Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 15, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | ZNGA | |
Entity Registrant Name | ZYNGA INC | |
Entity Central Index Key | 0001439404 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 001-35375 | |
Entity Tax Identification Number | 421733483 | |
Entity Address, Address Line One | 699 Eighth Street | |
Entity Address, City or Town | San Francisco | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94103 | |
City Area Code | 855 | |
Local Phone Number | 449-9642 | |
Entity Common Stock, Shares Outstanding | 941,634,893 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 691,343 | $ 544,990 |
Short-term investments | 137,265 | 36,232 |
Accounts receivable, net of allowance of $0 at June 30, 2019 and December 31, 2018 | 144,935 | 91,630 |
Restricted cash | 25,006 | 35,006 |
Prepaid expenses | 24,054 | 26,914 |
Assets held for sale | 310,902 | |
Other current assets | 9,992 | 12,505 |
Total current assets | 1,343,497 | 747,277 |
Long-term investments | 2,004 | |
Goodwill | 1,460,896 | 934,187 |
Intangible assets, net | 269,923 | 118,600 |
Property and equipment, net | 18,043 | 266,557 |
Right-of-use assets | 17,249 | |
Restricted cash | 30,000 | |
Prepaid expenses | 28,928 | 30,774 |
Other non-current assets | 13,712 | 49,308 |
Total assets | 3,184,252 | 2,146,703 |
Current liabilities: | ||
Accounts payable | 21,909 | 26,811 |
Income tax payable | 11,155 | 4,895 |
Deferred revenue | 356,932 | 191,299 |
Debt | 100,000 | |
Operating lease liabilities | 9,042 | |
Liabilities related to assets held for sale | 46,279 | |
Other current liabilities | 229,882 | 156,829 |
Total current liabilities | 675,199 | 479,834 |
Convertible senior notes, net | 558,394 | |
Deferred revenue | 944 | 1,586 |
Deferred tax liabilities, net | 21,635 | 16,087 |
Non-current operating lease liabilities | 17,917 | |
Other non-current liabilities | 187,212 | 52,586 |
Total liabilities | 1,461,301 | 550,093 |
Stockholders’ equity: | ||
Common stock (Class A), $0.00000625 par value, and additional paid in capital - authorized shares: 2,020,517; shares outstanding: 940,224 shares as of June 30, 2019 and 861,111 as of December 31, 2018 | 3,846,919 | 3,504,713 |
Accumulated other comprehensive income (loss) | (122,026) | (118,439) |
Accumulated deficit | (2,001,942) | (1,789,664) |
Total stockholders’ equity | 1,722,951 | 1,596,610 |
Total liabilities and stockholders’ equity | $ 3,184,252 | $ 2,146,703 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, allowance | $ 0 | $ 0 |
Common Class A [Member] | ||
Common stock, par value | $ 0.00000625 | $ 0.00000625 |
Common stock, shares authorized | 2,020,517,000 | 2,020,517,000 |
Common stock, shares outstanding | 940,224,000 | 861,111,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenue: | ||||
Total revenue | $ 306,500 | $ 217,045 | $ 571,903 | $ 425,277 |
Costs and expenses: | ||||
Cost of revenue | 126,872 | 74,182 | 248,515 | 143,224 |
Research and development | 102,094 | 67,391 | 263,974 | 128,216 |
Sales and marketing | 113,529 | 52,878 | 215,540 | 103,733 |
General and administrative | 25,239 | 25,580 | 46,743 | 48,833 |
Total costs and expenses | 367,734 | 220,031 | 774,772 | 424,006 |
Income (loss) from operations | (61,234) | (2,986) | (202,869) | 1,271 |
Interest income | 889 | 1,800 | 1,332 | 3,610 |
Interest expense | (2,167) | (9) | (3,430) | (14) |
Other income (expense), net | 3,877 | 2,614 | 7,252 | 6,020 |
Income (loss) before income taxes | (58,635) | 1,419 | (197,715) | 10,887 |
Provision for (benefit from) income taxes | (2,805) | 2,330 | (13,057) | 6,189 |
Net income (loss) | $ (55,830) | $ (911) | $ (184,658) | $ 4,698 |
Net income (loss) per share attributable to common stockholders: | ||||
Basic | $ (0.06) | $ 0 | $ (0.20) | $ 0.01 |
Diluted | $ (0.06) | $ 0 | $ (0.20) | $ 0.01 |
Weighted-average common shares used to compute net income (loss) per share attributable to common stockholders: | ||||
Basic | 937,334 | 858,666 | 931,813 | 864,117 |
Diluted | 937,334 | 858,666 | 931,813 | 890,285 |
Online Game [Member] | ||||
Revenue: | ||||
Total revenue | $ 240,708 | $ 164,680 | $ 440,872 | $ 326,233 |
Advertising and Other [Member] | ||||
Revenue: | ||||
Total revenue | $ 65,792 | $ 52,365 | $ 131,031 | $ 99,044 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement Of Partners Capital [Abstract] | ||||
Net income (loss) | $ (55,830) | $ (911) | $ (184,658) | $ 4,698 |
Other comprehensive income (loss): | ||||
Change in foreign currency translation adjustment | (10,600) | (29,855) | (3,638) | (6,721) |
Net change in unrealized gains (losses) on available-for-sale marketable debt securities, net of tax | 36 | 134 | 51 | 107 |
Other comprehensive income (loss), net of tax | (10,564) | (29,721) | (3,587) | (6,614) |
Comprehensive income (loss) | $ (66,394) | $ (30,632) | $ (188,245) | $ (1,916) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Class A [Member] | Class A,B, and C Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
Beginning balance, Value at Dec. 31, 2017 | $ 1,641,240 | $ 5 | $ 3,426,500 | $ (93,497) | $ (1,691,768) | ||
Beginning balance, Shares at Dec. 31, 2017 | 870,660,000 | ||||||
Exercise of stock options and ESPP | 3,311 | 3,311 | |||||
Exercise of stock options and ESPP, Shares | 1,510,000 | ||||||
Vesting of ZSUs, net of tax withholdings | (6,364) | $ (6,364) | |||||
Vesting of ZSUs, net of tax withholdings, Shares | 2,748,000 | ||||||
Stock-based compensation expense | 14,113 | 14,113 | |||||
Repurchases of common stock, Value | (41,175) | (41,175) | |||||
Repurchases of common stock, Shares | (11,306,000) | ||||||
Retirements of treasury stock | 47,539 | (47,539) | |||||
Adoption of ASU | 2014-09 | 4,024 | 4,024 | |||||
Net income (loss) | 5,609 | 5,609 | |||||
Other comprehensive income (loss) | 23,107 | 23,107 | |||||
Ending balance, Value at Mar. 31, 2018 | 1,643,865 | $ 5 | 3,443,924 | (70,390) | (1,729,674) | ||
Ending balance, Shares at Mar. 31, 2018 | 863,612,000 | ||||||
Beginning balance, Value at Dec. 31, 2017 | 1,641,240 | $ 5 | 3,426,500 | (93,497) | (1,691,768) | ||
Beginning balance, Shares at Dec. 31, 2017 | 870,660,000 | ||||||
Net income (loss) | 4,698 | $ 4,698 | |||||
Other comprehensive income (loss) | (6,614) | ||||||
Ending balance, Value at Jun. 30, 2018 | 1,599,594 | $ 5 | 3,462,137 | (100,111) | (1,762,437) | ||
Ending balance, Shares at Jun. 30, 2018 | 860,181,000 | ||||||
Beginning balance, Value at Dec. 31, 2017 | 1,641,240 | $ 5 | 3,426,500 | (93,497) | (1,691,768) | ||
Beginning balance, Shares at Dec. 31, 2017 | 870,660,000 | ||||||
Ending balance, Value at Dec. 31, 2018 | 1,596,610 | $ 5 | 3,504,708 | (118,439) | (1,789,664) | ||
Ending balance, Shares at Dec. 31, 2018 | 861,111,000 | ||||||
Beginning balance, Value at Mar. 31, 2018 | 1,643,865 | $ 5 | 3,443,924 | (70,390) | (1,729,674) | ||
Beginning balance, Shares at Mar. 31, 2018 | 863,612,000 | ||||||
Exercise of stock options and ESPP | 844 | 844 | |||||
Exercise of stock options and ESPP, Shares | 458,000 | ||||||
Vesting of ZSUs, net of tax withholdings | (7,609) | (7,609) | |||||
Vesting of ZSUs, net of tax withholdings, Shares | 3,013,000 | ||||||
Stock-based compensation expense | 17,369 | 17,369 | |||||
Repurchases of common stock, Value | (24,243) | (24,243) | |||||
Repurchases of common stock, Shares | (6,902,000) | ||||||
Retirements of treasury stock | 31,852 | (31,852) | |||||
Net income (loss) | (911) | $ (911) | (911) | ||||
Other comprehensive income (loss) | (29,721) | (29,721) | |||||
Ending balance, Value at Jun. 30, 2018 | 1,599,594 | $ 5 | 3,462,137 | (100,111) | (1,762,437) | ||
Ending balance, Shares at Jun. 30, 2018 | 860,181,000 | ||||||
Beginning balance, Value at Dec. 31, 2018 | 1,596,610 | $ 5 | 3,504,708 | (118,439) | (1,789,664) | ||
Beginning balance, Shares at Dec. 31, 2018 | 861,111,000 | ||||||
Exercise of stock options and ESPP | 5,304 | 5,304 | |||||
Exercise of stock options and ESPP, Shares | 5,097,000 | ||||||
Vesting of ZSUs, net of tax withholdings | (11,010) | (11,010) | |||||
Vesting of ZSUs, net of tax withholdings, Shares | 2,487,000 | ||||||
Acquisition-related common stock issuance | 253,903 | $ 1 | 253,902 | ||||
Acquisition-related common stock issuance, Shares | 63,795,000 | ||||||
Stock-based compensation expense | 18,773 | 18,773 | |||||
Retirements of treasury stock | 11,010 | (11,010) | |||||
Net income (loss) | (128,828) | (128,828) | |||||
Other comprehensive income (loss) | 6,977 | 6,977 | |||||
Ending balance, Value at Mar. 31, 2019 | 1,741,729 | $ 6 | 3,782,687 | (111,462) | (1,929,502) | ||
Ending balance, Shares at Mar. 31, 2019 | 932,490,000 | ||||||
Beginning balance, Value at Dec. 31, 2018 | 1,596,610 | $ 5 | 3,504,708 | (118,439) | (1,789,664) | ||
Beginning balance, Shares at Dec. 31, 2018 | 861,111,000 | ||||||
Net income (loss) | (184,658) | $ (184,658) | |||||
Other comprehensive income (loss) | (3,587) | (3,587) | |||||
Ending balance, Value at Jun. 30, 2019 | 1,722,951 | $ 6 | 3,846,913 | (122,026) | (2,001,942) | ||
Ending balance, Shares at Jun. 30, 2019 | 940,224,000 | ||||||
Beginning balance, Value at Mar. 31, 2019 | 1,741,729 | $ 6 | 3,782,687 | (111,462) | (1,929,502) | ||
Beginning balance, Shares at Mar. 31, 2019 | 932,490,000 | ||||||
Exercise of stock options and ESPP | 1,727 | 1,727 | |||||
Exercise of stock options and ESPP, Shares | 3,885,000 | ||||||
Vesting of ZSUs, net of tax withholdings | (16,610) | (16,610) | |||||
Vesting of ZSUs, net of tax withholdings, Shares | 3,849,000 | ||||||
Stock-based compensation expense | 21,355 | 21,355 | |||||
Retirements of treasury stock | $ 16,610 | (16,610) | |||||
Equity component of convertible senior notes | 114,974 | 114,974 | |||||
Purchase of capped calls related to issuance of convertible seniornotes | (73,830) | (73,830) | |||||
Net income (loss) | (55,830) | $ (55,830) | (55,830) | ||||
Other comprehensive income (loss) | (10,564) | (10,564) | |||||
Ending balance, Value at Jun. 30, 2019 | $ 1,722,951 | $ 6 | $ 3,846,913 | $ (122,026) | $ (2,001,942) | ||
Ending balance, Shares at Jun. 30, 2019 | 940,224,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (184,658) | $ 4,698 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 40,749 | 16,909 |
Stock-based compensation expense | 40,128 | 31,482 |
(Gain) loss from foreign currency, sales of investments, assets and other, net | (385) | 1,491 |
(Accretion) and amortization on marketable debt securities, net | (385) | (1,300) |
Noncash lease expense | 3,161 | |
Noncash interest expense | 1,008 | |
Change in deferred income taxes and other | (34,031) | 1,273 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (26,510) | 14,009 |
Prepaid expenses and other assets | 7,160 | (7,223) |
Accounts payable | (7,288) | (16,261) |
Deferred revenue | 155,989 | 28,126 |
Income tax payable | 60 | (5,042) |
Operating lease and other liabilities | 105,166 | (30,974) |
Net cash provided by (used in) operating activities | 100,164 | 37,188 |
Cash flows from investing activities: | ||
Purchases of investments | (124,091) | (184,089) |
Maturities of investments | 16,500 | 302,000 |
Sales of investments | 4,987 | 9,999 |
Acquisition of property and equipment | (9,958) | (3,679) |
Proceeds from sale of property and equipment | 90 | 28 |
Business acquisitions, net of cash acquired and restricted cash held in escrow | (299,357) | (222,075) |
Release of restricted cash escrow from business combinations | (10,000) | (22,800) |
Other investing activities, net | 97 | |
Net cash provided by (used in) investing activities | (421,829) | (120,519) |
Cash flows from financing activities: | ||
Proceeds from issuance of debt, net | 672,682 | |
Purchase of capped calls | (73,830) | |
Taxes paid related to net share settlement of stockholders' equity awards | (27,620) | (13,972) |
Repurchases of common stock | (65,418) | |
Proceeds from issuance of common stock | 7,031 | 4,158 |
Repayment of debt | (101,364) | |
Other financing activities, net | (327) | |
Net cash provided by (used in) financing activities | 476,572 | (75,232) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 11,446 | (1,931) |
Net change in cash, cash equivalents and restricted cash | 166,353 | (160,494) |
Cash, cash equivalents and restricted cash, beginning of period | 579,996 | 405,677 |
Cash, cash equivalents and restricted cash, end of period | 746,349 | $ 245,183 |
Noncash investing activity: | ||
Acquisition-related common stock issuance | $ 253,903 |
Overview and Summary of Signifi
Overview and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Overview and Summary of Significant Accounting Policies | 1. Overview and Summary of Significant Accounting Policies Organization and Description of Business Zynga Inc. (“Zynga,” “we” or the “Company”) is a leading provider of social game services. We develop, market and operate social games as live services played on mobile platforms, such as iOS and Android, and social networking sites such as Facebook. Generally, all of our games are free to play, and we generate substantially all of our revenue through the sale of in-game virtual items and advertising services. Our operations are headquartered in San Francisco, California, and we have several operating locations in the U.S. as well as various international office locations in North America, Asia and Europe. We completed our initial public offering in December 2011 and our Class A common stock is listed on the NASDAQ Global Select Market under the symbol “ZNGA.” Basis of Presentation and Consolidation The accompanying interim consolidated financial statements are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The interim consolidated financial statements include the operations of the Company and its owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation. The accompanying interim consolidated financial statements and these related notes should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018. Unaudited Interim Financial Information The accompanying interim consolidated balance sheets as of June 30, 2019 and December 31, 2018, the interim consolidated statements of operations, statements of comprehensive income (loss) and statements of stockholders’ equity for the three and six months ended June 30, 2019 and 2018, the statements of cash flows for the six months ended June 30, 2019 and 2018 and the notes to interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position and operating results for the periods presented. The results for the three and six months ended June 30, 2019 are not necessarily indicative of the results expected for the full fiscal year or any other future period. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the interim consolidated financial statements and notes thereto. Significant estimates and assumptions reflected in the financial statements include, but are not limited to, the estimated average playing period of payers that we use for revenue recognition, useful lives of property and equipment and intangible assets, accrued liabilities, income taxes, the fair value of assets and liabilities acquired through business combinations, contingent consideration obligations, the discount rate used in discounting our operating lease liabilities, the interest rate used in present valuing the initial liability component of our convertible notes, stock-based compensation expense and evaluation of recoverability of goodwill, intangible assets, and long-lived assets. Actual results could differ materially from those estimates. For the three and six months ended June 30, 2019, there was no significant impact from discontinued games or from changes in our estimated average playing period of payers that required adjusting the recognition period of deferred revenue generated in prior periods. For the three and six months ended June 30, 2018, we recognized $0.5 million and $0.9 million, respectively, of online game revenue and income from operations from games that have been discontinued as there is no further performance obligation. This change in estimate did not impact our reported earnings per share in three months ended June 30, 2018 but had a $0.01 per share impact on our reported earnings per share in the six months ended June 30, 2018. For the three and six months ended June 30, 2018, there were no changes in our estimated average playing period of payers that required adjusting the recognition period of deferred revenue generated in prior periods. Recent Accounting Pronouncements Issued But Not Yet Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” ASC Topic 350-40, Internal-Use Software Issued And Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” “Leases (Topic 842) – Targeted Improvements” Adoption Impact – Lessee Accounting The adoption of ASC Topic 842 on January 1, 2019 resulted in the recognition of right-of-use assets of $9.1 million, which includes the elimination of our remaining prepaid rent and deferred rent balances, current operating lease liabilities of $7.6 million and non-current operating lease liabilities of $12.4 million. The adoption of ASC Topic 842 did not impact our consolidated statement of operations or consolidated statement of cash flows. ASC Topic 842 also amends the provisions of ASC Topic 420 – Exit or Disposal Obligations ASC 360 – Property, Plant, and Equipment As part of the adoption, the new standard allows a number of practical expedients and exemptions. At transition, we elected the following: • The package of practical expedients, which allows us to carryforward our historical lease classification, assessment of whether a contract is or contains a lease and initial direct costs for any leases that exist prior to adoption of the new standard; • The practical expedient to not separate non-lease components from the related lease components; and • The exemption to not apply the balance sheet recognition requirements for leases with a lease term of 12 months or less and instead, expense those costs on a straight-line basis over the lease term, or in the period in which the obligation is incurred, if such costs are variable. Adoption Impact – Lessor Accounting There was no impact to our financial statements as a result of adopting ASC Topic 842. ASU 2018-11, “Leases (Topic 842) – Targeted Improvements” Refer to Note 6 – “Leases” for further details on our lease arrangements as a lessee and lessor. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 6 Months Ended |
