Revenue and Bookings Ahead of
Guidance
Largest Annual Mobile Audience Ever
Highest Annual Revenue and Bookings in Zynga
History
Strong Quarterly and Annual Operating Cash
Flow
Zynga Inc. (NASDAQ: ZNGA) today released financial results for
the fourth quarter and full year ended December 31, 2021.
“Our strong Q4 results capped off our record 2021 performance
where we delivered our highest annual revenue and bookings ever,
while reaching the largest mobile audience in Zynga history,” said
Frank Gibeau, CEO of Zynga. “I am proud of our team’s execution
across all aspects of our growth strategy including live services,
new game development and investments in our advertising platform,
new markets and technologies to solidify Zynga as a leading
mobile-first, free-to-play live services company.”
Fourth Quarter 2021 Financial
Summary
$ in millions
Q4’21
Actuals
Q4’20
Actuals
Variance $
(Y/Y)
Variance %
(Y/Y)
Q4’21
Guidance (1)
Variance $
(Guidance)
Variance %
(Guidance)
Revenue
$
695
$
616
$
79
13
%
$
675
$
20
3
%
Change in deferred revenue & other
bookings adjustments
$
(31
)
$
(83
)
$
52
(62
%)
$
(40
)
$
9
(22
%)
Bookings
$
727
$
699
$
28
4
%
$
715
$
12
2
%
Net income (loss)
$
(67
)
$
(53
)
$
(14
)
27
%
$
(60
)
$
(7
)
12
%
Adjusted EBITDA
$
147
$
90
$
57
63
%
$
122
$
25
20
%
Note: Certain measures as presented differ due to the impact of
rounding. (1) Guidance as communicated at Q3’21 earnings.
- Revenue & Bookings: We achieved record Q4 revenue of
$695 million, an increase of 13% year-over-year, and our best-ever
quarterly bookings of $727 million, up 4% year-over-year. Online
game or user pay revenue was $534 million, up 7% year-over-year,
and user pay bookings were $555 million, down 5% year-over-year.
Advertising & other revenue was a quarterly record of $161
million, up 37% year-over-year, and advertising & other
bookings were an all-time best of $171 million, up 46%
year-over-year.
- Audience Metrics: Average mobile daily active users
(DAUs) were 37 million, up 3% year-over-year, and average mobile
monthly active users (MAUs) were 184 million, up 38%
year-over-year. Mobile average bookings per mobile DAU (ABPU) of
$0.204 decreased by 1% year-over-year.
- Costs & Expenses: Cost of revenue was $260 million
or 37% of revenue, compared to 41% of revenue in the year-ago
quarter. Non-GAAP cost of revenue was $194 million or 27% of
bookings, down from 28% of bookings in the year-ago quarter. GAAP
operating expenses were $437 million, representing 63% of revenue
and an improvement from 64% in the year-ago quarter. Non-GAAP
operating expenses of $357 million represented 49% of bookings,
versus 47% in the year-ago quarter.
- Profitability & Cash Flow: Net loss was $67 million,
compared to $53 million in the year-ago quarter, and adjusted
EBITDA was $147 million, up $57 million year-over-year. We
generated operating cash flow of $158 million, down $48 million
year-over-year.
2021 Annual Financial
Summary
$ in millions
FY21
Actuals
FY20
Actuals
Variance $
(Y/Y)
Variance %
(Y/Y)
FY21
Guidance (1)
Variance $
(Guidance)
Variance %
(Guidance)
Revenue
$
2,801
$
1,975
$
826
42
%
$
2,780
$
20
1
%
Change in deferred revenue & other
bookings adjustments
$
(25
)
$
(295
)
$
270
(91
%)
$
(34
)
$
9
(26
%)
Bookings
$
2,826
$
2,270
$
556
24
%
$
2,814
$
12
0
%
Net income (loss)
$
(104
)
$
(429
)
$
325
(76
%)
$
(97
)
$
(7
)
8
%
Adjusted EBITDA
$
641
$
266
$
374
141
%
$
616
$
25
4
%
Note: Certain measures as presented differ due to the impact of
rounding. (1) Guidance as communicated at Q3’21 earnings.
