and products; our ability to
maintain reliable security services and infrastructure to protect
against security breaches, computer malware and hacking attacks;
competition in our industry; changing interests of players; our
exposure to intellectual property disputes and other litigation;
asset impairment charges; our evaluation of new business
opportunities and acquisitions by us, including integration of
newly acquired businesses; our future spend, including spend on
R&D and marketing and our future margins; our ability to renew
our existing brand, technology and content licenses as they expire
and secure new licenses for top brands; our ability to manage
risks, costs and other challenges associated with international
expansion; the impact of laws and regulations on our business;
changes in corporate strategy or management; and our search for a
Chief Financial Officer.
More information about factors that could affect our operating
results is included under the captions “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in our Annual Report on Form 10-K for the
year ended December 31, 2014, our Quarterly report on Form 10-Q for
the three months ended September 30, 2015, and, when filed, our
Annual Report on Form 10-K for the year ended December 31, 2015,
copies of which may be obtained by visiting our Investor Relations
web site at http://investor.zynga.com or the SEC’s web site at
www.sec.gov. Undue reliance should not be placed on the
forward-looking statements in this press release, which are based
on information available to us on the date hereof. There is no
guarantee that the circumstances described in our forward-looking
statements will occur. Except as required by law, we assume no
obligation to update any forward-looking statements for any reason
to conform these statements to actual results or to changes in our
expectations. The results we report in our Annual Report on Form
10-K for the year ended December 31, 2015 could differ from the
preliminary results we have announced in this press release.
Non-GAAP Financial Measures
We have provided in this release non-GAAP financial information
including bookings, Adjusted EBITDA, non-GAAP net income (loss),
non-GAAP operating expense, free cash flow, non-GAAP provision for
(benefit from) income taxes, and non-GAAP net income (loss) per
share, as a supplement to the consolidated financial statements,
which are prepared in accordance with United States generally
accepted accounting principles ("GAAP"). Management uses these
non-GAAP financial measures internally in analyzing our financial
results to assess operational performance and liquidity. The
presentation of this financial information is not intended to be
considered in isolation or as a substitute for the financial
information prepared in accordance with GAAP. We believe that both
management and investors benefit from referring to these non-GAAP
financial measures in assessing our performance and when planning,
forecasting and analyzing future periods. We believe these non-GAAP
financial measures are useful to investors because they allow for
greater transparency with respect to key financial metrics we use
in making operating decisions and because our investors and
analysts use them to help assess the health of our business. In
line with our historical practice, the financial information
presented herein is provided on a supplemental, non-GAAP basis
unless otherwise indicated. We have provided reconciliations
between our historical and first quarter 2016 outlook for non-GAAP
financial measures to the most directly comparable GAAP financial
measures. Reconciliations of non-GAAP financial measures to the
most recent directly comparable GAAP financial measures for the
fourth quarter and 2015 may be found (1) in this press release
announcing fourth quarter financial results which is included as
Exhibit 99.1 to our current report on Form 8-K , filed with the
Securities and Exchange Commission on February 10, 2016, and, when
filed, in our Annual Report on Form 10-K for the year ended
December 31, 2015, copies of which may be obtained by visiting our
Investor Relations web site at http://investor.zynga.com or the
SEC's web site at www.sec.gov, and (2) in our fourth quarter
earnings slides presentation, dated February 10, 2016, a copy of
which may be obtained by visiting our Investor Relations web site
at http://investor.zynga.com.