Jun. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Revenue from Contracts with Customers | 2. Revenue from Contracts with Customers Disaggregation of Revenue The following table presents our revenue disaggregated by platform (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Online game: Mobile $ 223,779 $ 143,026 $ 406,612 $ 282,856 Other (1) 16,929 21,654 34,260 43,377 Online game total $ 240,708 $ 164,680 $ 440,872 $ 326,233 Advertising and other: Mobile 63,663 49,718 126,923 92,489 Other (1) 2,129 2,647 4,108 6,555 Advertising and other total $ 65,792 $ 52,365 $ 131,031 $ 99,044 Total revenue $ 306,500 $ 217,045 $ 571,903 $ 425,277 (1) Includes web for Online Game and web advertising revenue and other revenue for Advertising and Other The following table presents our revenue disaggregated based on the geographic location of our payers (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 United States $ 194,309 $ 142,541 $ 366,260 $ 278,537 All other countries (1) 112,191 74,504 205,643 146,740 Total revenue $ 306,500 $ 217,045 $ 571,903 $ 425,277 (1) No foreign country exceeded 10% of our total revenue for any periods presented. Durable virtual items accounted for 72% of online game revenue in the three months ended June 30, 2019 and 53% of online game revenue in the same period of the prior year. Consumable virtual items accounted for 28% of online game revenue in the three months ended June 30, 2019 and 47% of online game revenue in the same period of the prior year. The estimated weighted-average life of durable virtual items was 10 months in the three months ended June 30, 2019, compared to 9 months in the same period of the prior year. Durable virtual items accounted for 69% of online game revenue in the six months ended June 30, 2019 and 54% of online game revenue in the same period of the prior year. Consumable virtual items accounted for 31% of online game revenue in the six months ended June 30, 2019 and 46% of online game revenue in the same period of the prior year. The estimated weighted average life of durable virtual items was 9 months Contract Balances We receive payments from our customers based on the payment terms established in our contracts. Payments for online game revenue are required at time of purchase, are non-refundable and relate to non-cancellable contracts that specify our performance obligations. Such payments are initially recorded to deferred revenue and are recognized into revenue as we satisfy our performance obligations. Further, payments made by our players are collected by payment processors and remitted to us generally within 30 days. Our right to the payments collected on our behalf are unconditional and therefore recorded as accounts receivable, net of the associated payment processing fees. Payments for advertising arrangements are due based on the contractually stated payment terms. The contract terms generally require payment within 30 to 60 days subsequent to the end of the month. Our right to payment from the customer is unconditional and therefore recorded as accounts receivable. During the three and six months ended June 30, 2019, we recognized $58.5 million and $168.0 million, respectively, of revenue that was included in the current deferred revenue balance on December 31, 2018. The increase in accounts receivable, net during the six months ended June 30, 2019 was primarily driven by a net increase in accounts receivable of $23.0 million on the acquisition date of Small Giant Games Oy (“Small Giant”) and sales on account during the period exceeding cash collections of current period and previously due amounts. The increase in deferred revenue during the six months ended June 30, 2019 was primarily driven by the sale of virtual items during the period exceeding revenue recognized from the satisfaction of our performance obligations, which includes the contribution from Small Giant. Unsatisfied Performance Obligations Substantially all of our unsatisfied performance obligations relate to contracts with an original expected length of one year or less. |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jun. 30, 2019 | |
Cash And Cash Equivalents [Abstract] | |
Marketable Securities | 3. Marketable Securities The following tables summarize the amortized cost, gross unrealized gains and losses and fair value of our short-term and long-term investments as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 Gross Gross Amortized Unrealized Unrealized Aggregate Cost Gains Losses Fair Value Short-term investments: Corporate debt securities $ 134,219 $ 43 $ — $ 134,262 U.S. government and government agency debt securities 3,000 3 — 3,003 Total $ 137,219 $ 46 $ — $ 137,265 Long-term investments: Corporate debt securities $ 1,997 $ 7 $ 2,004 Total $ 1,997 $ 7 $ — $ 2,004 December 31, 2018 Gross Gross Amortized Unrealized Unrealized Aggregate Cost Gains Losses Fair Value Short-term investments: Corporate debt securities $ 36,230 $ 2 $ — $ 36,232 Total $ 36,230 $ 2 $ — $ 36,232 As of June 30, 2019, all of our short-term investments have contractual maturities of one year or less and all of our long-term investments have contractual maturities between one and two years. As of June 30, 2019, we did not consider any of our short-term or long-term investments to be other-than-temporarily impaired. We do not intend to sell, nor do we believe it is more likely than not that we will be required to sell, any of the securities in an unrealized loss position. When evaluating our investments for other-than-temporary impairment, we review factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer, our ability and intent to hold the security to maturity and whether it is more likely than not that we will be required to sell the investment before recovery of the amortized cost basis. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements Our financial assets consist of cash equivalents, short-term and long-term investments, accounts receivable, net, and leasehold receivables. Cash equivalents, short-term investments and long-term investments, which consist of money market funds, corporate debt securities and U.S. government and government agency debt securities, are reported at fair value. Accounts receivable, net and leasehold receivables are stated at the net realizable amount, which approximates fair value. Our financial liabilities consist of accounts payable and accrued liabilities, which are stated at the invoiced or estimated payout amount, respectively, and approximate fair value, contingent consideration obligations as a result of business acquisitions, which are reported at fair value, lease liabilities, which approximate fair value and our debt; see Note 10 – “Debt” for further discussion on the fair value of our debt. As of June 30, 2019 , our contingent consideration obligations represent the estimated fair value of the additional consideration payable in connection with our acquisitions of Gram Games in the second quarter of 2018 and Small Giant in the first quarter of 2019. Under the terms of the Gram Games acquisition, contingent consideration may be payable based on the achievement of certain future profitability performance targets during each annual period following the acquisition date for a total of three years, with no maximum limit as to the contingent consideration achievable. We estimated the acquisition date and subsequent reporting period fair values of the contingent consideration obligation using a Monte Carlo simulation. The significant unobservable inputs used in the fair value measurement of the contingent consideration obligation were Gram Games’ projected performance, a risk-adjusted discount rate and performance volatility similar to industry peers. Changes to projected performance of the acquired business could result in a higher or lower contingent consideration obligation in the future. As of December 31, 2018, the estimated fair value of the Gram Games contingent consideration obligation was $49.0 million and as of June 30, 2019, the estimated fair value of the contingent consideration obligation increased to $72.8 million, primarily due to stronger than expected performance and the increased probability of achievement. For six months ended June 30, 2019, we recognized $23.8 million of expense within research and development expenses in our consolidated statement of operations. For the three months ended June 30, 2019, we recognized a $2.7 million benefit within research and development expenses in our consolidated statement of operations, driven by continued refinement of forecasted financial results. Under the terms of the Small Giant acquisition, contingent consideration may be payable based on the achievement of certain future profitability performance targets during each annual period following the acquisition date for a total of three years, with no maximum limit as to the contingent consideration achievable. We estimated the acquisition date and subsequent reporting period fair values of the contingent consideration obligation using a Monte Carlo simulation. The significant unobservable inputs used in the fair value measurement of the contingent consideration obligation were Small Giant’s projected performance, a risk-adjusted discount rate and performance volatility similar to industry peers. Changes to projected performance of the acquired business could result in a higher or lower contingent consideration obligation in the future. At acquisition, the estimated fair value of the contingent consideration obligation was $98.0 million. As of June 30, 2019, the estimated fair value of the contingent consideration obligation increased to $183.6 million, primarily due to stronger than expected performance and the increased probability of achievement. Accordingly, for the three and six months ended June 30, 2019, we recognized $26.6 million and $85.6 million, respectively, of expense within research and development expenses in our consolidated statement of operations. We estimate fair value as the exit price, which represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between knowledgeable and willing market participants. The valuation techniques used to measure the fair value of the Company’s financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data. We use a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Includes inputs, other than Level 1 inputs, that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs that are supported by little or no market activity. The composition of our financial assets and liabilities as of June 30, 2019 and December 31, 2018 among the three levels of the fair value hierarchy are as follows (in thousands): June 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 190,094 $ — $ — $ 190,094 Corporate debt securities — 228,388 — 228,388 Short-term investments: Corporate debt securities — 134,262 — 134,262 U.S. government and government agency debt securities — 3,003 — 3,003 Long-term investments: Corporate debt securities — 2,004 — 2,004 Total financial assets $ 190,094 $ 367,657 $ — $ 557,751 Liabilities: Contingent consideration $ — $ — $ 256,400 $ 256,400 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 565 $ — $ — $ 565 Corporate debt securities — 4,987 — 4,987 Short-term investments: Corporate debt securities — 36,232 — 36,232 Total financial assets $ 565 $ 41,219 $ — $ 41,784 Liabilities: Contingent consideration $ — $ — $ 49,000 $ 49,000 The following table presents the activity for the six months ended June 30, 2019 related to our Level 3 liabilities (in thousands): Level 3 Liabilities: Total Contingent consideration obligation – December 31, 2018 $ 49,000 Additions 98,000 Fair value adjustments 109,400 Contingent consideration obligation – June 30, 2019 $ 256,400 We had no transfers between valuation levels from December 31, 2018 to June 30, 2019. |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net consist of the following (in thousands): June 30, December 31, 2019 2018 Computer equipment $ 22,451 $ 20,624 Software 35,224 34,937 Land — 89,130 Building and building improvements — 203,873 Furniture and fixtures 11,203 10,321 Leasehold improvements 11,361 6,144 Total property and equipment, gross $ 80,239 $ 365,029 Less: Accumulated depreciation (62,196 ) (98,472 ) Total property and equipment, net $ 18,043 $ 266,557 The following represents our property and equipment, net by location (in thousands): June 30, December 31, 2019 2018 United States $ 9,066 $ 262,844 All other countries 8,977 3,713 Total property and equipment, net $ 18,043 $ 266,557 On May 24, 2019, the Company entered into an agreement (the “Sale Agreement”) to sell the Company’s San Francisco headquarters (the “Building”) and related land, including all preexisting leases between the Company and third-party tenants of the Building, to a third-party buyer for net proceeds of approximately $600 million, subject to customary closing conditions and deliveries. On July 1, 2019, as discussed further in Note 16 – “Subsequent Events”, the Sale Agreement closed consistent with these terms. In connection with entering into the Sale Agreement, the Company determined the following assets and related liabilities (the disposal group) qualified as held for sale and accordingly the disposal group was presented as Assets Held for Sale and Liabilitie s Related to Assets Held for Sale in the consolidated balance sheet as of June 30, 2019. The Assets Held for Sale and Liabilities Related to Assets Held for Sale consist of the following (in thousands): June 30, 2019 Assets Held for Sale: Property and equipment, net: Land $ 89,130 Building and building improvements 162,530 Other lessor related assets 59,242 Total assets held for sale $ 310,902 Liabilities Related to Assets Held for Sale: Tenant improvement obligations and other lessor related liabilities $ 46,279 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | 6. Leases Lessee Arrangements We determine if an arrangement is a lease at contract inception. If there is an identified asset in the contract (either explicitly or implicitly) and we have control over its use, the contract is (or contains) a lease. In determining if there is an identified asset, we apply judgment in assessing whether the supplier has a substantive substitution right based on the supplier’s practical ability to substitute the asset and the economic benefit to do so. If it is determined that a substantive substitution right exists, the contract is not a lease and is not accounted for under ASC Topic 842. With the respect to the servers utilized in certain of our hosting and data storage arrangements, the Company determined that a substantive substitution right existed given the location of the servers at the supplier’s premises, a lack of contractual restrictions preventing the supplier from substituting the servers throughout the period of use and the economic incentive for the supplier to substitute the servers as needed in order to efficiently handle varying levels of demand from its various customers. Our operating leases are primarily for office facilities. Certain leases include options to extend the lease for a set number of years or early terminate the lease prior to the contractually defined expiration date. We include such extension periods in the lease term when it is reasonably certain that they will be exercised and include such periods beyond the early termination date when it is reasonably certain the early terminations will not be exercised. As of June 30, 2019, the weighted-average remaining lease term for our operating leases was 3.4 years. We record right-of-use assets, current operating lease liabilities and noncurrent operating lease liabilities in our consolidated balance sheet for operating leases with lease terms greater than 12 months. We have elected not to apply the balance sheet recognition requirements to leases with lease terms of 12 months or less (“short-term leases”). Additionally, we do not separate lease components from non-lease components and therefore allocate the entire consideration to the lease component(s). Right-of-use assets represent our right to use an underlying asset during the lease term and operating lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and operating lease liabilities are recognized at the lease commencement date based on the present value of the total required fixed payments over the lease term, with the right-of-use assets further adjusted for any payments made prior to lease commencement, lease incentives received and/or initial direct costs incurred. Certain lease arrangements also include variable payments for costs such as common-area maintenance, utilities, taxes or other operating costs, which are based on a percentage of actual expenses incurred or a fluctuating rate which is unknown at the inception of the contract. These