- Revenue & Bookings: We achieved our highest-ever
annual revenue of $2,801 million, an increase of 42%
year-over-year, and our best-ever annual bookings of $2,826
million, up 24% year-over-year. Online game revenue was a record
$2,249 million, up 35% year-over-year, and user pay bookings were a
record $2,265 million, up 15% year-over-year. Advertising &
other revenue was a record $551 million, up 79% year-over-year, and
advertising & other bookings were a record $561 million, up 83%
year-over-year.
- Audience Metrics: Record annual average mobile DAUs were
39 million, up 41% year-over-year, and all-time best annual average
mobile MAUs were 184 million, up 107% year-over-year. Annual mobile
ABPU of $0.194 decreased by 12% year-over-year.
- Costs & Expenses: Cost of revenue was $1,015 million
or 36% of revenue, compared to 41% of revenue in the prior year.
Non-GAAP cost of revenue was $787 million or 28% of bookings, down
from 30% of bookings in the prior year. GAAP operating expenses
were $1,730 million, representing 62% of revenue and a significant
improvement from 78% in the prior year. Non-GAAP operating expenses
of $1,386 million represented 49% of bookings versus 46% in the
prior year.
- Profitability & Cash Flow: Net loss was $104
million, an improvement of $325 million year-over-year, and
adjusted EBITDA was $641 million, up $374 million year-over-year.
We generated operating cash flow of $254 million, down $176 million
year-over-year, and ended the year with approximately $1.2 billion
in cash and investments.
Due to the pending transaction with Take-Two Interactive
Software announced on January 10, 2022, Zynga is not hosting a
conference call or providing forward guidance in connection with
the release of its quarterly results.
Please refer to the original press release announcing the
pending transaction with Take-Two Interactive Software here:
https://investor.zynga.com/news-releases/news-release-details/take-two-and-zynga-combine-bringing-together-best-class
About Zynga Inc.
Zynga is a global leader in interactive entertainment with a
mission to connect the world through games. With massive global
reach in more than 175 countries and regions, Zynga has a diverse
portfolio of popular game franchises that have been downloaded more
than four billion times on mobile including CSR Racing™, Empires
& Puzzles™, FarmVille™, Golf Rival™, Hair Challenge™, Harry
Potter: Puzzles & Spells™, High Heels!™, Merge Dragons!™, Merge
Magic!™, Toon Blast™, Toy Blast™, Words With Friends™ and Zynga
Poker™. With Chartboost, a leading mobile advertising and
monetization platform, Zynga is an industry-leading next-generation
platform with the ability to optimize programmatic advertising and
yields at scale. Founded in 2007, Zynga is headquartered in
California with locations in North America, Europe and Asia. For
more information, visit www.zynga.com or follow Zynga on Twitter,
Instagram, Facebook or the Zynga blog.
Key Operating Metrics
We manage our business by tracking several operating metrics:
“Mobile DAUs,” which measure daily active users of our mobile
games, “Mobile MAUs,” which measure monthly active users of our
mobile games, and “Mobile ABPU,” which measures our average daily
mobile bookings per average Mobile DAU, each of which is recorded
and estimated by our internal analytics systems. We determine these
operating metrics by using internal company data based on tracking
of user account activity. We also use information provided by third
parties, including third party network logins provided by platform
providers, to help us track whether a player logged in under two or
more different user accounts is the same individual. Overall, we
believe that the amounts are reasonable estimates of our user base
for the applicable period of measurement and that the methodologies
we employ and update from time-to-time are reasonably based on our
efforts to identify trends in player behavior. However, factors
relating to user activity and systems and our ability to identify
and detect attempts to replicate legitimate player activity may
impact these numbers.