Some limitations of bookings, Adjusted EBITDA, non-GAAP net
income (loss), non-GAAP operating expense, free cash flow, non-GAAP
provision for (benefit from) income taxes, and non-GAAP net income
(loss) per share:
- Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP
provision for (benefit from) expense do not include the impact of
stock-based expense, acquisition-related transaction expenses,
contingent consideration fair value adjustments and restructuring
expense;
- Total Bookings, Adjusted EBITDA, non-GAAP net income (loss) and
non-GAAP provision for (benefit from) expense do not reflect that
we defer and recognize online game revenue and revenue from certain
advertising transactions over the estimated average life of durable
virtual goods or as virtual goods are consumed;
- Adjusted EBITDA does not reflect income tax expense and does
not include other income (expense) net, which includes foreign
exchange gains and losses and interest income;
- Adjusted EBITDA excludes depreciation and amortization of
intangible assets, while non-GAAP net loss excludes amortization of
intangible assets from acquisitions. Although depreciation and
amortization are non-cash charges, the assets being depreciated and
amortized may have to be replaced in the future;
- Free cash flow is derived from net cash provided by operating
activities less cash spent on capital expenditures and
acquisitions, and removing the excess income tax benefits or costs
associated with stock-based awards; and
- Other companies, including companies in our industry, may
calculate bookings, Adjusted EBITDA, non-GAAP net loss, non-GAAP
operating expense, free cash flow, non-GAAP provision for (benefit
from) income taxes, and non-GAAP net loss per share differently or
not at all, which will reduce their usefulness as a comparative
measure.
Because of these limitations, you should consider bookings,
Adjusted EBITDA, non-GAAP net income (loss), non-GAAP operating
expense, free cash flow, non-GAAP provision for (benefit from)
income taxes, and non-GAAP net income (loss) per share, along with
other financial performance measures, including revenue, net income
(loss), diluted net loss per share, cash flow from operations, GAAP
operating expense, GAAP operating margin and our other financial
results presented in accordance with GAAP. See the GAAP to non-GAAP
reconciliations below and in the places listed above for further
details.
|
ZYNGA
INC. |
CONSOLIDATED BALANCE SHEETS |
(In
thousands, unaudited) |
|
|
|
|
|
|
|
December
31, |
|
December
31, |
|
|
2015 |
|
2014 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
|
742,217 |
|
|
$ |
|
131,303 |
|
|
Marketable securities |
|
|
245,033 |
|
|
|
|
785,221 |
|
|
Accounts receivable |
|
|
79,610 |
|
|
|
|
89,611 |
|
|
Income tax receivable |
|
|
5,233 |
|
|