variable lease payments are excluded from the measurement of the lease liability. In determining the present value of lease payments, we discount future lease payments using our incremental borrowing rate since the implicit rate in our various leases is unknown. The incremental borrowing rate is determined at lease commencement for each individual lease and is based on a number of factors, including relevant observable debt transactions, the current economic environment, lease term and currency in which the lease is denominated. As of June 30, 2019, the weighted-average incremental borrowing rate for our operating leases was 5.4%. We recognize lease expense for operating leases and sh ort-term leases on a straight-line basis over the lease term. Variable lease payments are recognized when the underlying uncertainty is resolved, which is generally when the obligation for those costs are incurred. These expenses are presented as operating expenses in the consolidated statement of operations. For the three and six months ended June 30, 2019 , the components of lease expense were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2019 Operating lease expense $ 2,086 $ 3,864 Variable lease expense 620 1,143 Total lease expense (1) $ 2,706 $ 5,007 (1) The expense associated with short-term leases with a lease term of greater than one month were not material for the three and six months ended June 30, 2019. For the three and six months ended June 30, 2019, supplemental cash and noncash information related to operating leases, excluding any transition adjustments, was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2019 Fixed operating lease payments: $ 2,481 $ 4,718 Right-of-use assets obtained in exchange for operating lease liabilities (noncash): $ 114 $ 11,180 As of June 30, 2019, future lease payments related to our operating leases were as follows (in thousands): Year ending December 31: Operating Leases Remaining 2019 $ 5,258 2020 9,617 2021 7,824 2022 3,868 2023 2,917 2024 179 Thereafter — Total lease payments 29,663 Less: Imputed interest (2,704 ) Total lease liability balance $ 26,959 We do not have any leases that have not yet commenced that create significant rights and obligations as of June 30, 2019. During the third quarter of 2018, we executed an assignment of our Oxford office lease associated with our fourth quarter 2017 restructuring plan. The original lease term ends in November 2022, with a lessee option to early terminate in November 2019. All terms under the original lease were assigned in full to the assignee, with the assignee becoming primarily liable to make rental payments directly to the landlord. Further, the assignee was required to provide the landlord a security deposit equal to twelve months rent to be used by the landlord in the event of the assignee’s non-performance. In connection with the assignment, the Company became secondarily liable in the event the assignee is unable to perform under the lease. Based on the current rent and related payments, the maximum exposure to the Company is estimated to be $1.9 million as of June 30, 2019. However, the lease is subject to periodic rate reviews which allow the landlord to make market adjustments to the rent and other related payments and accordingly, the maximum exposure may be greater than this amount. As of June 30, 2019, the estimated fair value of this guarantee is not material. Lessor Arrangements We own the building where our San Francisco headquarters is located and have operating lease arrangements with tenants for the remaining available office space. However, in connection the Sale Agreement, effective July 1, 2019, the Company sold all preexisting leases between the Company and its tenants to the buyer (refer to Note 5 – “Property and Equipment, Net” and Note 16 – “Subsequent Events” for further discussion). As a result, all lessor related assets and liabilities will be de-recognized or transferred upon the closing on July 1, 2019. One tenant currently occupies a portion of the building and will eventually occupy approximately 43 % of the building, with the lease term concluding in February 2027 . The tenant also has two options to extend the lease term for a period of five years each. The original agreement provides for total lease payments of $ 167.3 million, including escalating lease payments and various lease incentives that are recognized on a straight-line basis over the lease term. In February 2019, the original agreement was amended to provide additional space to the tenant, resulting in an add itional $ 5.1 million of lease payments to be received over the lease term and an additional $ 0.8 million of lease incentives for tenant improvements. As of June 30, 2019 , we have a lease incentive obligation of $ 43.7 million related to tenant imp rovements under this lease which is classified as Liabilities Related to Assets Held for Sale in our consolidated balance sheet. In October 2018, we entered into a lease agreement to provide approximately 17% of our San Francisco headquarters to another tenant which commenced in May 2019 and has a lease term concluding in September 2031. The tenant has an option to extend the lease term for an additional five years. The agreement provides for total lease payments of $144.9 million with escalating lease payments and various lease incentives, including a tenant improvement allowances. As of June 30, 2019 we have a lease incentive obligation of $2.4 million related to tenant improvements under this lease which is classified as Liabilities Related to Assets Held for Sale in our consolidated balance sheet. We have operating lease arrangements with other tenants within our owned corporate headquarters, however, the lease payments are not material to the consolidated financial statements. We do not separate lease components from non-lease components and therefore allocate the entire consideration in our contracts to the lease components. All of the lease and non-lease components qualify for accounting under ASC Topic 842. We recognize lease income, net of the lease incentives, within other income (expense), net in the consolidated statement of operations. Variable payments for non-lease components generally include the tenants’ share of the building’s operating expenses, such as common-area maintenance and utilities, which are based on the tenant’s percentage share of total building expenses incurred or a fluctuating rate which is unknown at the inception of the contract. Variable costs are recognized as lease income in the period in which the underlying services are provided. Further, variable payments for the tenant’s share of building related taxes, which are based on a percentage of total building square footage occupied, are recognized as lease income in the period in which the taxes are incurred. For the three and six months ended June 30, 2019, the components of lease income were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2019 Operating lease income $ 5,942 $ 10,563 Variable lease income 606 1,103 Total lease income $ 6,548 $ 11,666 As of June 30, 2019, prior to the sale of the Building, cash to be received from future operating lease payments is expected to be as follows (in thousands): Year ending December 31: Operating Leases Remaining 2019 $ 9,599 2020 25,909 2021 31,502 2022 32,447 2023 33,421 2024 34,423 Thereafter 136,372 Total lease payments $ 303,673 |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | 7. Acquisitions Small Giant Acquisition On January 2, 2019, we acquired 80% of all issued and outstanding share capital (including all rights to acquire share capital) of Small Giant, a Finnish Company, to expand our live service portfolio and new game pipeline, for total purchase consideration of $715.5 million. The remaining 20% will be acquired ratably for potential additional cash consideration payable annually based upon the achievement of specified profitability metrics by Small Giant during each of the three years following the closing. The equity rights and privileges of the remaining Small Giant shareholders lack the traditional rights and privileges associated with equity ownership and accordingly, the transaction is accounted for as if the Company acquired 100% of Small Giant on the acquisition date. The future payments associated with Zynga’s acquisition of the remaining 20% represent a contingent consideration obligation. The total purchase consideration included $333.6 million in cash, $30.0 million of cash that was deposited into an escrow account for a period of 18 months as security for general representations and warranties, 63,794,746 shares of our Class A common stock valued at $253.9 million at the acquisition date and contingent consideration of $98.0 million at the acquisition date. We will record changes in the fair value of the contingent consideration within our consolidated statement of operations in each future reporting period as they occur (see Note 4 – “Fair Value Measurements” for further discussion on this estimate). Additionally, in connection with the transaction, the Company executed noncompetition agreements with the management of Small Giant for a term of three years following the acquisition date. However, the acquisition date estimated fair value of the noncompetition agreements was not material. The following table summarizes the acquisition date fair value of the tangible assets, intangible assets, liabilities assumed, contingent consideration payable and related goodwill acquired from Small Giant (in thousands): Total Cash $ 34,193 Accounts receivable, net 22,974 Prepaid expenses 2,561 Intangible assets, net: Developed technology, useful life of 5 years 155,000 Trade names, useful life of 7 years 32,000 Goodwill 529,290 Property and equipment, net 180 Right-of-use assets 883 Other non-current assets 120 Total assets acquired 777,201 Accounts payable (1,716 ) Income tax payable (5,623 ) Operating lease liabilities (380 ) Other current liabilities (16,126 ) Deferred tax liabilities, net (37,400 ) Non-current operating lease liabilities (503 ) Total liabilities (61,748 ) Total purchase price consideration $ 715,453 Fair value of Zynga Stock Consideration (1) (253,903 ) Non-current contingent consideration payable (98,000 ) Total cash consideration $ 363,550 (1) The fair value of our intangible assets, net was determined using a risk-adjusted, discounted cash flow model. Certain amounts noted above are preliminary and subject to change during the respective measurement period (up to one year from the acquisition date) as we obtain additional information for the preliminary fair value estimates of the assets acquired and liabilities assumed. The primary preliminary estimates that are not yet finalized relate to certain tangible assets and liabilities assumed, identifiable intangible assets, income and non-income based taxes and residual goodwill. Goodwill, which is non-deductible for tax purposes, represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired and is primarily attributable to the assembled workforce of the acquired business and expected synergies at the time of the acquisition. The weighted-average amortization period of the acquired intangible assets was 5.3 years at acquisition. The results of operations from Small Giant have been included in our consolidated statement of operations since the date of acquisition. During the three and six months ended June 30, 2019, Small Giant represented $37.0 million and $49.9 million of our total revenue, respectively, and $27.9 million and $70.8 million of our total net loss, respectively. Transaction costs incurred by the Company in connection with the Small Giant acquisition, including transfer taxes and professional fees, were $0.2 million and $7.6 million for the three and six months ended June 30, 2019, respectively, and were recorded within general and administrative expenses in our consolidated statements of operations. The following table summarizes the pro forma consolidated information of the Company assuming the acquisition of Small Giant had occurred as of January 1, 2018. The unaudited pro forma information for all periods presented includes the business combination accounting effects resulting from the acquisition, including amortization for intangible assets acquired, depreciation expense for tangible assets acquired, and recognition of tax benefits primarily related to the amortization of the intangible asset deferred tax liability. The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2018. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Total revenue $ 306,500 $ 238,554 $ 571,903 $ 459,802 Net loss $ (55,598 ) $ (16,740 ) $ (177,462 ) $ (32,254 ) Basic and diluted earnings per share $ (0.06 ) $ (0.02 ) $ (0.19 ) $ (0.03 ) The significant nonrecurring adjustments reflected in the pro forma consolidated information above include the reclassification of the transactions costs and the related income tax impacts incurred after the acquisition to the earliest period presented. Further, the pro forma consolidated net loss for the three and six months ended June 30, 2019 include the $26.6 million and $85.6 million of expense, respectively, recorded to Zynga’s consolidated statement of operations related to the increase in the estimated fair value of the Small Giant contingent consideration payable. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, Net | 8. Goodwill and Intangible Assets, net The following table presents the changes to goodwill for the six months ended June 30, 2019 (in thousands): Goodwill – December 31, 2018 (1) $ 934,187 Additions 529,290 Foreign currency translation adjustments (2) (2,581 ) Goodwill – June 30, 2019 (1) $ 1,460,896 (1) (2) The details of our acquisition-related intangible assets as of June 30, 2019 and December 31, 2018 are as follows (in thousands): June 30, 2019 Gross Carrying Value Accumulated Amortization Net Book Value Developed technology $ 417,739 $ (197,675 ) $ 220,064 Trademarks, branding and domain names 64,558 (15,199 ) 49,359 Noncompetition agreements 8,390 (7,890 ) 500 Total $ 490,687 $ (220,764 ) $ 269,923 December 31, 2018 Gross Value Accumulated Amortization Net Book Developed technology $ 263,720 $ (167,664 ) $ 96,056 Trademarks, branding and domain names 32,772 (11,702 ) 21,070 Noncompetition agreements 8,390 (7,107 ) 1,283 Acquired lease intangibles 5,708 (5,517 ) 191 Total $ 310,590 $ (191,990 ) $ 118,600 Our trademarks, branding and domain names intangible assets include $6.1 million of indefinite-lived intangible assets as of June 30, 2019 and December 31, 2018. The remaining assets were, and continue to be, amortized on a straight-line basis. Amortization expense related to intangible assets was $16.5 million and $34.1 million for the three and six months ended June 30, 2019, respectively. Comparatively, amortization expense related to intangible assets was $6.0 million and $10.6 million for the three and six months ended June 30, 2018, respectively. As of June 30, 2019, the weighted-average remaining useful lives of our acquired intangible assets are 4.0 years for developed technology, 6.3 years for trademarks, branding and domain names, 1.5 years for noncompetition agreements and 4.4 years in total, for all acquired intangible assets. As of June 30, 2019, future amortization expense related to our intangible assets is expected to be recognized as shown below (in thousands): Year ending December 31: Remaining 2019 $ 33,330 2020 66,449 2021 58,921 2022 51,701 2023 41,202 2024 6,826 Thereafter 5,374 Total $ 263,803 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes On a consolidated basis, the benefit from income taxes was $2.8 million during the three months ended June 30, 2019 and the provision for income taxes was $2.3 million during the three months ended June 30, 2018, resulting in a net change of $5.1 million. Further, the benefit from income taxes was $13.1 million during the six months ended June 30, 2019 and the provision for income taxes was $6.2 million during the six months ended June 30, 2018, resulting in a net change of $19.3 million. The net change for both comparative periods was primarily attributable to a benefit generated from the post-acquisition statutory operating losses from Small Giant and Gram Games and a change in our jurisdictional mix of earnings, offset by an increase in expense in 2019 related to Base Erosion and Anti-Abuse Tax (“BEAT”). |
Debt
