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Zynga Inc. shares initially jumped 10% in after-hours trading Wednesday following an earnings report that proved, once again, that home-bound Americans are binging on digital games.
The mobile-gaming company reported a second-quarter net loss of $150 million, or 16 cents a share, compared with a loss of $55.8 million, or 6 cents a share, in the year-ago quarter.
Zynga’s ZNGA, -1.17% revenue improved 47% to $452 million from $306.5 million a year ago. Sales included record online game revenue of $388 million, up 61% year-over-year. In a nod to its strong prospects, the company also raised its full-year revenue guidance $110 million to $1.8 billion.
Analysts surveyed by FactSet had expected adjusted a loss of 13 cents a share on sales of $505 million.
With no foreseeable end in sight to shelter-in-place programs, Americans increasingly are turning to gaming as a new form of social media — one in which they can chat and work together to solve a puzzle or adventure game. And that is translating into record levels of engagement, retention and monetization, Zynga executives say.
“If you asked me New Year’s Eve [2019], I did not think it would happen,” Zynga Chief Executive Frank Gibeau told MarketWatch in a phone interview on Wednesday. “But the pandemic changed that. Gaming is very resilient during economic difficulties. It is an awesome way to connect.”
Popular titles “Empires Puzzles,” “Merge Dragons,” “Merge Magic” and “Game of Thrones Slots Casino” were the largest drivers of growth, according to Zynga. The San Francisco-based company also said it is buying developer Rollic and closed its acquisition of Peak, a maker of mobile puzzle games, on July 1.
Zynga’s strong quarter mirrored those of rival Activision Blizzard Inc. ATVI, -2.46% and traditional gaming company Take-Two Interactive Software Inc. TTWO, -0.84% earlier this week. Activision reported second-quarter net income of $580 million, or 75 cents a share, compared with $328 million, or 43 cents a share, in the year-ago period, while Take-Two said revenue soared 54% to a record $831.3 million.
See also: Activision Blizzard results, outlook top Wall Street estimates
Zynga’s shares are up 62% this year. The broader S&P 500 index SPX, +0.64% has improved 3% in 2020.