Mobile DAUs. We define Mobile DAUs as the number of individuals
who played one of our mobile games during a particular day. Average
Mobile DAUs for a particular period is the average of the Mobile
DAUs for each day during that period. Under this metric, an
individual who plays two different mobile games on the same day is
counted as two DAUs. We use information provided by third parties
to help us identify individuals who play the same game to reduce
this duplication. However, we do not have the third party network
login data to link an individual who has played under multiple user
accounts for our hyper-casual games (which includes the games
acquired from Rollic in October 2020), mobile messenger games
(prior to the third quarter of 2021), Puzzle Combat, Merge Magic!
and games acquired from Gram Games in May 2018, Small Giant in
January 2019, Peak in July 2020 and StarLark in October 2021, and
accordingly, actual Mobile DAUs may be lower than reported due to
the potential duplication of these individuals. We use Mobile DAUs
as a measure of audience engagement.
Mobile MAUs. We define Mobile MAUs as the number of individuals
who played one of our mobile games in the 30-day period ending with
the measurement date. Average Mobile MAUs for a particular period
is the average of the Mobile MAUs at each month-end during that
period. Under this metric, an individual who plays two different
mobile games in the same 30-day period is counted as two Mobile
MAUs. We use information provided by third parties to help us
identify individuals who play the same game to reduce this
duplication. However, we do not have the third party network login
data to link an individual who has played under multiple user
accounts for our hyper-casual games (which includes the games
acquired from Rollic in October 2020), mobile messenger games
(prior to the third quarter of 2021), Puzzle Combat, Merge Magic!
and games acquired from Gram Games in May 2018, Small Giant in
January 2019, Peak in July 2020 and StarLark in October 2021, and
accordingly, actual Mobile MAUs may be lower than reported due to
the potential duplication of these individuals. We use Mobile MAUs
as a measure of total game audience size.
Mobile ABPU. We define Mobile ABPU as our total mobile bookings
in a given period, divided by the number of days in that period,
divided by the average Mobile DAUs during the period. We believe
that Mobile ABPU provides useful information to investors and
others in understanding and evaluating our results in the same
manner as management. We use Mobile ABPU as a measure of overall
monetization across all of our players through the sale of virtual
items and advertising.
Our business model around our social games is designed so that,
as more players play our games, social interactions increase and
the more valuable our games and our business become. All engaged
players of our games help drive our bookings and, consequently,
both online game revenue and advertising revenue. Virtual items are
purchased by players who are socializing with, competing against or
collaborating with other players, most of whom do not buy virtual
items. Accordingly, we primarily focus on Mobile DAUs, Mobile MAUs
and Mobile ABPU, which we believe collectively best reflect key
audience metrics.
Non-GAAP Financial
Measures
We have provided in this press release certain non-GAAP
financial measures to supplement our consolidated financial
statements prepared in accordance with U.S. GAAP (our “GAAP
financial statements”). Management uses non-GAAP financial measures
internally in analyzing our financial results to assess operational
performance and liquidity. Our non-GAAP financial measures may be
different from non-GAAP financial measures used by other
companies.
The presentation of our non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for, or
superior to, our GAAP financial statements. We believe that both
management and investors benefit from referring to our non-GAAP
financial measures in assessing our performance and when planning,
forecasting and analyzing future periods. We believe our non-GAAP
financial measures are useful to investors because they allow for
greater transparency with respect to key financial measures we use
in making operating decisions and because our investors and
analysts use them to help assess the health of our business.
We have provided reconciliations of our non-GAAP financial
measures used in this press release to the most directly comparable
GAAP financial measures in the following tables. Because of the
following limitations of our non-GAAP financial measures, you
should consider the non-GAAP financial measures presented in this
press release with our GAAP financial statements.
Key limitations of our non-GAAP financial measures include:
- Bookings does not reflect that we defer and recognize online
game revenue and revenue from certain advertising transactions over
the estimated average playing period of payers for durable virtual
items or as consumed for consumable virtual items; bookings also
includes other adjustments;
- Adjusted EBITDA does not include the impact of stock-based
compensation expense, acquisition-related transaction expenses,
contingent consideration fair value adjustments and expenses
incurred from vacated leases (which includes impairment charges
recognized);
- Adjusted EBITDA does not reflect provisions for or benefits
from income taxes and does not include other income (expense) net,
which includes foreign exchange and asset disposition gains and
losses, interest expense and interest income;
- Adjusted EBITDA excludes depreciation and amortization of
tangible and intangible assets. Although depreciation and
amortization are non-cash charges, the assets being depreciated or
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
- Non-GAAP Cost of Revenue and Non-GAAP Operating Expenses do not
include the impact of amortization of intangible assets from
acquisitions, contingent consideration fair value adjustments,
acquisition-related transaction expenses, expenses incurred from
vacated leases or stock-based compensation expense.