Debt | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 10. Debt Convertible Senior Notes On June 14, 2019, we issued $690.0 million aggregate principal amount of 0.25% Convertible Senior Notes due 2024 (the “Notes”), including the initial purchasers’ exercise in full of their option to purchase an additional $90.0 million principal amount of the Notes, in a private placement to qualified institutional buyers in an offering exempt from registration under the Securities Act. The net proceeds from the issuance of the Notes was $672.4 million after deducting the initial purchasers’ fees. The Notes are governed by an indenture (the “Indenture”) between us, as the issuer, and Wells Fargo Bank, National Association, as trustee. The Notes are senior unsecured obligations and rank senior in right of payment to all of our indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment to all of our existing and future liabilities that are not so subordinated; effectively junior to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities of our current or future subsidiaries (including trade payables). The Indenture does not contain any financial covenants. The Notes mature on June 1, 2024 unless earlier converted, redeemed or repurchased in accordance with their term prior to the maturity date. Interest is payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2019. The Notes have an initial conversion rate of 120.3695 shares of our Class A common stock per $1,000 principal amount of Notes, which is equal to an initial conversion price of approximately $8.31 per share of our Class A common stock and is subject to adjustment in certain events. Following certain corporate events that occur prior to the maturity date or following our issuance of a notice of redemption, we will increase the conversion rate for a holder who elects to convert its Notes in connection with such corporate event or during the related redemption period in certain circumstances. Additionally, upon the occurrence of a corporate event that constitutes a “fundamental change” per the Indenture, holders of the Notes may require us to repurchase for cash all or a portion of their Notes at a purchase price equal to 100% of the principal amount of the Notes plus accrued and unpaid interest. Prior to the close of business on the business day immediately preceding March 1, 2024, the Notes will be convertible only under the following circumstances: • during any calendar quarter commencing after September 30, 2019, if the last reported sale price of our Class A common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business-day period after any five consecutive trading-day period in which the trading price per $1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of our Class A common stock and the conversion rate on each such trading day; • if we call the Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or • upon the occurrence of specified corporate events described in the Indenture. On or after March 1, 2024, holders of the Notes may convert all or any portion of their Notes regardless of the foregoing conditions. Upon any conversion, holders will receive cash, shares of our Class A common stock or a combination of cash and shares of our Class A common stock, at our election. The Company may not redeem the Notes prior to June 5, 2022. On or after June 5, 2022, the Company may redeem for cash all or any portion of the Notes, at its option, if the last reported sale price of our Class A common stock has been at least 130% of the conversion price for at least 20 trading days during any 30 consecutive trading-day period ending on the immediately preceding date when the Company provides a notice of redemption. The redemption price is equal to 100% of the principal amount of the Notes to be redeemed, plus any accrued and unpaid interest. As of June 30, 2019, the conditions allowing holders of the Notes to convert have not been met and therefore the Notes are not yet convertible. We separately accounted for the liability and equity components of the Notes. We determined the initial carrying amount of the $572.0 million liability component by calculating the present value of the cash flows using an effective interest rate of 4.1%. The interest rate was determined based on non-convertible debt offerings of similar sizes and terms by companies with similar credit ratings (Level 2 inputs). The carrying amount of the equity component, representing the conversion option, was $118.0 million and was calculated by deducting the initial carrying value of the liability component from the principal amount of the Notes as a whole. This difference represents a debt discount that is amortized to interest expense over the 5-year contractual term of the Notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. We allocate transaction costs related to the issuance of the Notes to the liability and equity components using the same proportions as the initial carrying value of the Notes. Transaction costs attributable to the liability component were $14.6 million and are being amortized to interest expense using the effective interest method over the term of the Notes. Transaction costs attributable to the equity component were $3.0 million and are accounted for consistently with the equity component of the debt. The net carrying amount of the liability and equity components of the Notes was as follows (in thousands): June 30, 2019 Liability component: Principal $ 690,000 Unamortized debt discount (117,094 ) Unamortized transaction costs (14,512 ) Net carrying amount $ 558,394 Equity component, net of transaction costs $ 114,974 Interest expense recognized related to the Notes was as follows (in thousands): Three and Six Months Ended June 30, 2019 Contractual interest expense $ 72 Amortization of debt discount 897 Amortization of transaction costs 111 Total $ 1,080 As of June 30, 2019, the estimated fair value of the Notes was $671.3 million. We estimated the fair value based on the quoted market prices in an inactive market on the last trading day of the reporting period, which are considered Level 2 inputs. Capped Call Transactions In connection with the offering of the Notes, the Company entered into privately negotiated capped call transactions with certain counterparties (collectively, the “Capped Calls”). The Capped Calls have an initial strike price of approximately $8.31 per share, subject to certain adjustments, which corresponds to the initial conversion price of the Notes. The Capped Calls have an initial cap price of $12.54 per share, subject to certain adjustments. The Capped Calls are generally intended to reduce or offset the potential economic dilution of approximately 83.1 million shares to our Class A common stock upon any conversion of the Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. As the Capped Calls are considered indexed to our own stock and are equity classified, they are recorded in stockholders’ equity and are not accounted for as derivatives. The cost of $73.8 million incurred in connection with the Capped Calls was recorded as a reduction to additional paid-in capital. Convertible Senior Notes and Capped Call Transactions – Impact on Earnings per Share The 83.1 million shares underlying the conversion option of the Notes were not considered in the calculation of diluted net loss for the three and six months ended June 30, 2019, because their impact is antidilutive. When the Company is in a net income position, the Notes will not have an impact on our diluted earnings per share until the average market price of our Class A common stock exceeds the conversion price of $8.31 per share, as we intend and have the ability to settle the principal amount of the Notes in cash upon conversion. When we report net income, the Company will compute the potentially dilutive shares of Class A common stock related to the Notes using the treasury stock method. Capped Calls are excluded from the calculation of diluted earnings per share, as they would be antidilutive under the treasury stock method. Credit Facility In December 2018, the Company entered into a credit agreement (the “Credit Agreement”) with Bank of America, N.A. that provides for a three-year revolving credit facility (the “Credit Facility”) in an aggregate principal amount of up to $200.0 million and is secured by a blanket lien on the Company’s assets, excluding the Company’s San Francisco corporate headquarters. The Credit Facility will reduce to $150.0 million upon the earlier of (i) a sale of the Company’s corporate headquarters or (ii) the first anniversary of the closing date, unless, within 90 days after such anniversary, the Company mortgages its corporate headquarters as collateral to secure the Credit Facility. The Company may borrow, repay and re-borrow funds under the Credit Agreement until the third anniversary of the closing date, at which time the Credit Facility will terminate, and all outstanding revolving loans, together with all accrued and unpaid interest, must be repaid. Finally, the Company may use the proceeds of future borrowings under the Credit Facility for general corporate purposes. At the Company’s option, revolving loans accrue interest at a per annum rate based on either (i) the base rate plus a margin ranging from 0.50% to 1.00%, determined based on the Company’s consolidated leverage ratio for the four most recent fiscal quarters (the “Consolidated Leverage Ratio”) or (ii) the LIBOR rate (for interest periods of one, two, three or six months) plus a margin ranging from 1.50% to 2.00%, determined based on the Company’s Consolidated Leverage Ratio (“LIBOR Loan”). The base rate is defined as the highest of (i) the federal funds rate, plus 0.50%, (ii) Bank of America, N.A.’s prime rate and (iii) the LIBOR rate for a one-month interest period plus 1.00%. The Company is also obligated to pay an ongoing commitment fee on undrawn amounts at a rate ranging from 0.25% to 0.35%, determined based on the Company’s Consolidated Leverage Ratio. On December 28, 2018, the Company drew against the Credit Facility for a $100.0 million LIBOR Loan, with a three-month interest period at an interest rate of 4.31% and continued the loan on March 28, 2019, for another three-month interest period, at an interest rate of 4.10%. On June 19, 2019, the Company repaid the $100.0 million LIBOR Loan and as a result, has the full $200.0 million of borrowing capacity remaining as of June 30, 2019. However, in connection with the Sale Agreement and consistent with the terms of the Credit Facility, the borrowing capacity reduced to $150.0 million on July 1, 2019. Debt issuance costs associated with the Credit Facility were capitalized and will amortize on a straight-line basis over the three-year term of the Credit Agreement, with the expense recorded to interest expense in our consolidated statement of operations. |
Other Current and Non-Current L
Other Current and Non-Current Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Current and Non-Current Liabilities | 11. Other Current and Non-Current Liabilities Other current liabilities consist of the following (in thousands): June 30, December 31, 2019 2018 Accrued accounts payable $ 46,171 $ 22,669 Accrued compensation liability 34,352 41,554 Accrued restructuring liability — 3,449 Contingent consideration payable 112,200 17,300 Accrued payable from acquisitions 25,000 35,000 Accrued lease incentive obligation — 24,895 Value-added taxes payable 3,647 2,624 Other current liabilities 8,512 9,338 Total other current liabilities $ 229,882 $ 156,829 Accrued compensation liability represents employee bonus and other payroll withholding expenses. Other current liabilities include various expenses that we accrue for transaction taxes, customer deposits and accrued vendor expenses. Other non-current liabilities consist of the following (in thousands): June 30, December 31, 2019 2018 Contingent consideration obligation $ 144,200 $ 31,700 Accrued payable from acquisitions 30,000 — Accrued restructuring liability — 7,613 Uncertain tax positions liability, including interest and penalties 10,424 10,065 Other non-current liabilities 2,588 3,208 Total other non-current liabilities $ 187,212 $ 52,586 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 12. Stockholders’ Equity We recorded stock-based compensation expense related to grants of employee stock options, restricted stock units (“ZSUs”) and performance-based awards in our consolidated statements of operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cost of revenue $ 397 $ 564 $ 681 $ 995 Research and development 12,238 10,363 23,953 18,988 Sales and marketing 2,920 2,214 5,407 4,050 General and administrative 5,800 4,228 10,087 7,449 Total stock-based compensation expense $ 21,355 $ 17,369 $ 40,128 $ 31,482 The following table shows stock option activity for the six months ended June 30, 2019 (in thousands, except weighted-average exercise price and weighted-average contractual term): Outstanding Options Weighted- Aggregate Weighted- Average Intrinsic Value of Average Exercise Stock Options Contractual Term Stock Options Price Outstanding (in years) Balance as of December 31, 2018 36,185 $ 2.35 $ 57,510 6.23 Granted 4,647 5.37 Forfeited, expired and cancelled — — Exercised (7,720 ) 0.41 Balance as of June 30, 2019 33,112 $ 3.23 $ 96,299 7.57 The following table presents the weighted-average grant date fair value and the related assumptions used to estimate the fair value of our stock options: Six Months Ended June 30, 2019 Expected term, in years 6 Risk-free interest rates 2.53 % Expected volatility 43 % Dividend yield — Weighted-average estimated fair value of options granted $ 2.41 The following table shows a summary of ZSU activity for the six months ended June 30, 2019 (in thousands, except weighted-average grant date fair value): Outstanding ZSUs Weighted- Average Grant Date Aggregate Fair Value Intrinsic Value of Shares (per share) Unvested ZSUs Unvested as of December 31, 2018 52,482 $ 3.49 $ 206,254 Granted 11,091 5.47 Vested (12,577 ) 3.42 Forfeited (2,248 ) 3.37 Unvested as of June 30, 2019 48,748 $ 3.97 $ 298,825 Stock Repurchases In April 2018, a share repurchase program was authorized for up to $200.0 million of our outstanding Class A common stock (the “2018 Share Repurchase Program”). The timing and amount of any stock repurchase will be determined based on market conditions, share price and other factors. The program does not require us to repurchase any specific number of shares of our Class A common stock and may be modified, suspended or terminated at any time without notice. The 2018 Share Repurchase Program will be funded from existing cash on hand or other sources of funding as the Company may determine to be appropriate. Share repurchases under these authorizations may be made through a variety of methods, which may include open market purchases, privately negotiated transactions, block trades, accelerated share repurchase transactions, purchases through 10b5-1 plans or by any combination of such methods. During the three and six months ended June 30, 2019, no share repurchases were made under the 2018 Share Repurchase Program. In November 2016, we announced that our Board of Directors authorized a share repurchase program allowing us to repurchase up to $200.0 million of our outstanding shares of Class A common stock (“2016 Share Repurchase Program”). In 2018, we completed the 2016 Share Repurchase Program by repurchasing 18.2 million shares of our Class A common stock at a weighted-average price of $3.59 per share for a total of $65.4 million. All of our stock repurchases were made through open market purchases under Rule 10b5-1 plans and subsequently retired. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2019 | |
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 13. Accumulated Other Comprehensive Income (Loss) The following table shows a summary of changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2019 (in thousands): Foreign Currency Translation Unrealized Gains (Losses) on Available-For-Sale Marketable Debt Securities Total Balance as of December 31, 2018 $ (118,441 ) $ 2 $ (118,439 ) Other comprehensive income (loss) before reclassifications (3,638 ) 51 (3,587 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — Net other comprehensive income (loss) (3,638 ) 51 (3,587 ) Balance as of June 30, 2019 $ (122,079 ) $ 53 $ (122,026 ) |
Net Income (Loss) Per Share of