|
|
3,304 |
|
|
Deferred tax assets |
|
|
- |
|
|
|
|
2,765 |
|
|
Restricted cash |
|
|
209 |
|
|
|
|
48,047 |
|
|
Other current assets |
|
|
40,625 |
|
|
|
|
22,688 |
|
Total current assets |
|
|
1,112,927 |
|
|
|
|
1,082,939 |
|
|
|
|
|
|
|
|
Long-term marketable securities |
|
|
- |
|
|
|
|
231,385 |
|
Goodwill |
|
|
657,671 |
|
|
|
|
650,778 |
|
Other intangible assets, net |
|
|
64,016 |
|
|
|
|
66,861 |
|
Property and equipment, net |
|
|
273,221 |
|
|
|
|
297,919 |
|
Long-term restricted cash |
|
|
986 |
|
|
|
|
- |
|
Other long-term assets |
|
|
16,446 |
|
|
|
|
18,911 |
|
Total assets |
$ |
|
2,125,267 |
|
|
$ |
|
2,348,793 |
|
|
|
|
|
|
|
|
Liabilities and stockholders’
equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
|
29,676 |
|
|
$ |
|
14,965 |
|
|
Other current liabilities |
|
|
75,141 |
|
|
|
|
164,150 |
|
|
Deferred revenue |
|
|
128,839 |
|
|
|
|
189,923 |
|
Total current liabilities |
|
|
233,656 |
|
|
|
|
369,038 |
|
|
|
|
|
|
|
|
Deferred revenue |
|
|
204 |
|
|
|
|
3,882 |
|
Deferred tax liabilities |
|
|
6,026 |
|
|
|
|
5,323 |
|
Other non-current liabilities |
|
|
94,151 |
|
|
|
|
74,858 |
|
Total liabilities |
|
|
334,037 |
|
|
|
|
453,101 |
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
Common stock and additional paid in
capital |
|
|
3,234,551 |
|
|
|
|
3,096,982 |
|
Treasury stock |
|
|
(98,942 |
) |
|
|
|
- |
|
Accumulated other comprehensive
income (loss) |
|
|
(52,388 |
) |
|
|
|
(29,175 |
) |
Accumulated deficit |
|
|
(1,291,991 |
) |
|
|
|
(1,172,115 |
) |
Total stockholders’ equity |
|
|
1,791,230 |
|
|
|
|
1,895,692 |
|
Total liabilities and stockholders’
equity |
$ |
|
2,125,267 |
|
|
$ |
|
2,348,793 |
|
|
|
|
|
|
|
|
ZYNGA INC. |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(In thousands, except per share data,
unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Twelve Months Ended |
|
|
|
December 31, 2015 |
|
|
September 30, 2015 |
|
December 31, 2014 |
|
December 31, 2015 |
|
December 31, 2014 |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online game |
$ |
|
129,463 |
|
|
$ |
|
151,168 |
|
|
$ |
|
135,011 |
|
|
$ |
|
590,755 |
|
|
$ |
|
537,619 |
|
|
Advertising and other |
|
|
56,306 |
|
|
|
|
44,569 |
|
|
|
|
57,536 |
|
|
|
|
173,962 |
|
|
|
|
152,791 |
|
Total revenue |
|
|
185,769 |
|
|
|
|
195,737 |
|
|
|
|
192,547 |
|
|
|
|
764,717 |
|
|
|
|
690,410 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
63,397 |
|
|
|
|
57,187 |
|
|
|
|
55,492 |
|
|
|
|
235,985 |
|
|
|
|
213,570 |
|
|
Research and development |
|
|
80,770 |
|
|
|
|
78,416 |
|
|
|
|
105,134 |
|
|
|
|
357,602 |
|
|
|
|
396,553 |
|
|
Sales and marketing |
|
|
53,066 |
|
|
|
|
43,549 |
|
|
|
|
41,898 |
|
|
|
|
169,573 |
|
|
|
|
157,364 |
|
|
General and administrative |
|
|
39,333 |
|
|
|
|
25,765 |
|
|
|
|
38,961 |