ZYNGA INC.
CONSOLIDATED BALANCE
SHEETS
(In millions, unaudited)
December 31,
December 31,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
984.0
$
1,364.4
Short-term investments
169.0
208.4
Accounts receivable, net of allowance of
$0.9 at December 31, 2021 and $0.5 at December 31, 2020
242.5
217.5
Restricted cash
161.0
—
Prepaid expenses
56.7
40.0
Other current assets
35.4
29.5
Total current assets
1,648.6
1,859.8
Long-term investments
—
2.0
Goodwill
3,601.1
3,160.8
Intangible assets, net
900.5
838.1
Property and equipment, net
30.3
39.3
Right-of-use assets
86.4
131.9
Restricted cash
40.2
136.0
Prepaid expenses
25.0
21.6
Other non-current assets
26.8
17.0
Total assets
$
6,358.9
$
6,206.5
Liabilities and stockholders’
equity
Current liabilities:
Accounts payable
$
95.6
$
57.2
Income tax payable
52.2
39.6
Deferred revenue
748.1
747.7
Operating lease liabilities
17.1
18.5
Other current liabilities
650.4
462.4
Total current liabilities
1,563.4
1,325.4
Convertible senior notes, net
1,343.8
1,289.9
Deferred revenue
0.3
0.3
Deferred tax liabilities, net
93.8
126.3
Non-current operating lease
liabilities
133.4
122.0
Other non-current liabilities
112.3
401.1
Total liabilities
3,247.0
3,265.0
Stockholders’ equity:
Common stock and additional paid-in
capital
5,625.0
5,276.5
Accumulated other comprehensive income
(loss)
(107.1
)
(50.7
)
Accumulated deficit
(2,406.0
)
(2,284.3
)
Total stockholders’ equity
3,111.9
2,941.5
Total liabilities and stockholders’
equity
$
6,358.9
$
6,206.5
ZYNGA INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share
data, unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2021
September 30, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Revenue:
Online game
$
534.0
$
571.1
$
498.6
$
2,249.2
$
1,667.2
Advertising and other
161.4
133.6
117.4
551.3
307.6
Total revenue
695.4
704.7
616.0
2,800.5
1,974.8
Costs and expenses:
Cost of revenue
260.1
240.8
250.4
1,014.9
811.8
Research and development
151.9
143.5
122.0
545.9
713.7
Sales and marketing
245.6
216.7
238.5
955.1
683.5
General and administrative
39.1
49.2
32.6
162.0
136.0
Impairment related to real estate
assets
—
66.8
—
66.8
—
Total costs and expenses
696.7
717.0
643.5
2,744.7
2,345.0
Income (loss) from operations
(1.3
)
(12.3
)
(27.5
)
55.8
(370.2
)
Interest income
1.4
1.6
1.3
6.4
11.6
Interest expense
(15.0
)
(14.8
)
(9.0
)
(59.2
)
(30.3
)
Other income (expense), net
(10.2
)
(0.6
)
(11.7
)
(11.2
)
(16.5
)
Income (loss) before income
taxes
(25.1
)
(26.1
)
(46.9
)
(8.2
)
(405.4
)
Provision for (benefit from) income
taxes
42.1
15.6
6.1
96.0
24.0
Net income (loss)
$
(67.2
)
$
(41.7
)
$
(53.0
)
$
(104.2
)
$
(429.4
)
Net income (loss) per share
attributable to common
stockholders:
Basic
$
(0.06
)
$
(0.04
)
$
(0.05
)
$
(0.09
)
$
(0.42
)
Diluted
$
(0.06
)
$
(0.04
)
$
(0.05
)
$
(0.09
)
$
(0.42
)
Weighted average common shares used
to compute net income (loss) per share attributable
to common stockholders:
Basic
1,124.9
1,097.1
1,079.9
1,099.1
1,016.8
Diluted
1,124.9
1,097.1
1,079.9
1,099.1
1,016.8
Stock-based compensation expense
included
in the above line items
Cost of revenue
$
0.8
$
0.8
$
0.5
$
2.8
$
2.0
Research and development
27.7
29.9
24.8