Net Income (Loss) Per Share of Common Stock | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share of Common Stock | 14. Net Income (Loss) Per Share of Common Stock On May 2, 2018, our founder, Mark Pincus, elected to convert certain outstanding shares of Class B common stock and all outstanding shares of Class C common stock controlled by Mr. Pincus and an affiliated investment entity into an equivalent number of shares of Class A common stock. As a result of Mr. Pincus’ conversion, the remaining shares of Class B common stock represented less than 10% of the total voting power of all Zynga stockholders and, accordingly, each remaining outstanding share of Class B common stock automatically converted into one share of Class A common stock. Each Zynga stockholder now has one vote per share on all matters subject to stockholder vote. Following the conversion, no shares of Class B or Class C common stock are outstanding and the total number of authorized shares of capital stock will be reduced to account for the elimination of the Class B and Class C common stock. Accordingly, beginning in the second quarter of 2018, the Company calculated basic and dilutive net income (loss) per share under a single-class method. Prior to the conversion noted above, we computed net income (loss) per share of common stock using the two-class method required for participating securities and multiple classes of common stock. Prior to the date of the initial public offering, we considered all series of our convertible preferred stock to be participating securities due to their non-cumulative dividend rights. Additionally, we considered shares issued upon the early exercise of options subject to repurchase and unvested restricted shares to be participating securities, because the holders of such shares have non-forfeitable dividend rights in the event we declare a dividend for common shares. In accordance with the two-class method, net income allocated to these participating securities, which include participation rights in undistributed net income, is subtracted from net income (loss) to determine total net income (loss) to be allocated to common stockholders. Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding, including potential dilutive securities. In computing diluted net income (loss) per share, net income (loss) attributable to common shareholders is re-allocated to reflect the potential impact of dilutive securities, including stock options, unvested ZSUs, unvested performance-based ZSUs and ESPP withholdings. For periods in which we have generated a net loss or there is no income attributable to common stockholders, we do not include dilutive securities in our calculation of diluted net income (loss) per share, as the impact of these awards is anti-dilutive. The following tables set forth the computation of basic and diluted net income (loss) per share of common stock (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2019 2019 Class A Class A BASIC AND DILUTED: Net income (loss) attributable to common stockholders $ (55,830 ) $ (184,658 ) Weighted-average common shares outstanding 937,334 931,813 Net income (loss) per share attributable to common stockholders $ (0.06 ) $ (0.20 ) Three Months Ended June 30, Six Months Ended June 30, 2018 2018 Class A (1) Class A (1) BASIC: Net income (loss) attributable to common stockholders – basic $ (911 ) $ 4,698 Weighted-average common shares outstanding – basic 858,666 864,117 Net income (loss) per share attributable to common stockholders – basic $ (0.00 ) $ 0.01 DILUTED: Net income (loss) attributable to common stockholders – basic $ (911 ) $ 4,698 Weighted-average common shares outstanding – basic 858,666 864,117 Weighted-average effect of dilutive securities: Stock options and employee stock purchase plan — 10,803 ZSUs — 14,093 Performance-based ZSUs — 1,272 Weighted-average common shares outstanding – diluted 858,666 890,285 Net income (loss) per share attributable to common stockholders – diluted $ (0.00 ) $ 0.01 (1) The following weighted-average equity awards were excluded from the computation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Stock options and employee stock purchase plan 34,683 38,278 35,721 9,737 ZSUs 51,559 53,536 50,932 2,720 Total 86,242 91,814 86,653 12,457 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 15. Commitments and Contingencies The amounts represented in the tables below reflect our minimum cash obligations for the respective calendar years based on contractual terms, but not necessarily the periods in which these costs will be expensed in the Company’s consolidated statement of operations. Licensor and Marketing Commitments We have entered into several contracts with licensors that contain minimum contractual and marketing commitments that may not be dependent on any deliverables. As of June 30, 2019, future minimum contractual royalty payments due to licensors and marketing commitments for the licensed products are as follows (in thousands): Year ending December 31: 2019 $ 8,966 2020 40,886 Thereafter — Total $ 49,852 Other Purchase Commitments We have entered into several contracts primarily for hosting of data systems and other services. As of June 30, 2019, future minimum purchase commitments that have initial or remaining non-cancelable terms are as follows (in thousands): Year ending December 31: 2019 $ 13,077 2020 20,400 2021 9,513 Thereafter — Total $ 42,990 Excluded from tables above is our uncertain income tax position liability of $10.4 million, which includes interest and penalties, as the Company cannot make a reasonably reliable estimate of the period of cash settlement. Legal Matters The Company is involved in legal and regulatory proceedings on an ongoing basis. Some of these proceedings are in early stages and may seek an indeterminate amount of damages. If the Company believes that a loss arising from such matters is probable and can be reasonably estimated, the Company accrues the estimated liability in its financial statements. If only a range of estimated losses can be determined, the Company accrues an amount within the range that, in its judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, the Company accrues the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, the Company discloses such an estimate, if material. If such a loss or range of losses is not reasonably estimable, the Company discloses that fact. In assessing the materiality of a proceeding, the Company evaluates, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs that may require changes to business practices in a manner that could have a material adverse impact on the Company’s business. The Company is, at various times, also party to various other legal proceedings and claims not previously discussed which arise in the ordinary course of business. In addition, the Company may receive notifications alleging infringement of patent or other intellectual property rights. Adverse results in any such litigation, legal proceedings or claims may include awards of substantial monetary damages, expensive legal fees, costly royalty or licensing agreements, or orders preventing us from offering certain games, features, or services, and may also result in changes in the Company’s business practices, which could result in additional costs or a loss of revenue and could otherwise harm the Company’s business. Although the results of such litigation cannot be predicted with certainty, the Company believes that the amount or range of reasonably possible losses related to such pending or threatened litigation will not have a material adverse effect on its business, operating results, cash flows, or financial condition should such litigation be resolved unfavorably. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events On July 1, 2019, the building sale closed consistent with terms of the Sale Agreement detailed in Note 5 – “Property and Equipment, Net”. Upon the closing of the Sale Agreement, the Company entered into a lease agreement (the “Leaseback Agreement”) with the buyer to lease approximately 185,000 square feet of the Building over a 12-year term, where we expect to continue operating our headquarters. The Leaseback Agreement also provides the Company two separate options to extend the lease for eight years each and a third option to extend the lease for six years (for a total of an additional 22 years). The initial base rent will be approximately $10.7 million for the first year of the lease, and may increase by an annual amount not to exceed 3.25% per year. |
Overview and Summary of Signi_2
Overview and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The accompanying interim consolidated financial statements are presented in accordance with United States generally accepted accounting principles (“U.S. GAAP”). The interim consolidated financial statements include the operations of the Company and its owned subsidiaries. All significant intercompany balances and transactions have been eliminated in the consolidation. The accompanying interim consolidated financial statements and these related notes should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2018. |
Unaudited Interim Financial Information | Unaudited Interim Financial Information The accompanying interim consolidated balance sheets as of June 30, 2019 and December 31, 2018, the interim consolidated statements of operations, statements of comprehensive income (loss) and statements of stockholders’ equity for the three and six months ended June 30, 2019 and 2018, the statements of cash flows for the six months ended June 30, 2019 and 2018 and the notes to interim consolidated financial statements are unaudited. These unaudited interim consolidated financial statements have been prepared in accordance with U.S. GAAP. In management’s opinion, the unaudited interim consolidated financial statements include all adjustments of a normal recurring nature necessary for the fair presentation of the Company’s statement of financial position and operating results for the periods presented. The results for the three and six months ended June 30, 2019 are not necessarily indicative of the results expected for the full fiscal year or any other future period. |
Use Of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the interim consolidated financial statements and notes thereto. Significant estimates and assumptions reflected in the financial statements include, but are not limited to, the estimated average playing period of payers that we use for revenue recognition, useful lives of property and equipment and intangible assets, accrued liabilities, income taxes, the fair value of assets and liabilities acquired through business combinations, contingent consideration obligations, the discount rate used in discounting our operating lease liabilities, the interest rate used in present valuing the initial liability component of our convertible notes, stock-based compensation expense and evaluation of recoverability of goodwill, intangible assets, and long-lived assets. Actual results could differ materially from those estimates. For the three and six months ended June 30, 2019, there was no significant impact from discontinued games or from changes in our estimated average playing period of payers that required adjusting the recognition period of deferred revenue generated in prior periods. For the three and six months ended June 30, 2018, we recognized $0.5 million and $0.9 million, respectively, of online game revenue and income from operations from games that have been discontinued as there is no further performance obligation. This change in estimate did not impact our reported earnings per share in three months ended June 30, 2018 but had a $0.01 per share impact on our reported earnings per share in the six months ended June 30, 2018. For the three and six months ended June 30, 2018, there were no changes in our estimated average playing period of payers that required adjusting the recognition period of deferred revenue generated in prior periods. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Issued But Not Yet Adopted In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2018-15, “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” ASC Topic 350-40, Internal-Use Software Issued And Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)” “Leases (Topic 842) – Targeted Improvements” Adoption Impact – Lessee Accounting The adoption of ASC Topic 842 on January 1, 2019 resulted in the recognition of right-of-use assets of $9.1 million, which includes the elimination of our remaining prepaid rent and deferred rent balances, current operating lease liabilities of $7.6 million and non-current operating lease liabilities of $12.4 million. The adoption of ASC Topic 842 did not impact our consolidated statement of operations or consolidated statement of cash flows. ASC Topic 842 also amends the provisions of ASC Topic 420 – Exit or Disposal Obligations ASC 360 – Property, Plant, and Equipment As part of the adoption, the new standard allows a number of practical expedients and exemptions. At transition, we elected the following: • The package of practical expedients, which allows us to carryforward our historical lease classification, assessment of whether a contract is or contains a lease and initial direct costs for any leases that exist prior to adoption of the new standard; • The practical expedient to not separate non-lease components from the related lease components; and • The exemption to not apply the balance sheet recognition requirements for leases with a lease term of 12 months or less and instead, expense those costs on a straight-line basis over the lease term, or in the period in which the obligation is incurred, if such costs are variable. Adoption Impact – Lessor Accounting There was no impact to our financial statements as a result of adopting ASC Topic 842. ASU 2018-11, “Leases (Topic 842) – Targeted Improvements” Refer to Note 6 – “Leases” for further details on our lease arrangements as a lessee and lessor. |
Acquisition Related Contingent Consideration / Fair Value Measures Liabilities | Under the terms of the Gram Games acquisition, contingent consideration may be payable based on the achievement of certain future profitability performance targets during each annual period following the acquisition date for a total of three years, with no maximum limit as to the contingent consideration achievable. We estimated the acquisition date and subsequent reporting period fair values of the contingent consideration obligation using a Monte Carlo simulation. The significant unobservable inputs used in the fair value measurement of the contingent consideration obligation were Gram Games’ projected performance, a risk-adjusted discount rate and performance volatility similar to industry peers. Changes to projected performance of the acquired business could result in a higher or lower contingent consideration obligation in the future. As of December 31, 2018, the estimated fair value of the Gram Games contingent consideration obligation was $49.0 million and as of June 30, 2019, the estimated fair value of the contingent consideration obligation increased to $72.8 million, primarily due to stronger than expected performance and the increased probability of achievement. For six months ended June 30, 2019, we recognized $23.8 million of expense within research and development expenses in our consolidated statement of operations. For the three months ended June 30, 2019, we recognized a $2.7 million benefit within research and development expenses in our consolidated statement of operations, driven by continued refinement of forecasted financial results. Under the terms of the Small Giant acquisition, contingent consideration may be payable based on the achievement of certain future profitability performance targets during each annual period following the acquisition date for a total of three years, with no maximum limit as to the contingent consideration achievable. We estimated the acquisition date and subsequent reporting period fair values of the contingent consideration obligation using a Monte Carlo simulation. The significant unobservable inputs used in the fair value measurement of the contingent consideration obligation were Small Giant’s projected performance, a risk-adjusted discount rate and performance volatility similar to industry peers. Changes to projected performance of the acquired business could result in a higher or lower contingent consideration obligation in the future. At acquisition, the estimated fair value of the contingent consideration obligation was $98.0 million. As of June 30, 2019, the estimated fair value of the contingent consideration obligation increased to $183.6 million, primarily due to stronger than expected performance and the increased probability of achievement. Accordingly, for the three and six months ended June 30, 2019, we recognized $26.6 million and $85.6 million, respectively, of expense within research and development expenses in our consolidated statement of operations. |
Fair Value Measurements Investment | We estimate fair value as the exit price, which represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between knowledgeable and willing market participants. The valuation techniques used to measure the fair value of the Company’s financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model-driven valuations using significant inputs derived from or corroborated by observable market data. We use a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Includes inputs, other than Level 1 inputs, that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs that are supported by little or no market activity. |
Lessee Arrangements | We determine if an arrangement is a lease at contract inception. If there is an identified asset in the contract (either explicitly or implicitly) and we have control over its use, the contract is (or contains) a lease. In determining if there is an identified asset, we apply judgment in assessing whether the supplier has a substantive substitution right based on the supplier’s practical ability to substitute the asset and the economic benefit to do so. If it is determined that a substantive substitution right exists, the contract is not a lease and is not accounted for under ASC Topic 842. With the respect to the servers utilized in certain of our hosting and data storage arrangements, the Company determined that a substantive substitution right existed given the location of the servers at the supplier’s premises, a lack of contractual restrictions preventing the supplier from substituting the servers throughout the period of use and the economic incentive for the supplier to substitute the servers as needed in order to efficiently handle varying levels of demand from its various customers. In determining the present value of lease payments, we discount future lease payments using our incremental borrowing rate since the implicit rate in our various leases is unknown. The incremental borrowing rate is determined at lease commencement for each individual lease and is based on a number of factors, including relevant observable debt transactions, the current economic environment, lease term and currency in which the lease is denominated. As of June 30, 2019, the weighted-average incremental borrowing rate for our operating leases was 5.4%. |
Leases Income | The original agreement provides for total lease payments of $ 167.3 million, including escalating lease payments and various lease incentives that are recognized on a straight-line basis over the lease term. In February 2019, the original agreement was amended to provide additional space to the tenant, resulting in an add itional $ 5.1 million of lease payments to be received over the lease term and an additional $ 0.8 million of lease incentives for tenant improvements. |