|
|
|
|
143,284 |
|
|
|
|
167,664 |
|
Total costs and expenses |
|
|
236,566 |
|
|
|
|
204,917 |
|
|
|
|
241,485 |
|
|
|
|
906,444 |
|
|
|
|
935,151 |
|
Income (loss) from operations |
|
|
(50,797 |
) |
|
|
|
(9,180 |
) |
|
|
|
(48,938 |
) |
|
|
|
(141,727 |
) |
|
|
|
(244,741 |
) |
Interest income |
|
|
603 |
|
|
|
|
566 |
|
|
|
|
779 |
|
|
|
|
2,568 |
|
|
|
|
3,266 |
|
Other income (expense), net |
|
|
1,463 |
|
|
|
|
2,285 |
|
|
|
|
5,580 |
|
|
|
|
13,306 |
|
|
|
|
8,248 |
|
Income (loss) before income
taxes |
|
|
(48,731 |
) |
|
|
|
(6,329 |
) |
|
|
|
(42,579 |
) |
|
|
|
(125,853 |
) |
|
|
|
(233,227 |
) |
Provision for (benefit from) income
taxes |
|
|
(1,862 |
) |
|
|
|
(9,381 |
) |
|
|
|
2,547 |
|
|
|
|
(8,672 |
) |
|
|
|
(7,327 |
) |
Net income (loss) |
$ |
|
(46,869 |
) |
|
$ |
|
3,052 |
|
|
$ |
|
(45,126 |
) |
|
$ |
|
(117,181 |
) |
|
$ |
|
(225,900 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
|
(0.05 |
) |
|
$ |
|
0.00 |
|
|
$ |
|
(0.05 |
) |
|
$ |
|
(0.13 |
) |
|
$ |
|
(0.26 |
) |
|
|
Diluted |
$ |
|
(0.05 |
) |
|
$ |
|
0.00 |
|
|
$ |
|
(0.05 |
) |
|
$ |
|
(0.13 |
) |
|
$ |
|
(0.26 |
) |
|
Weighted average common shares used
to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
922,540 |
|
|
|
|
921,116 |
|
|
|
|
890,350 |
|
|
|
|
913,511 |
|
|
|
|
874,509 |
|
|
|
Diluted |
|
|
922,540 |
|
|
|
|
940,032 |
|
|
|
|
890,350 |
|
|
|
|
913,511 |
|
|
|
|
874,509 |
|
|
Stock-based expense included in the
above line items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
$ |
|
1,712 |
|
|
$ |
|
991 |
|
|
$ |
|
1,232 |
|
|
$ |
|
4,547 |
|
|
$ |
|
4,623 |
|
|
|
Research and development |
|
|
24,063 |
|
|
|
|
22,308 |
|
|
|
|
23,380 |
|
|
|
|
94,548 |
|
|
|
|
83,673 |
|
|
|
Sales and marketing |
|
|
2,320 |
|
|
|
|
2,045 |
|
|
|
|
1,422 |
|
|
|
|
7,501 |
|
|
|
|
5,927 |
|
|
|
General and administrative |
|
|
3,677 |
|
|
|
|
5,092 |
|
|
|
|
9,731 |
|
|
|
|
24,979 |
|
|
|
|
35,010 |
|
|
Total stock-based expense |
$ |
|
31,772 |
|
|
$ |
|
30,436 |
|
|
$ |
|
35,765 |
|
|
$ |
|
131,575 |
|
|
$ |
|
129,233 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZYNGA INC. |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(In thousands, unaudited) |
|
|
|
|
|
|
|
|
|
Three
Months Ended |
|
Twelve
Months Ended |
|
|
|
December 31, 2015 |
|
|
September 30, 2015 |
|
December 31, 2014 |
|
December 31, 2015 |
|
December 31, 2014 |
Operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) |
$ |
|
(46,869 |
) |
|
$ |
|
3,052 |
|
|
$ |
|
(45,126 |
) |
|
$ |
|
(117,181 |
) |
|
$ |
|
(225,900 |
) |
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization |
|
|
11,966 |
|
|
|
|
11,287 |
|
|
|
|
18,341 |
|
|
|
|
54,315 |
|
|
|
|
82,894 |
|
|
Stock-based
expense |
|
|
31,772 |
|
|
|
|
30,436 |
|
|
|
|
35,765 |
|
|
|
|
131,575 |
|
|
|
|
129,233 |
|
|