110.7
73.4
Sales and marketing
4.8
4.4
3.8
17.8
14.7
General and administrative
8.9
9.5
8.7
35.9
32.5
Total stock-based compensation
expense
$
42.2
$
44.6
$
37.8
$
167.2
$
122.6
ZYNGA INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In millions, unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2021
September 30, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Cash flows from operating
activities:
Net income (loss)
$
(67.2
)
$
(41.7
)
$
(53.0
)
$
(104.2
)
$
(429.4
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
68.2
58.1
55.0
238.9
142.1
Stock-based compensation expense
42.3
44.6
37.8
167.2
122.6
(Gain) loss from derivatives, sale of
investments and other assets and foreign currency, net
18.3
(1.6
)
13.5
13.4
16.0
(Accretion) and amortization on marketable
securities
—
—
0.1
—
(2.2
)
Noncash lease expense
4.0
4.2
4.1
16.9
15.9
Noncash interest expense
13.7
13.5
7.5
53.9
26.4
Change in deferred income taxes and
other
(6.9
)
(9.9
)
(21.8
)
(49.9
)
(32.9
)
Impairment related to real estate
assets
—
66.8
—
66.8
—
Changes in operating assets and
liabilities:
Accounts receivable, net
(33.5
)
68.0
33.3
(9.2
)
4.8
Prepaid expenses and other assets
(3.1
)
(10.7
)
2.7
(25.0
)
9.1
Accounts payable
45.0
5.8
10.2
37.6
5.5
Deferred revenue
22.1
(36.6
)
81.2
17.9
291.5
Income tax payable
(20.4
)
(12.9
)
17.3
4.7
36.7
Operating lease and other liabilities
75.6
(49.0
)
18.0
(175.2
)
223.1
Net cash provided by (used in)
operating activities
158.1
98.6
205.9
253.8
429.2
Cash flows from investing
activities:
Purchases of investments
(1.5
)
(3.1
)
(117.1
)
(614.2
)
(677.1
)
Maturities of investments
83.5
194.2
13.9
652.3
1,038.5
Sales of investments
—
—
—
—
549.9
Acquisition of property and equipment
(5.7
)
(2.5
)
(2.7
)
(12.5
)
(18.8
)
Proceeds from sale of property and
equipment
—
—
—
—
0.1
Business combinations, net of cash
acquired and restricted cash held in escrow
(286.1
)
(192.2
)
(151.4
)
(508.3
)
(942.5
)
Asset acquisitions of intangible
assets
—
(1.1
)
(6.0
)
(4.3
)
(6.0
)
Release of business combination restricted
cash held in escrow
—
—
—
—
(30.0
)
Other investing activities, net
(8.0
)
(4.9
)
(0.2
)
(13.9
)
(1.8
)
Net cash provided by (used in)
investing activities
(217.8
)
(9.6
)
(263.5
)
(500.9
)
(87.7
)
Cash flows from financing
activities:
Proceeds from issuance of debt, net of
issuance costs
—
—
856.7
(1.2
)
856.7
Purchase of capped calls
—
—
(63.0
)
—
(63.0
)
Taxes paid related to net share settlement
of stockholders' equity awards
(2.5
)
(3.0
)
(14.3
)
(17.5
)
(57.2
)
Proceeds from issuance of common stock
18.3
4.4
0.6
33.4
16.9
Acquisition-related contingent
consideration payments
—
(31.0
)
—
(56.1
)
(63.6
)
Net cash provided by (used in)
financing activities
15.8
(29.6
)
780.0
(41.4
)
689.8
Effect of exchange rate changes on
cash, cash equivalents and restricted cash
(19.3
)
(5.0
)
4.5
(26.7
)
15.8
Net change in cash, cash equivalents
and restricted cash
(63.2
)
54.4
726.9
(315.2
)
1,047.1
Cash, cash equivalents and restricted
cash, beginning of period
1,248.4
1,194.0
773.5
1,500.4
453.3
Cash, cash equivalents and restricted
cash, end of period
$
1,185.2
$
1,248.4
$
1,500.4
$
1,185.2
$
1,500.4
ZYNGA INC.