Debt | We separately accounted for the liability and equity components of the Notes. We determined the initial carrying amount of the $572.0 million liability component by calculating the present value of the cash flows using an effective interest rate of 4.1%. The interest rate was determined based on non-convertible debt offerings of similar sizes and terms by companies with similar credit ratings (Level 2 inputs). The carrying amount of the equity component, representing the conversion option, was $118.0 million and was calculated by deducting the initial carrying value of the liability component from the principal amount of the Notes as a whole. This difference represents a debt discount that is amortized to interest expense over the 5-year contractual term of the Notes using the effective interest rate method. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. We allocate transaction costs related to the issuance of the Notes to the liability and equity components using the same proportions as the initial carrying value of the Notes. Transaction costs attributable to the liability component were $14.6 million and are being amortized to interest expense using the effective interest method over the term of the Notes. Transaction costs attributable to the equity component were $3.0 million and are accounted for consistently with the equity component of the debt. |
Earnings Per Share | On May 2, 2018, our founder, Mark Pincus, elected to convert certain outstanding shares of Class B common stock and all outstanding shares of Class C common stock controlled by Mr. Pincus and an affiliated investment entity into an equivalent number of shares of Class A common stock. As a result of Mr. Pincus’ conversion, the remaining shares of Class B common stock represented less than 10% of the total voting power of all Zynga stockholders and, accordingly, each remaining outstanding share of Class B common stock automatically converted into one share of Class A common stock. Each Zynga stockholder now has one vote per share on all matters subject to stockholder vote. Following the conversion, no shares of Class B or Class C common stock are outstanding and the total number of authorized shares of capital stock will be reduced to account for the elimination of the Class B and Class C common stock. Accordingly, beginning in the second quarter of 2018, the Company calculated basic and dilutive net income (loss) per share under a single-class method. Prior to the conversion noted above, we computed net income (loss) per share of common stock using the two-class method required for participating securities and multiple classes of common stock. Prior to the date of the initial public offering, we considered all series of our convertible preferred stock to be participating securities due to their non-cumulative dividend rights. Additionally, we considered shares issued upon the early exercise of options subject to repurchase and unvested restricted shares to be participating securities, because the holders of such shares have non-forfeitable dividend rights in the event we declare a dividend for common shares. In accordance with the two-class method, net income allocated to these participating securities, which include participation rights in undistributed net income, is subtracted from net income (loss) to determine total net income (loss) to be allocated to common stockholders. Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of common shares outstanding, including potential dilutive securities. In computing diluted net income (loss) per share, net income (loss) attributable to common shareholders is re-allocated to reflect the potential impact of dilutive securities, including stock options, unvested ZSUs, unvested performance-based ZSUs and ESPP withholdings. For periods in which we have generated a net loss or there is no income attributable to common stockholders, we do not include dilutive securities in our calculation of diluted net income (loss) per share, as the impact of these awards is anti-dilutive. |
Legal Contingencies | The Company is involved in legal and regulatory proceedings on an ongoing basis. Some of these proceedings are in early stages and may seek an indeterminate amount of damages. If the Company believes that a loss arising from such matters is probable and can be reasonably estimated, the Company accrues the estimated liability in its financial statements. If only a range of estimated losses can be determined, the Company accrues an amount within the range that, in its judgment, reflects the most likely outcome; if none of the estimates within that range is a better estimate than any other amount, the Company accrues the low end of the range. For proceedings in which an unfavorable outcome is reasonably possible but not probable and an estimate of the loss or range of losses arising from the proceeding can be made, the Company discloses such an estimate, if material. If such a loss or range of losses is not reasonably estimable, the Company discloses that fact. In assessing the materiality of a proceeding, the Company evaluates, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs that may require changes to business practices in a manner that could have a material adverse impact on the Company’s business. |
Legal Expenses | Legal expenses are recognized as incurred. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue From Contract With Customer [Abstract] | |
Summary of Disaggregated Revenue | The following table presents our revenue disaggregated by platform (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Online game: Mobile $ 223,779 $ 143,026 $ 406,612 $ 282,856 Other (1) 16,929 21,654 34,260 43,377 Online game total $ 240,708 $ 164,680 $ 440,872 $ 326,233 Advertising and other: Mobile 63,663 49,718 126,923 92,489 Other (1) 2,129 2,647 4,108 6,555 Advertising and other total $ 65,792 $ 52,365 $ 131,031 $ 99,044 Total revenue $ 306,500 $ 217,045 $ 571,903 $ 425,277 (1) Includes web for Online Game and web advertising revenue and other revenue for Advertising and Other The following table presents our revenue disaggregated based on the geographic location of our payers (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 United States $ 194,309 $ 142,541 $ 366,260 $ 278,537 All other countries (1) 112,191 74,504 205,643 146,740 Total revenue $ 306,500 $ 217,045 $ 571,903 $ 425,277 (1) No foreign country exceeded 10% of our total revenue for any periods presented. |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Cash And Cash Equivalents [Abstract] | |
Summary of Available-for-Sale Short-Term and Long-Term Investments | The following tables summarize the amortized cost, gross unrealized gains and losses and fair value of our short-term and long-term investments as of June 30, 2019 and December 31, 2018 (in thousands): June 30, 2019 Gross Gross Amortized Unrealized Unrealized Aggregate Cost Gains Losses Fair Value Short-term investments: Corporate debt securities $ 134,219 $ 43 $ — $ 134,262 U.S. government and government agency debt securities 3,000 3 — 3,003 Total $ 137,219 $ 46 $ — $ 137,265 Long-term investments: Corporate debt securities $ 1,997 $ 7 $ 2,004 Total $ 1,997 $ 7 $ — $ 2,004 December 31, 2018 Gross Gross Amortized Unrealized Unrealized Aggregate Cost Gains Losses Fair Value Short-term investments: Corporate debt securities $ 36,230 $ 2 $ — $ 36,232 Total $ 36,230 $ 2 $ — $ 36,232 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Assets and Liabilities Measured on Recurring Basis | The composition of our financial assets and liabilities as of June 30, 2019 and December 31, 2018 among the three levels of the fair value hierarchy are as follows (in thousands): June 30, 2019 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 190,094 $ — $ — $ 190,094 Corporate debt securities — 228,388 — 228,388 Short-term investments: Corporate debt securities — 134,262 — 134,262 U.S. government and government agency debt securities — 3,003 — 3,003 Long-term investments: Corporate debt securities — 2,004 — 2,004 Total financial assets $ 190,094 $ 367,657 $ — $ 557,751 Liabilities: Contingent consideration $ — $ — $ 256,400 $ 256,400 December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 565 $ — $ — $ 565 Corporate debt securities — 4,987 — 4,987 Short-term investments: Corporate debt securities — 36,232 — 36,232 Total financial assets $ 565 $ 41,219 $ — $ 41,784 Liabilities: Contingent consideration $ — $ — $ 49,000 $ 49,000 |
Fair Value Liabilities Measured on Recurring Basis | The following table presents the activity for the six months ended June 30, 2019 related to our Level 3 liabilities (in thousands): Level 3 Liabilities: Total Contingent consideration obligation – December 31, 2018 $ 49,000 Additions 98,000 Fair value adjustments 109,400 Contingent consideration obligation – June 30, 2019 $ 256,400 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Property Plant And Equipment [Abstract] | |
Components of Property and Equipment, Net | Property and equipment, net consist of the following (in thousands): June 30, December 31, 2019 2018 Computer equipment $ 22,451 $ 20,624 Software 35,224 34,937 Land — 89,130 Building and building improvements — 203,873 Furniture and fixtures 11,203 10,321 Leasehold improvements 11,361 6,144 Total property and equipment, gross $ 80,239 $ 365,029 Less: Accumulated depreciation (62,196 ) (98,472 ) Total property and equipment, net $ 18,043 $ 266,557 |
Property and Equipment, Net | The following represents our property and equipment, net by location (in thousands): June 30, December 31, 2019 2018 United States $ 9,066 $ 262,844 All other countries 8,977 3,713 Total property and equipment, net $ 18,043 $ 266,557 |
Summary of Assets Held for Sale and Liabilities Related to Assets Held for Sale | The Assets Held for Sale and Liabilities Related to Assets Held for Sale consist of the following (in thousands): June 30, 2019 Assets Held for Sale: Property and equipment, net: Land $ 89,130 Building and building improvements 162,530 Other lessor related assets 59,242 Total assets held for sale $ 310,902 Liabilities Related to Assets Held for Sale: Tenant improvement obligations and other lessor related liabilities $ 46,279 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | For the three and six months ended June 30, 2019 , the components of lease expense were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2019 Operating lease expense $ 2,086 $ 3,864 Variable lease expense 620 1,143 Total lease expense (1) $ 2,706 $ 5,007 (1) The expense associated with short-term leases with a lease term of greater than one month were not material for the three and six months ended June 30, 2019. |
Schedule of Supplemental Cash Flow and Non-Cash Information Related to Operating Leases Excluding Transition Adjustments | For the three and six months ended June 30, 2019, supplemental cash and noncash information related to operating leases, excluding any transition adjustments, was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2019 Fixed operating lease payments: $ 2,481 $ 4,718 Right-of-use assets obtained in exchange for operating lease liabilities (noncash): $ 114 $ 11,180 |
Schedule of Future Lease Payments Related to Our Operating Leases | As of June 30, 2019, future lease payments related to our operating leases were as follows (in thousands): Year ending December 31: Operating Leases Remaining 2019 $ 5,258 2020 9,617 2021 7,824 2022 3,868 2023 2,917 2024 179 Thereafter — Total lease payments 29,663 Less: Imputed interest (2,704 ) Total lease liability balance $ 26,959 |
Schedule of Components of Lease Income | For the three and six months ended June 30, 2019, the components of lease income were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2019 Operating lease income $ 5,942 $ 10,563 Variable lease income 606 1,103 Total lease income $ 6,548 $ 11,666 |
Schedule of Cash To Be Received From Future Operating Lease Payments | As of June 30, 2019, prior to the sale of the Building, cash to be received from future operating lease payments is expected to be as follows (in thousands): Year ending December 31: Operating Leases Remaining 2019 $ 9,599 2020 25,909 2021 31,502 2022 32,447 2023 33,421 2024 34,423 Thereafter 136,372 Total lease payments $ 303,673 |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Acquisition Price Allocation | The following table summarizes the acquisition date fair value of the tangible assets, intangible assets, liabilities assumed, contingent consideration payable and related goodwill acquired from Small Giant (in thousands): Total Cash $ 34,193 Accounts receivable, net 22,974 Prepaid expenses 2,561 Intangible assets, net: Developed technology, useful life of 5 years 155,000 Trade names, useful life of 7 years 32,000 Goodwill 529,290 Property and equipment, net 180 Right-of-use assets 883 Other non-current assets 120 Total assets acquired 777,201 Accounts payable (1,716 ) Income tax payable (5,623 ) Operating lease liabilities (380 ) Other current liabilities (16,126 ) Deferred tax liabilities, net (37,400 ) Non-current operating lease liabilities (503 ) Total liabilities (61,748 ) Total purchase price consideration $ 715,453 Fair value of Zynga Stock Consideration (1) (253,903 ) Non-current contingent consideration payable (98,000 ) Total cash consideration $ 363,550 (1) |
Summary of Unaudited Pro Forma Financial Information | The unaudited pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of 2018. Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Total revenue $ 306,500 $ 238,554 $ 571,903 $ 459,802 Net loss $ (55,598 ) $ (16,740 ) $ (177,462 ) $ (32,254 ) Basic and diluted earnings per share $ (0.06 ) $ (0.02 ) $ (0.19 ) $ (0.03 ) |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes to Goodwill | The following table presents the changes to goodwill for the six months ended June 30, 2019 (in thousands): Goodwill – December 31, 2018 (1) $ 934,187 Additions 529,290 Foreign currency translation adjustments (2) (2,581 ) Goodwill – June 30, 2019 (1) $ 1,460,896 (1) (2) |
Acquisition-Related Intangible Assets | The details of our acquisition-related intangible assets as of June 30, 2019 and December 31, 2018 are as follows (in thousands): June 30, 2019 Gross Carrying Value Accumulated Amortization Net Book Value Developed technology $ 417,739 $ (197,675 ) $ 220,064 Trademarks, branding and domain names 64,558 (15,199 ) 49,359 Noncompetition agreements 8,390 (7,890 ) 500 Total $ 490,687 $ (220,764 ) $ 269,923 December 31, 2018 Gross Value Accumulated Amortization Net Book Developed technology $ 263,720 $ (167,664 ) $ 96,056 Trademarks, branding and domain names 32,772 (11,702 ) 21,070 Noncompetition agreements 8,390 (7,107 ) 1,283 Acquired lease intangibles 5,708 (5,517 ) 191 Total $ 310,590 $ (191,990 ) $ 118,600 |
Schedule of Finite Lived Intangible Assets Future Amortization Expense | As of June 30, 2019, future amortization expense related to our intangible assets is expected to be recognized as shown below (in thousands): Year ending December 31: Remaining 2019 $ 33,330 2020 66,449 2021 58,921 2022 51,701 2023 41,202 2024 6,826 Thereafter 5,374 Total $ 263,803 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Liability and Equity Components of Notes | The net carrying amount of the liability and equity components of the Notes was as follows (in thousands): June 30, 2019 Liability component: Principal $ 690,000 Unamortized debt discount (117,094 ) Unamortized transaction costs (14,512 ) Net carrying amount $ 558,394 Equity component, net of transaction costs $ 114,974 |
Schedule of Interest Expense Recognized Related to Notes | Interest expense recognized related to the Notes was as follows (in thousands): Three and Six Months Ended June 30, 2019 Contractual interest expense $ 72 Amortization of debt discount 897 Amortization of transaction costs 111 Total $ 1,080 |
Other Current and Non-Current_2
Other Current and Non-Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Current Liabilities | Other current liabilities consist of the following (in thousands): June 30, December 31, 2019 2018 Accrued accounts payable $ 46,171 $ 22,669 Accrued compensation liability 34,352 41,554 Accrued restructuring liability — 3,449 Contingent consideration payable 112,200 17,300 Accrued payable from acquisitions 25,000 35,000 Accrued lease incentive obligation — 24,895 Value-added taxes payable 3,647 2,624 Other current liabilities 8,512 9,338 Total other current liabilities $ 229,882 $ 156,829 |
Schedule of Other Non-Current Liabilities | Other non-current liabilities consist of the following (in thousands): June 30, December 31, 2019 2018 Contingent consideration obligation $ 144,200 $ 31,700 Accrued payable from acquisitions 30,000 — Accrued restructuring liability — 7,613 Uncertain tax positions liability, including interest and penalties 10,424 10,065 Other non-current liabilities 2,588 3,208 Total other non-current liabilities $ 187,212 $ 52,586 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Stock-Based Compensation Expense Related to Grants of Employee Stock Options, Restricted Stock Units (ZSUs) and Performance-Based Awards | We recorded stock-based compensation expense related to grants of employee stock options, restricted stock units (“ZSUs”) and performance-based awards in our consolidated statements of operations as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Cost of revenue $ 397 $ 564 $ 681 $ 995 Research and development 12,238 10,363 23,953 18,988 Sales and marketing 2,920 2,214 5,407 4,050 General and administrative 5,800 4,228 10,087 7,449 Total stock-based compensation expense $ 21,355 $ 17,369 $ 40,128 $ 31,482 |