Accretion and
amortization on marketable securities |
|
|
770 |
|
|
|
|
1,057 |
|
|
|
|
2,278 |
|
|
|
|
5,711 |
|
|
|
|
10,061 |
|
|
(Gain) loss
from sales of investments, assets and other, net |
|
|
725 |
|
|
|
|
(633 |
) |
|
|
|
(3,741 |
) |
|
|
|
(5,558 |
) |
|
|
|
(1,610 |
) |
|
Tax benefits
(costs) from stock-based awards |
|
|
899 |
|
|
|
|
90 |
|
|
|
|
(86 |
) |
|
|
|
989 |
|
|
|
|
(86 |
) |
|
Excess tax
benefits (costs) from stock-based awards |
|
|
(899 |
) |
|
|
|
(90 |
) |
|
|
|
86 |
|
|
|
|
(989 |
) |
|
|
|
86 |
|
|
Deferred
income taxes |
|
|
(3,542 |
) |
|
|
|
(10,392 |
) |
|
|
|
(869 |
) |
|
|
|
(12,693 |
) |
|
|
|
(10,982 |
) |
Changes in
operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable, net |
|
|
7,604 |
|
|
|
|
(4,313 |
) |
|
|
|
(3,046 |
) |
|
|
|
10,148 |
|
|
|
|
(16,489 |
) |
|
Income tax
receivable |
|
|
(217 |
) |
|
|
|
(183 |
) |
|
|
|
2,233 |
|
|
|
|
(1,929 |
) |
|
|
|
5,433 |
|
|
Other
assets |
|
|
(4,944 |
) |
|
|
|
(3,068 |
) |
|
|
|
4,831 |
|
|
|
|
(16,804 |
) |
|
|
|
971 |
|
|
Accounts
payable |
|
|
2,169 |
|
|
|
|
(536 |
) |
|
|
|
(474 |
) |
|
|
|
14,395 |
|
|
|
|
(6,393 |
) |
|
Deferred
revenue |
|
|
(3,665 |
) |
|
|
|
(19,757 |
) |
|
|
|
(10,195 |
) |
|
|
|
(64,762 |
) |
|
|
|
3,643 |
|
|
Other
liabilities |
|
|
11,157 |
|
|
|
|
(12,062 |
) |
|
|
|
4,348 |
|
|
|
|
(38,203 |
) |
|
|
|
24,628 |
|
Net cash
provided by (used in) operating activities |
|
|
6,926 |
|
|
|
|
(5,112 |
) |
|
|
|
4,345 |
|
|
|
|
(40,986 |
) |
|
|
|
(4,511 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of
marketable securities |
|
|
- |
|
|
|
|
- |
|
|
|
|
(141,253 |
) |
|
|
|
(101,091 |
) |
|
|
|
(758,509 |
) |
Sales and
maturities of marketable securities |
|
|
165,181 |
|
|
|
|
211,350 |
|
|
|
|
138,526 |
|
|
|
|
867,198 |
|
|
|
|
806,232 |
|
Acquisition of
property and equipment |
|
|
(985 |
) |
|
|
|
(1,608 |
) |
|
|
|
(2,123 |
) |
|
|
|
(7,832 |
) |
|
|
|
(9,201 |
) |
Proceeds from
sale of property and equipment |
|
|
64 |
|
|
|
|
750 |
|
|
|
|
- |
|
|
|
|
814 |
|
|
|
|
5,059 |
|
Business
acquisition, net of cash acquired |
|
|
- |
|
|
|
|
(20,023 |
) |
|
|
|
(700 |
) |
|
|
|
(20,023 |
) |
|
|
|
(392,411 |
) |
Proceeds from
sale of equity method investment |
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
10,507 |
|
|
|
|
- |
|
Other
investing activities, net |
|
|
- |
|
|
|
|
- |
|
|
|
|
4,314 |
|
|
|
|
- |
|
|
|
|
4,671 |
|
Net cash
provided by (used in) investing activities |
|
|
164,260 |
|
|
|
|
190,469 |
|
|
|
|
(1,236 |
) |
|
|
|
749,573 |
|
|
|
|
(344,159 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase of
common stock |
|
|
(91,870 |
) |
|
|
|
- |
|
|
|
|
- |
|
|
|
|
(91,870 |
) |
|
|
|
- |
|
Taxes paid
related to net share settlement of equity awards |
|
|
(1,036 |
) |
|
|
|
(453 |
) |
|
|
|
(253 |
) |
|
|
|