RECONCILIATION OF GAAP TO
NON-GAAP RESULTS
(In millions, unaudited)
Three Months Ended
Twelve Months Ended
December 31, 2021
September 30, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Reconciliation of Revenue to Bookings:
Total
Revenue
$
695.4
$
704.7
$
616.0
$
2,800.5
$
1,974.8
Change in deferred revenue
21.2
(37.0
)
82.9
15.3
295.1
Other bookings adjustments
10.0
—
—
10.0
—
Bookings
$
726.6
$
667.7
$
698.9
$
2,825.8
$
2,269.9
Reconciliation of Revenue to Bookings:
Mobile
Revenue
$
673.9
$
685.1
$
595.3
$
2,719.0
$
1,899.1
Change in deferred revenue
21.1
(35.8
)
84.4
16.3
296.4
Bookings
$
695.0
$
649.3
$
679.7
$
2,735.3
$
2,195.5
Reconciliation of Revenue to Bookings:
Advertising & Other
Revenue
$
161.4
$
133.6
$
117.4
$
551.3
$
307.6
Change in deferred revenue
0.1
—
(0.2
)
(0.1
)
(1.1
)
Other bookings adjustments
10.0
—
—
10.0
—
Bookings
$
171.5
$
133.6
$
117.2
$
561.2
$
306.5
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
Net income (loss)
$
(67.2
)
$
(41.7
)
$
(53.0
)
$
(104.2
)
$
(429.4
)
Provision for income taxes
42.1
15.6
6.1
96.0
24.0
Other (income) expense, net
10.2
0.6
11.7
11.2
16.5
Interest income
(1.4
)
(1.6
)
(1.3
)
(6.4
)
(11.6
)
Interest expense
15.0
14.8
9.0
59.2
30.3
Depreciation and amortization
67.6
57.7
55.0
237.9
142.1
Acquisition-related transaction
expenses
4.6
15.7
1.1
25.2
12.5
Contingent consideration fair value
adjustment
28.9
21.6
23.5
80.0
359.2
Expenses incurred from vacated
lease(1)
4.6
69.8
—
74.4
—
Stock-based compensation expense
42.2
44.6
37.8
167.2
122.6
Adjusted EBITDA
$
146.6
$
197.1
$
89.9
$
640.5
$
266.2
Reconciliation of GAAP Operating
Expense to Non-GAAP Operating Expense
GAAP operating expense
$
436.6
$
476.2
$
393.1
$
1,729.8
$
1,533.2
Acquisition-related transaction
expenses
(4.6
)
(15.7
)
(1.1
)
(25.2
)
(12.5
)
Contingent consideration fair value
adjustment
(28.9
)
(21.6
)
(23.5
)
(80.0
)
(359.2
)
Expenses incurred from vacated
lease(1)
(4.6
)
(69.8
)
—
(74.4
)
—
Stock-based compensation expense
(41.4
)
(43.8
)
(37.3
)
(164.4
)
(120.6
)
Non-GAAP operating expense
$
357.1
$
325.3
$
331.2
$
1,385.8
$
1,040.9
Reconciliation of Cash Provided by
Operating Activities to Free Cash Flow
Net cash provided by (used in) operating
activities
158.1
98.6
205.9
253.8
429.2
Acquisition of property and equipment
(5.7
)
(2.5
)
(2.7
)
(12.5
)
(18.8
)
Free cash flow
$
152.4
$
96.1
$
203.2
$
241.3
$
410.4
(1)
Amount includes $66.8 million non-cash
impairment charge related to our San Francisco office building and
related leasehold improvements, property and equipment incurred in
August 2021, as well as subsequent rent and other expenses
(including depreciation) associated with the office building
ZYNGA INC.