Schedule of Share Based Compensation Stock Option Activity | The following table shows stock option activity for the six months ended June 30, 2019 (in thousands, except weighted-average exercise price and weighted-average contractual term): Outstanding Options Weighted- Aggregate Weighted- Average Intrinsic Value of Average Exercise Stock Options Contractual Term Stock Options Price Outstanding (in years) Balance as of December 31, 2018 36,185 $ 2.35 $ 57,510 6.23 Granted 4,647 5.37 Forfeited, expired and cancelled — — Exercised (7,720 ) 0.41 Balance as of June 30, 2019 33,112 $ 3.23 $ 96,299 7.57 |
Weighted-Average Grant Date Fair Value of Stock Options and Related Assumptions | The following table presents the weighted-average grant date fair value and the related assumptions used to estimate the fair value of our stock options: Six Months Ended June 30, 2019 Expected term, in years 6 Risk-free interest rates 2.53 % Expected volatility 43 % Dividend yield — Weighted-average estimated fair value of options granted $ 2.41 |
Schedule of Share Based Compensation Restricted Stock Units Award Activity | The following table shows a summary of ZSU activity for the six months ended June 30, 2019 (in thousands, except weighted-average grant date fair value): Outstanding ZSUs Weighted- Average Grant Date Aggregate Fair Value Intrinsic Value of Shares (per share) Unvested ZSUs Unvested as of December 31, 2018 52,482 $ 3.49 $ 206,254 Granted 11,091 5.47 Vested (12,577 ) 3.42 Forfeited (2,248 ) 3.37 Unvested as of June 30, 2019 48,748 $ 3.97 $ 298,825 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table shows a summary of changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2019 (in thousands): Foreign Currency Translation Unrealized Gains (Losses) on Available-For-Sale Marketable Debt Securities Total Balance as of December 31, 2018 $ (118,441 ) $ 2 $ (118,439 ) Other comprehensive income (loss) before reclassifications (3,638 ) 51 (3,587 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — Net other comprehensive income (loss) (3,638 ) 51 (3,587 ) Balance as of June 30, 2019 $ (122,079 ) $ 53 $ (122,026 ) |
Net Income (Loss) Per Share o_2
Net Income (Loss) Per Share of Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share of Common Stock | The following tables set forth the computation of basic and diluted net income (loss) per share of common stock (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2019 2019 Class A Class A BASIC AND DILUTED: Net income (loss) attributable to common stockholders $ (55,830 ) $ (184,658 ) Weighted-average common shares outstanding 937,334 931,813 Net income (loss) per share attributable to common stockholders $ (0.06 ) $ (0.20 ) Three Months Ended June 30, Six Months Ended June 30, 2018 2018 Class A (1) Class A (1) BASIC: Net income (loss) attributable to common stockholders – basic $ (911 ) $ 4,698 Weighted-average common shares outstanding – basic 858,666 864,117 Net income (loss) per share attributable to common stockholders – basic $ (0.00 ) $ 0.01 DILUTED: Net income (loss) attributable to common stockholders – basic $ (911 ) $ 4,698 Weighted-average common shares outstanding – basic 858,666 864,117 Weighted-average effect of dilutive securities: Stock options and employee stock purchase plan — 10,803 ZSUs — 14,093 Performance-based ZSUs — 1,272 Weighted-average common shares outstanding – diluted 858,666 890,285 Net income (loss) per share attributable to common stockholders – diluted $ (0.00 ) $ 0.01 (1) |
Shares excluded from Computation of Diluted Net Income (Loss) per Share | The following weighted-average equity awards were excluded from the computation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Stock options and employee stock purchase plan 34,683 38,278 35,721 9,737 ZSUs 51,559 53,536 50,932 2,720 Total 86,242 91,814 86,653 12,457 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Contractual Royalty Payments to Licensors and Marketing Commitments | We have entered into several contracts with licensors that contain minimum contractual and marketing commitments that may not be dependent on any deliverables. As of June 30, 2019, future minimum contractual royalty payments due to licensors and marketing commitments for the licensed products are as follows (in thousands): Year ending December 31: 2019 $ 8,966 2020 40,886 Thereafter — Total $ 49,852 |
Schedule of Future Minimum Purchase Commitments | We have entered into several contracts primarily for hosting of data systems and other services. As of June 30, 2019, future minimum purchase commitments that have initial or remaining non-cancelable terms are as follows (in thousands): Year ending December 31: 2019 $ 13,077 2020 20,400 2021 9,513 Thereafter — Total $ 42,990 |
Overview and Summary of Signi_3
Overview and Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | Jan. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 |
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||||
Initial offering period | December 2011 | ||||
Online game revenue and income from operations | $ 500,000 | $ 900,000 | |||
Impact on reported earnings per share | $ 0 | $ 0.01 | |||
Discontinued online game revenue and income from operations | $ 0 | $ 0 | |||
Changes in revenue from adjustments of prior period deferred revenue | $ 0 | $ 0 | $ 0 | $ 0 | |
Current operating lease liabilities | 9,042,000 | 9,042,000 | |||
Non-current operating lease liabilities | 17,917,000 | 17,917,000 | |||
Lease liability recognized | $ 26,959,000 | $ 26,959,000 | |||
ASU 2016-02 [Member] | |||||
Revenue Recognition Multiple Deliverable Arrangements [Line Items] | |||||
Right-of-use assets | $ 9,100,000 | ||||
Current operating lease liabilities | 7,600,000 | ||||
Non-current operating lease liabilities | 12,400,000 | ||||
Derecognize restructuring plan liability | 10,900,000 | ||||
Lease liability recognized | $ 10,900,000 | ||||
Operating lease, term | 12 months | 12 months | |||
Lease and nonlease component, description | the lessor practical expedient is limited to circumstances in which the nonlease component or components otherwise would be accounted for under the new revenue guidance and both (i) the timing and pattern of transfer are the same for the nonlease component(s) and associated lease component and (ii) the lease component, if accounted for separately, would be classified as an operating lease. |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Summary of Revenue Disaggregated by Platform (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 306,500 | $ 217,045 | $ 571,903 | $ 425,277 |
Mobile Online Game [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 223,779 | 143,026 | 406,612 | 282,856 |
Other Online game [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 16,929 | 21,654 | 34,260 | 43,377 |
Online Game [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 240,708 | 164,680 | 440,872 | 326,233 |
Mobile Advertising and Other [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 63,663 | 49,718 | 126,923 | 92,489 |
Web Advertising and Other [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 2,129 | 2,647 | 4,108 | 6,555 |
Advertising and Other [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 65,792 | $ 52,365 | $ 131,031 | $ 99,044 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Summary of Revenue disaggregated Based on Geographic Location (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 306,500 | $ 217,045 | $ 571,903 | $ 425,277 |
United States [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 194,309 | 142,541 | 366,260 | 278,537 |
All Other Countries [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 112,191 | $ 74,504 | $ 205,643 | $ 146,740 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation Of Revenue [Line Items] | ||||
Current deferred revenue recognized | $ 58.5 | $ 168 | ||
Small Giant [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Accounts receivables, net | $ 23 | $ 23 | ||
Minimum [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Contract payment term related to advertising arrangements | 30 days | |||
Maximum [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Contract payment term related to advertising arrangements | 60 days | |||
Durable Virtual Items [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Estimated weighted average life of product | 10 months | 9 months | 9 months | 9 months |
Sales Revenue, Net [Member] | Product Concentration Risk [Member] | Consumable Virtual Items [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of online game revenue | 28.00% | 47.00% | 31.00% | 46.00% |
Sales Revenue, Net [Member] | Product Concentration Risk [Member] | Durable Virtual Items [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Percentage of online game revenue | 72.00% | 53.00% | 69.00% | 54.00% |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Additional Information (Detail1) | Jun. 30, 2019 |
Maximum [Member] | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-04-01 | |
Disaggregation Of Revenue [Line Items] | |
Expected length of unsatisfaction of performance obligations | 1 year |
Marketable Securities - Summary
Marketable Securities - Summary of Available-for-Sale Short-Term and Long-Term Investments (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 137,219 | $ 36,230 |
Gross Unrealized Gains | 46 | 2 |
Aggregate Fair Value | 137,265 | 36,232 |
Long-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,997 | |
Gross Unrealized Gains | 7 | |
Aggregate Fair Value | 2,004 | |
Corporate Debt Securities [Member] | Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 134,219 | 36,230 |
Gross Unrealized Gains | 43 | 2 |
Aggregate Fair Value | 134,262 | $ 36,232 |
Corporate Debt Securities [Member] | Long-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 1,997 | |
Gross Unrealized Gains | 7 | |
Aggregate Fair Value | 2,004 | |
U.S. Goverment and Goverment Agency Debt Securities [Member] | Short-term Investments [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 3,000 | |
Gross Unrealized Gains | 3 | |
Aggregate Fair Value | $ 3,003 |
Marketable Securities - Additio
Marketable Securities - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2019 | |
Maximum [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale short-term investments period of contractual maturities | 1 year |
Available-for-sale long-term investments period of contractual maturities | 2 years |
Minimum [Member] | |
Schedule of Available-for-sale Securities [Line Items] | |
Available-for-sale long-term investments period of contractual maturities | 1 year |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Jan. 02, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value assets liabilities transfers between valuation levels | $ 0 | $ 0 | ||
Gram Games [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration payable, total years | 3 years | |||
Contingent consideration obligation | $ 72,800,000 | $ 72,800,000 | $ 49,000,000 | |
Gram Games [Member] | Research and Development Expense [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration obligation, expense recognized | (2,700,000) | $ 23,800,000 | ||
Small Giant [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration payable, total years | 3 years | |||
Contingent consideration obligation | 183,600,000 | $ 183,600,000 | $ 98,000,000 | |
Small Giant [Member] | Research and Development Expense [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Contingent consideration obligation, expense recognized | $ 26,600,000 | $ 85,600,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Assets and Liabilities Measured on Recurring Basis (Detail) - Fair Value Measurements Recurring [Member] - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | $ 557,751 | $ 41,784 |
Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities Fair Value Disclosure Recurring | 256,400 | 49,000 |
Cash Equivalents [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 190,094 | 565 |
Corporate Debt Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 134,262 | 36,232 |
Corporate Debt Securities [Member] | Long-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 2,004 | |
Corporate Debt Securities [Member] | Cash Equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 228,388 | 4,987 |
U.S. Government and Government Agency Debt Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 3,003 | |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 190,094 | 565 |
Fair Value, Inputs, Level 1 [Member] | Cash Equivalents [Member] | Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 190,094 | 565 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 367,657 | 41,219 |
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 134,262 | 36,232 |
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | Long-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 2,004 | |
Fair Value, Inputs, Level 2 [Member] | Corporate Debt Securities [Member] | Cash Equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 228,388 | 4,987 |
Fair Value, Inputs, Level 2 [Member] | U.S. Government and Government Agency Debt Securities [Member] | Short-term Investments [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets Fair Value Disclosure Recurring | 3,003 | |
Fair Value, Inputs, Level 3 [Member] | Contingent Consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities Fair Value Disclosure Recurring | $ 256,400 | $ 49,000 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Value Liabilities Measured on Recurring Basis (Detail) - Fair Value Measurements Recurring [Member] - Fair Value, Inputs, Level 3 [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Contingent consideration obligation – December 31, 2018 | $ 49,000 |
Additions | 98,000 |
Fair value adjustments | 109,400 |
Contingent consideration obligation – June 30, 2019 | $ 256,400 |
Property and Equipment, Net - C
Property and Equipment, Net - Components of Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | $ 80,239 | $ 365,029 |
Less: Accumulated depreciation | (62,196) | (98,472) |
Total property and equipment, net | 18,043 | 266,557 |
Computer Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 22,451 | 20,624 |
Software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 35,224 | 34,937 |
Land [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 89,130 | |
Building and Building Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 203,873 | |
Furniture and Fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | 11,203 | 10,321 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, gross | $ 11,361 | $ 6,144 |
Property and Equipment, Net - P
Property and Equipment, Net - Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 18,043 | $ 266,557 |
United States [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 9,066 | 262,844 |
All Other Countries [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 8,977 | $ 3,713 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) $ in Millions | May 24, 2019USD ($) |
Sale Agreement [Member] | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |
Net proceeds from sale of buildings | $ 600 |
Property and Equipment, Net - S
Property and Equipment, Net - Summary of Assets Held for Sale and Liabilities Related to Assets Held for Sale (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Property and equipment, net: | |
Assets Held for Sale | $ 310,902 |
Liabilities Related to Assets Held for Sale: | |
Liabilities related to assets held for sale | 46,279 |
Land [Member] | |
Property and equipment, net: | |
Assets Held for Sale | 89,130 |
Building and Building Improvements [Member] | |
Property and equipment, net: | |
Assets Held for Sale | 162,530 |
Other Lessor Related Assets [Member] | |
Property and equipment, net: | |
Assets Held for Sale | 59,242 |
Tenant Improvement Obligations and Other Lessor Liabilities [Member] | |
Liabilities Related to Assets Held for Sale: | |
Liabilities related to assets held for sale | $ 46,279 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Feb. 28, 2019 | Oct. 31, 2018 | Jun. 30, 2019 | |
Lessor Lease Description [Line Items] | |||
Operating Lease, weighted average remaining lease term | 3 years 4 months 24 days | ||
Operating lease, weighted average incremental borrowing rate | 5.40% | ||
Lease incentive obligation, current | $ 9,042 | ||
San Francisco, California [Member] | |||
Lessor Lease Description [Line Items] | |||
Lease expiration date | Sep. 30, 2031 | Feb. 28, 2027 | |
Operating lease, options to extend description | The tenant also has two options to extend the lease term for a period of five years each. | ||
Operating lease, options to extend | true | ||
Operating lease, option to extend lease period | 5 years | ||
Rental payments to be received | $ 5,100 | $ 144,900 | $ 167,300 |
Building occupancy rate by tenant | 43.00% | ||
Lease incentive obligation to pay for tenant improvements | $ 800 | ||
Percentage of office space leased | 17.00% | ||
Lease commencement date | May 31, 2019 | ||
San Francisco, California [Member] | Tenant One [Member] | |||
Lessor Lease Description [Line Items] | |||
Lease incentive obligation, current | $ 43,700 | ||
San Francisco, California [Member] | Tenant Two [Member] | |||
Lessor Lease Description [Line Items] | |||
Lease incentive obligation, current | $ 2,400 | ||
Q4 2017 Restructuring Plan [Member] | |||
Lessor Lease Description [Line Items] | |||
Lease term expiration | 2022-11 | ||
Lessee option to early terminate lease term | 2019-11 | ||
Terms of assignment | All terms under the original lease were assigned in full to the assignee, with the assignee becoming primarily liable to make rental payments directly to the landlord. Further, the assignee was required to provide the landlord a security deposit equal to twelve months rent to be used by the landlord in the event of the assignee’s non-performance. | ||