(2,902 |
) |
|
|
|
(1,216 |
) |
Proceeds from
employee stock purchase plan and exercise of stock options |
|
|
275 |
|
|
|
|
2,957 |
|
|
|
|
693 |
|
|
|
|
7,567 |
|
|
|
|
16,421 |
|
Excess tax
benefits (costs) from stock-based awards |
|
|
899 |
|
|
|
|
90 |
|
|
|
|
(86 |
) |
|
|
|
989 |
|
|
|
|
(86 |
) |
Acquisition-related contingent consideration payment |
|
|
- |
|
|
|
|
- |
|
|
|
|
- |
|
|
|
|
(10,790 |
) |
|
|
|
- |
|
Net cash
provided by (used in) financing activities |
|
|
(91,732 |
) |
|
|
|
2,594 |
|
|
|
|
354 |
|
|
|
|
(97,006 |
) |
|
|
|
15,119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
|
(257 |
) |
|
|
|
(359 |
) |
|
|
|
(438 |
) |
|
|
|
(667 |
) |
|
|
|
(669 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
|
79,197 |
|
|
|
|
187,592 |
|
|
|
|
3,025 |
|
|
|
|
610,914 |
|
|
|
|
(334,220 |
) |
Cash and cash
equivalents, beginning of period |
|
|
663,020 |
|
|
|
|
475,428 |
|
|
|
|
128,278 |
|
|
|
|
131,303 |
|
|
|
|
465,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period |
$ |
|
742,217 |
|
|
$ |
|
663,020 |
|
|
$ |
|
131,303 |
|
|
$ |
|
742,217 |
|
|
$ |
|
131,303 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZYNGA
INC. |
RECONCILIATION OF GAAP TO NON-GAAP RESULTS |
(In
thousands, except per share data, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Twelve months ended |
|
December 31, 2015 |
|
September 30, 2015 |
|
December 31, 2014 |
|
December 31, 2015 |
|
December 31, 2014 |
Reconciliation of Revenue to
Bookings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
|
185,769 |
|
|
$ |
|
195,737 |
|
|
$ |
|
192,547 |
|
|
$ |
|
764,717 |
|
|
$ |
|
690,410 |
|
Change in deferred revenue |
|
|
(3,665 |
) |
|
|
|
(19,758 |
) |
|
|
|
(10,195 |
) |
|
|
|
(64,762 |
) |
|
|
|
3,890 |
|
Bookings |
$ |
|
182,104 |
|
|
$ |
|
175,979 |
|
|
$ |
|
182,352 |
|
|
$ |
|
699,955 |
|
|
$ |
|
694,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net income
(loss) to Adjusted EBITDA |
Net income (loss) |
$ |
|
(46,869 |
) |
|
$ |
|
3,052 |
|
|
$ |
|
(45,126 |
) |
|
$ |
|
(117,181 |
) |
|
$ |
|
(225,900 |
) |
Provision for (benefit from) income taxes |
|
|
(1,862 |
) |
|
|
|
(9,381 |
) |
|
|
|
2,547 |
|
|
|
|
(8,672 |
) |
|
|
|
(7,327 |
) |
Other income (expense), net |
|
|
(1,463 |
) |
|
|
|
(2,285 |
) |
|
|
|
(5,580 |
) |
|
|
|
(13,306 |
) |
|
|
|
(8,248 |
) |
Interest income |
|
|
(603 |
) |
|
|
|
(566 |
) |
|
|
|
(779 |
) |
|
|
|
(2,568 |
) |
|
|
|
(3,266 |
) |
Restructuring expense, net |
|
|
15,419 |
|
|
|
|
416 |
|
|
|
|
(3,391 |
) |
|
|
|
32,151 |
|
|
|
|
24,281 |
|
Gain (loss) on legal settlements |
|
|
- |
|
|
|
|
(1,681 |
) |
|
|
|
5,250 |
|
|
|
|
(1,681 |
) |
|
|
|
5,250 |
|
Depreciation and amortization |
|
|
11,966 |
|
|
|
|
11,287 |
|
|
|
|
18,341 |
|
|
|
|
54,315 |
|
|
|
|
82,894 |
|
Acquisition-related transaction expenses |