RECONCILIATION OF GAAP TO
NON-GAAP COSTS AND EXPENSES
(In millions, unaudited)
Three Months Ended December
31, 2021
GAAP Measure
Amortization of intangible assets
from acquisitions
Contingent consideration fair
value adjustment
Acquisition- related expenses
Expenses incurred from vacated
lease
Stock-based compensation
expense
Non-GAAP measure
Cost of revenue
$
260.1
$
(65.7
)
$
—
$
—
$
—
$
(0.8
)
$
193.6
Operating expenses
Research and development
151.9
—
(28.9
)
(1.4
)
—
(27.7
)
93.9
Sales and marketing
245.6
—
—
(0.1
)
—
(4.8
)
240.7
General and administrative
39.1
—
—
(3.1
)
(4.6
)
(8.9
)
22.5
Total operating expenses
436.6
—
(28.9
)
(4.6
)
(4.6
)
(41.4
)
357.1
Total costs and expenses
$
696.7
$
(65.7
)
$
(28.9
)
$
(4.6
)
$
(4.6
)
$
(42.2
)
$
550.7
Three Months Ended December
31, 2020
GAAP Measure
Amortization of intangible assets
from acquisitions
Contingent consideration fair
value adjustment
Acquisition- related expenses
Expenses incurred from vacated
lease
Stock-based compensation
expense
Non-GAAP measure
Cost of revenue
$
250.4
$
(51.3
)
$
—
$
—
$
—
$
(0.5
)
$
198.6
Operating expenses
Research and development
122.0
—
(23.5
)
—
—
(24.8
)
73.7
Sales and marketing
238.5
—
—
—
—
(3.8
)
234.7
General and administrative
32.6
—
—
(1.1
)
—
(8.7
)
22.8
Total operating expenses
393.1
—
(23.5
)
(1.1
)
—
(37.3
)
331.2
Total costs and expenses
$
643.5
$
(51.3
)
$
(23.5
)
$
(1.1
)
$
—
$
(37.8
)
$
529.8
ZYNGA INC.
RECONCILIATION OF GAAP TO
NON-GAAP COSTS AND EXPENSES
(In millions, unaudited)
Twelve Months Ended December
31, 2021
GAAP Measure
Amortization of intangible assets
from acquisitions
Contingent consideration fair
value adjustment
Acquisition- related expenses
Expenses incurred from vacated
lease
Stock-based compensation
expense
Non-GAAP measure
Cost of revenue
$
1,014.9
$
(225.2
)
$
—
$
—
$
—
$
(2.8
)
$
786.9
Operating expenses
Research and development
545.9
—
(80.0
)
(5.5
)
—
(110.7
)
349.7
Sales and marketing
955.1
—
—
(2.9
)
—
(17.8
)
934.4
General and administrative
162.0
—
—
(16.8
)
(7.6
)
(35.9
)
101.7
Impairment related to real estate
assets
66.8
—
—
—
(66.8
)
—
—
Total operating expenses
1,729.8
—
(80.0
)
(25.2
)
(74.4
)
(164.4
)
1,385.8
Total costs and expenses
$
2,744.7
$
(225.2
)
$
(80.0
)
$
(25.2
)
$
(74.4
)
$
(167.2
)
$
2,172.7
Twelve Months Ended December
31, 2020
GAAP Measure
Amortization of intangible assets
from acquisitions
Contingent consideration fair
value adjustment
Acquisition- related expenses
Expenses incurred from vacated
lease
Stock-based compensation
expense
Non-GAAP measure
Cost of revenue
$
811.8
$
(130.0
)
$
—
$
—
$
—
$
(2.0
)
$
679.8
Operating expenses
Research and development
713.7
—
(359.2
)
—
—
(73.4
)
281.1
Sales and marketing
683.5
—
—
—
—
(14.7
)
668.8
General and administrative
136.0
—
—
(12.5
)
—
(32.5
)
91.0
Total operating expenses
1,533.2
—
(359.2
)
(12.5
)
—
(120.6
)
1,040.9
Total costs and expenses
$
2,345.0
$
(130.0
)
$
(359.2
)
$
(12.5
)
$
—
$
(122.6
)
$
1,720.7
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220209005205/en/
Investor Relations: Rebecca Lau Investors@zynga.com
Media Relations: Kenny Johnston Press@zynga.com
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