|
|
249 |
|
|
|
|
895 |
|
|
|
|
- |
|
|
|
|
1,144 |
|
|
|
|
6,425 |
|
Contingent consideration fair value
adjustment |
|
|
(3,288 |
) |
|
|
|
- |
|
|
|
|
12,600 |
|
|
|
|
6,112 |
|
|
|
|
32,700 |
|
Stock-based expense |
|
|
31,772 |
|
|
|
|
30,436 |
|
|
|
|
35,765 |
|
|
|
|
131,575 |
|
|
|
|
129,233 |
|
Change in deferred revenue |
|
|
(3,665 |
) |
|
|
|
(19,758 |
) |
|
|
|
(10,195 |
) |
|
|
|
(64,762 |
) |
|
|
|
3,890 |
|
Adjusted EBITDA |
$ |
|
1,656 |
|
|
$ |
|
12,415 |
|
|
$ |
|
9,432 |
|
|
$ |
|
17,127 |
|
|
$ |
|
39,932 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net income
(loss) to Non-GAAP net income (loss) |
Net income (loss) |
$ |
|
(46,869 |
) |
|
$ |
|
3,052 |
|
|
$ |
|
(45,126 |
) |
|
$ |
|
(117,181 |
) |
|
$ |
|
(225,900 |
) |
Acquisition-related transaction expenses |
|
|
249 |
|
|
|
|
895 |
|
|
|
|
- |
|
|
|
|
1,144 |
|
|
|
|
6,425 |
|
Contingent consideration fair value
adjustment |
|
|
(3,288 |
) |
|
|
|
- |
|
|
|
|
12,600 |
|
|
|
|
6,112 |
|
|
|
|
32,700 |
|
Stock-based expense |
|
|
31,772 |
|
|
|
|
30,436 |
|
|
|
|
35,765 |
|
|
|
|
131,575 |
|
|
|
|
129,233 |
|
Amortization of intangible assets from
acquisitions |
|
|
7,402 |
|
|
|
|
6,233 |
|
|
|
|
6,493 |
|
|
|
|
26,059 |
|
|
|
|
22,401 |
|
Change in deferred revenue |
|
|
(3,665 |
) |
|
|
|
(19,758 |
) |
|
|
|
(10,195 |
) |
|
|
|
(64,762 |
) |
|
|
|
3,890 |
|
Restructuring expense, net |
|
|
15,419 |
|
|
|
|
416 |
|
|
|
|
(3,391 |
) |
|
|
|
32,151 |
|
|
|
|
24,281 |
|
Gain (loss) on legal settlements |
|
|
- |
|
|
|
|
(1,681 |
) |
|
|
|
5,250 |
|
|
|
|
(1,681 |
) |
|
|
|
5,250 |
|
Tax effect of non-GAAP adjustments to net income
(loss) |
|
|
(645 |
) |
|
|
|
(15,912 |
) |
|
|
|
(3,847 |
) |
|
|
|
(23,652 |
) |
|
|
|
(10,862 |
) |
Non-GAAP net income (loss) |
$ |
|
375 |
|
|
$ |
|
3,681 |
|
|
$ |
|
(2,451 |
) |
|
$ |
|
(10,235 |
) |
|
$ |
|
(12,582 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and Non-GAAP diluted
shares |
|
|
939,110 |
|
|
|
|
940,032 |
|
|
|
|
890,350 |
|
|
|
|
913,511 |
|
|
|
|
874,509 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings (loss) per
share: |
$ |
|
0.00 |
|
|
$ |
|
0.00 |
|
|
$ |
|
0.00 |
|
|
$ |
|
(0.01 |
) |
|
$ |
|
(0.01 |
) |
Reconciliation of Cash provided by
operating activities to Free cash flow |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating
activities |
|
|
6,926 |
|
|
|
|
(5,112 |
) |
|
|
|
4,345 |
|
|
|
|
(40,986 |
) |
|
|
|
(4,511 |
) |
Acquisition of property and equipment |
|
|
(985 |
) |
|
|
|
(1,608 |
) |
|
|
|
(2,123 |
) |
|
|
|
(7,832 |
) |
|
|
|
(9,201 |
) |
Excess tax benefits (costs) from stock-based
awards |
|
|
899 |
|
|
|
|
90 |
|
|
|
|
(86 |
) |
|
|
|
989 |
|
|
|
|
(86 |
) |
Free cash flow |
$ |
|
6,840 |
|
|
$ |
|
(6,630 |
) |
|
$ |
|
2,136 |
|
|
$ |
|
(47,829 |
) |
|
$ |
|
(13,798 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP
provision for (benefit from) income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP provision for (benefit from) income
taxes |
|
|
(1,862 |
) |
|
|
|
(9,381 |
) |
|
|
|
2,547 |
|
|
|
|
(8,672 |
) |
|
|
|
(7,327 |
) |
Stock-based expense |
|
|
1,150 |
|
|
|
|
7,351 |
|
|
|
|
2,571 |
|
|
|
|
15,912 |
|
|
|
|
6,262 |
|
Amortization of intangible assets from
acquisitions |
|
|
530 |
|
|
|
|
3,858 |
|
|
|
|
457 |
|
|
|
|
5,720 |
|
|
|
|
1,086 |
|
Acquisition-related transaction expenses |
|
|
459 |
|
|
|
|
1,248 |
|
|
|
|
58 |
|
|
|
|
1,707 |
|
|
|
|
312 |
|
Contingent consideration fair value
adjustment |
|
|
(928 |
) |
|
|
|
- |
|
|
|
|
791 |
|
|
|
|
107 |
|
|
|
|
1,584 |
|
Change in deferred revenue |
|
|
(2,234 |
) |
|
|
|
(562 |
) |
|
|
|
(368 |
) |
|
|
|
(7,229 |
) |
|
|
|
188 |
|
Restructuring expense, net |
|
|
1,668 |
|
|
|
|
2,905 |
|
|
|
|
84 |
|
|
|
|
6,323 |
|
|
|
|
1,176 |
|
Gain (loss) on legal settlements |
|
|
- |
|
|
|
|
1,112 |
|
|
|
|
254 |
|
|
|
|
1,112 |
|
|
|
|
254 |
|
Non-GAAP provision for (benefit from)
income taxes |
$ |
|
(1,217 |
) |
|
$ |
|
6,531 |
|
|
$ |
|
6,394 |
|
|
$ |
|
14,980 |
|
|
$ |
|
3,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ZYNGA INC. |
RECONCILIATION OF GAAP TO NON-GAAP FIRST QUARTER 2016
OUTLOOK |
(In thousands, except per share data,
unaudited) |
|
|
|
First Quarter 2016 |
Reconciliation of
Revenue to Bookings |
|
|
Revenue range |
$ |
160,000 – 175,000 |
Change in deferred
revenue |
|
|
(10,000 |
) |
Bookings
range |
$ |
150,000 – 165,000 |
|
|
|
Reconciliation of
Net income (loss) to Adjusted EBITDA |
|
|
Net income (loss)
range |
$ |
(40,000) – (30,000) |
Provision for (benefit
from) income taxes |
|
0 – 3,000 |
Other income (expense),
net |
|
(2,000) – (3,000) |
Interest income |
|
|
(1,000 |
) |
Depreciation and
amortization |
|
|
12,000 |
|
Stock-based expense |
|
31,000 – 29,000 |
Change in deferred
revenue |
|
|
(10,000 |
) |
Adjusted EBITDA
range |
$ |
(10,000) – 0 |
|
|
|
Reconciliation of
Net income (loss) to Non-GAAP net income (loss) |
|
|
Net income (loss)
range |
$ |
(40,000) – (30,000) |
Stock-based expense |
|
31,000 – 29,000 |
Amortization of intangible
assets from acquisitions |
|
|
9,000 |
|
Change in deferred
revenue |
|
|
(10,000 |
) |
Non-GAAP net
income (loss) range |
$ |
(10,000) – (2,000) |
|
|
|
GAAP and Non-GAAP
diluted shares |
|
|
866,000 |
|
Net income (loss)
per share range |
$ |
(0.05) – (0.03) |
Non-GAAP earnings
(loss) per share range |
$ |
(0.01) – 0.00 |
|
|
|
Investors – Melissa Fisher
415-339-5266
investors@zynga.com
Press – Stephanie Hess
415-503-0303
press@zynga.com
Zynga (NASDAQ:ZNGA)
Historical Stock Chart
From Aug 2024 to Sep 2024
Zynga (NASDAQ:ZNGA)
Historical Stock Chart
From Sep 2023 to Sep 2024