Estimated maximum exposure of the guarantee | $ 1,900 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 2,086 | $ 3,864 |
Variable lease expense | 620 | 1,143 |
Total lease expense | $ 2,706 | $ 5,007 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow and Non-Cash Information Related to Operating Leases Excluding Transition Adjustments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Fixed operating lease payments: | $ 2,481 | $ 4,718 |
Right-of-use assets obtained in exchange for operating lease liabilities (noncash): | $ 114 | $ 11,180 |
Leases - Schedule of Future Lea
Leases - Schedule of Future Lease Payments Related to Our Operating Leases (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Remaining 2019 | $ 5,258 |
2020 | 9,617 |
2021 | 7,824 |
2022 | 3,868 |
2023 | 2,917 |
2024 | 179 |
Total lease payments | 29,663 |
Less: Imputed interest | (2,704) |
Total lease liability balance | $ 26,959 |
Leases - Schedule of Componen_2
Leases - Schedule of Components of Lease Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease income | $ 5,942 | $ 10,563 |
Variable lease income | 606 | 1,103 |
Total lease income | $ 6,548 | $ 11,666 |
Leases - Schedule of Cash To Be
Leases - Schedule of Cash To Be Received From Future Operating Lease Payments (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Leases [Abstract] | |
Remaining 2019 | $ 9,599 |
2020 | 25,909 |
2021 | 31,502 |
2022 | 32,447 |
2023 | 33,421 |
2024 | 34,423 |
Thereafter | 136,372 |
Total lease payments | $ 303,673 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Jan. 02, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | ||||||||
Weighted average amortization period of acquired intangible assets | 4 years 4 months 24 days | |||||||
Total revenue | $ 306,500 | $ 217,045 | $ 571,903 | $ 425,277 | ||||
Net income (loss) | (55,830) | $ (128,828) | (911) | $ 5,609 | $ (184,658) | 4,698 | ||
Noncompetition Agreements [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Weighted average amortization period of acquired intangible assets | 1 year 6 months | |||||||
Common Class A [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Net income (loss) | $ (55,830) | $ (911) | $ (184,658) | $ 4,698 | ||||
Small Giant [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition effective date of acquisition | Jan. 2, 2019 | |||||||
Percentage of acquired equity interest | 80.00% | 100.00% | 100.00% | |||||
Business acquisition, cost of acquired entity | $ 715,500 | |||||||
Percentage of potential consideration acquired | 20.00% | |||||||
Business acquisition, cost of acquired entity upfront cash paid | $ 333,600 | |||||||
Business acquisition, retained in escrow | $ 30,000 | |||||||
Business acquisition, escrow period | 18 months | |||||||
Fair value of Zynga Stock Consideration issued | [1] | $ 253,903 | ||||||
Consideration consideration | $ 98,000 | |||||||
Percentage of step in period equity interest acquired | 20.00% | |||||||
Business acquisition cash consideration payable step in period | 3 years | |||||||
Weighted average amortization period of acquired intangible assets | 5 years 3 months 18 days | |||||||
Total revenue | $ 37,000 | $ 49,900 | ||||||
Net income (loss) | (27,900) | (70,800) | ||||||
Small Giant [Member] | General and Administrative Expense [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Professional fees and transaction taxes | 200 | 7,600 | ||||||
Small Giant [Member] | Research and Development Expense [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Contingent consideration obligation, expense recognized | $ 26,600 | $ 85,600 | ||||||
Small Giant [Member] | Maximum [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Preliminary measurement period | 1 year | |||||||
Small Giant [Member] | Noncompetition Agreements [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Intangible assets, useful life | 3 years | |||||||
Small Giant [Member] | Common Class A [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Business acquisition consideration by shares | 63,794,746 | |||||||
[1] |
Acquisitions - Schedule of Acqu
Acquisitions - Schedule of Acquisition Price Allocation (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | |
Intangible assets, net: | ||||
Goodwill | $ 1,460,896 | $ 934,187 | ||
Small Gaint [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 34,193 | |||
Accounts receivables, net | 22,974 | |||
Prepaid expenses | 2,561 | |||
Intangible assets, net: | ||||
Goodwill | 529,290 | |||
Property and equipment, net | 180 | |||
Right-of-use assets | 883 | |||
Other non-current assets | 120 | |||
Total assets acquired | 777,201 | |||
Accounts payable | (1,716) | |||
Income tax payable | (5,623) | |||
Operating lease liabilities | (380) | |||
Other current liabilities | (16,126) | |||
Deferred tax liabilities, net | (37,400) | |||
Non-current operating lease liabilities | (503) | |||
Total liabilities | (61,748) | |||
Total purchase price consideration | 715,453 | |||
Fair value of Zynga Stock Consideration issued | [1] | (253,903) | ||
Non-current contingent consideration payable | (98,000) | |||
Total cash consideration | 363,550 | |||
Small Gaint [Member] | Developed Technology, Useful Life of 5 Years [Member] | ||||
Intangible assets, net: | ||||
Intangible assets, net: | 155,000 | |||
Small Gaint [Member] | Trade Names, Useful Life of 7 Years [Member] | ||||
Intangible assets, net: | ||||
Intangible assets, net: | $ 32,000 | |||
[1] |
Acquisitions - Schedule of Ac_2
Acquisitions - Schedule of Acquisition Price Allocation (Parenthetical) (Detail) - $ / shares | Jan. 02, 2019 | Mar. 31, 2019 |
Common Class A [Member] | ||
Business Acquisition [Line Items] | ||
Consideration transferred by issue of shares | 63,795,000 | |
Small Giant [Member] | Common Class A [Member] | ||
Business Acquisition [Line Items] | ||
Consideration transferred by issue of shares | 63,794,746 | |
Shares issued, price per share | $ 3.98 | |
Small Giant [Member] | Developed Technology, Useful Life of 5 Years [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets, useful life | 5 years | |
Small Giant [Member] | Trade Names, Useful Life of 7 Years [Member] | ||
Business Acquisition [Line Items] | ||
Intangible assets, useful life | 7 years |
Acquisitions - Summary of Unaud
Acquisitions - Summary of Unaudited Pro Forma Financial Information (Detail) - Small Giant [Member] - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Business Acquisition [Line Items] | ||||
Total revenue | $ 306,500 | $ 238,554 | $ 571,903 | $ 459,802 |
Net loss | $ (55,598) | $ (16,740) | $ (177,462) | $ (32,254) |
Basic and diluted earnings per share | $ (0.06) | $ (0.02) | $ (0.19) | $ (0.03) |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, Net - Schedule of Changes to Goodwill (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Goodwill Roll Forward | |
Goodwill – December 31, 2018 | $ 934,187 |
Additions | 529,290 |
Foreign currency translation adjustments | (2,581) |
Goodwill – June 30, 2019 | $ 1,460,896 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, Net - Schedule of Changes to Goodwill (Parenthetical) (Detail) - USD ($) | Jun. 30, 2019 | Dec. 31, 2018 |
Goodwill Roll Forward | ||
Accumulated impairments losses | $ 0 | $ 0 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, Net - Acquisition-Related Intangible Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 490,687 | $ 310,590 |
Accumulated Amortization | (220,764) | (191,990) |
Net Book Value | 269,923 | 118,600 |
Developed Technology [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 417,739 | 263,720 |
Accumulated Amortization | (197,675) | (167,664) |
Net Book Value | 220,064 | 96,056 |
Trademarks, Branding and Domain Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 64,558 | 32,772 |
Accumulated Amortization | (15,199) | (11,702) |
Net Book Value | 49,359 | 21,070 |
Noncompetition Agreements [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 8,390 | 8,390 |
Accumulated Amortization | (7,890) | (7,107) |
Net Book Value | $ 500 | 1,283 |
Acquired Lease Intangibles [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 5,708 | |
Accumulated Amortization | (5,517) | |
Net Book Value | $ 191 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Finite Lived Intangible Assets [Line Items] | |||||
Weighted-average remaining useful lives of acquired intangible assets | 4 years 4 months 24 days | ||||
Amortization Expense | $ 16.5 | $ 34.1 | $ 6 | $ 10.6 | |
Trademarks, Branding and Domain Names [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | $ 6.1 | $ 6.1 | $ 6.1 | ||
Weighted-average remaining useful lives of acquired intangible assets | 6 years 3 months 18 days | ||||
Developed Technology [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Weighted-average remaining useful lives of acquired intangible assets | 4 years | ||||
Noncompetition Agreements [Member] | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Weighted-average remaining useful lives of acquired intangible assets | 1 year 6 months |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets, Net - Schedule of Finite Lived Intangible Assets Future Amortization Expense (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Finite Lived Intangible Assets Future Amortization Expense Current And Five Succeeding Fiscal Years [Abstract] | |
Remaining 2019 | $ 33,330 |
2020 | 66,449 |
2021 | 58,921 |
2022 | 51,701 |
2023 | 41,202 |
2024 | 6,826 |
Thereafter | 5,374 |
Total | $ 263,803 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Provision for (benefit from) income taxes | $ (2,805) | $ 2,330 | $ (13,057) | $ 6,189 |
Increase in income tax expense benefit | $ 5,100 | $ 19,300 |
Debt - Additional Information (
Debt - Additional Information (Detail) shares in Thousands | Jun. 19, 2019USD ($) | Jun. 14, 2019USD ($)d$ / shares | Mar. 28, 2019 | Dec. 28, 2018USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2019USD ($)$ / sharesshares | Mar. 31, 2019 | Dec. 31, 2018USD ($) | Sep. 30, 2018 | Jun. 30, 2018shares | Jun. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2018shares | Jul. 01, 2019USD ($) |
Line Of Credit Facility [Line Items] | |||||||||||||
Aggregate principal amount | $ 690,000,000 | $ 690,000,000 | |||||||||||
Proceeds from the issuance of notes | 672,682,000 | ||||||||||||
Debt instrument carrying amount of equity component conversion option | $ 114,974,000 | 114,974,000 | |||||||||||
Transaction costs attributable to the liability component | 14,600,000 | ||||||||||||
Transaction costs attributable to the equity component | $ 3,000,000 | ||||||||||||
Anti-dilutive securities underlying conversion option | shares | 86,242 | 91,814 | 86,653 | 12,457 | |||||||||
Bank of America, N.A. [Member] | Credit Facility [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Credit facility expiration period | 3 months | 3 months | 3 years | ||||||||||
Aggregate principal borrowing capacity amount | $ 200,000,000 | $ 200,000,000 | |||||||||||
Credit facility remaining borrowing capacity | $ 150,000,000 | $ 150,000,000 | |||||||||||
Debt instrument interest rate, description | At the Company’s option, revolving loans accrue interest at a per annum rate based on either (i) the base rate plus a margin ranging from 0.50% to 1.00%, determined based on the Company’s consolidated leverage ratio for the four most recent fiscal quarters (the “Consolidated Leverage Ratio”) or (ii) the LIBOR rate (for interest periods of one, two, three or six months) plus a margin ranging from 1.50% to 2.00%, determined based on the Company’s Consolidated Leverage Ratio (“LIBOR Loan”). The base rate is defined as the highest of (i) the federal funds rate, plus 0.50%, (ii) Bank of America, N.A.’s prime rate and (iii) the LIBOR rate for a one-month interest period plus 1.00%. | ||||||||||||
Debt instrument commitment fee, description | The Company is also obligated to pay an ongoing commitment fee on undrawn amounts at a rate ranging from 0.25% to 0.35%, determined based on the Company’s Consolidated Leverage Ratio. | ||||||||||||
Borrowings under credit facility | $ 100,000,000 | ||||||||||||
Debt instrument effective interest rate | 4.10% | 4.31% | |||||||||||
Repayment of credit facility | $ 100,000,000 | ||||||||||||
Available borrowing capacity under credit facility | $ 200,000,000 | $ 200,000,000 | |||||||||||
Debt capitalized, amortize period | 3 years | 3 years | |||||||||||
Bank of America, N.A. [Member] | Credit Facility [Member] | Sale Agreement [Member] | Subsequent Event [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Aggregate principal borrowing capacity amount | $ 150,000,000 | ||||||||||||
Bank of America, N.A. [Member] | Credit Facility [Member] | LIBOR Rate [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Debt instrument interest rate | 1.00% | ||||||||||||
Bank of America, N.A. [Member] | Credit Facility [Member] | Federal Funds Rate [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Debt instrument interest rate | 0.50% | ||||||||||||
Minimum [Member] | Bank of America, N.A. [Member] | Credit Facility [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Payment for commitment fee, percentage | 0.25% | ||||||||||||
Minimum [Member] | Bank of America, N.A. [Member] | Credit Facility [Member] | Base Rate [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Debt instrument interest rate | 0.50% | 0.50% | 0.50% | 0.50% | |||||||||
Minimum [Member] | Bank of America, N.A. [Member] | Credit Facility [Member] | LIBOR Rate [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Debt instrument interest rate | 1.50% | ||||||||||||
Maximum [Member] | Bank of America, N.A. [Member] | Credit Facility [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Payment for commitment fee, percentage | 0.35% | ||||||||||||
Maximum [Member] | Bank of America, N.A. [Member] | Credit Facility [Member] | Base Rate [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Debt instrument interest rate | 1.00% | 1.00% | 1.00% | 1.00% | |||||||||
Maximum [Member] | Bank of America, N.A. [Member] | Credit Facility [Member] | LIBOR Rate [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Debt instrument interest rate | 2.00% | ||||||||||||
Capped Call Transactions [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Initial strike price | $ / shares | 8.31 | 8.31 | |||||||||||
Initial cap price | $ / shares | 12.54 | 12.54 | |||||||||||
Cost incurred for Capped Calls | $ 73,800,000 | ||||||||||||
Common Class A [Member] | Capped Call Transactions [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Capped calls economic dilutive potential common stock shares | shares | 83,100 | ||||||||||||
Common Class A [Member] | Conversion Senior Notes and Capped Call Transactions [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Anti-dilutive securities underlying conversion option | shares | 83,100 | 83,100 | |||||||||||
Common Class A [Member] | Conversion Senior Notes and Capped Call Transactions [Member] | Minimum [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Initial strike price | $ / shares | 8.31 | 8.31 | |||||||||||
Convertible Senior Notes Due 2024 [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Aggregate principal amount | $ 690,000,000 | ||||||||||||
Debt instrument, interest rate | 0.25% | ||||||||||||
Additional aggregate principal amount | $ 90,000,000 | ||||||||||||
Proceeds from the issuance of notes | $ 672,400,000 | ||||||||||||
Debt instrument maturity date | Jun. 1, 2024 | ||||||||||||
Debt instrument payment terms | The Notes mature on June 1, 2024 unless earlier converted, redeemed or repurchased in accordance with their term prior to the maturity date. Interest is payable semiannually in arrears on June 1 and December 1 of each year, beginning on December 1, 2019 | ||||||||||||
Debt repurchase price percentage | 100.00% | ||||||||||||
Debt instrument initial carrying amount | $ 572,000,000 | ||||||||||||
Interest rate used to calculate the present value of the cash flows | 4.10% | ||||||||||||
Debt instrument carrying amount of equity component conversion option | $ 118,000,000 | ||||||||||||
Contractual term | 5 years | ||||||||||||
Convertible Senior Notes Due 2024 [Member] | Fair Value, Inputs, Level 2 [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Debt instrument estimated fair value | $ 671,300,000 | $ 671,300,000 | |||||||||||
Convertible Senior Notes Due 2024 [Member] | Common Class A [Member] | |||||||||||||
Line Of Credit Facility [Line Items] | |||||||||||||
Initial conversion rate of common stock per $1,000 principal amount | 120.3695 | ||||||||||||
Initial conversion price per share of common stock | $ / shares | $ 8.31 | ||||||||||||
Debt instrument threshold trading days to trigger conversion feature | d | 20 | ||||||||||||
Debt instrument threshold consecutive trading days to trigger conversion feature | d | 30 | ||||||||||||
Debt instrument, minimum percentage of common stock price to determine eligibility of conversion | 130.00% | ||||||||||||
Consecutive business trading period when trading price meets required criteria as a condition for conversion of debt | 5 days | ||||||||||||
Trading price percentage of product of last reported sales price as a condition for conversion of debt | 98.00% | ||||||||||||
Debt instrument redemption start date | Jun. 5, 2022 | ||||||||||||
Debt instrument redemption price percentage | 100.00% |
Debt - Schedule of Net Carrying
Debt - Schedule of Net Carrying Amount of Liability and Equity Components of Notes (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Liability component: | |
Principal | $ 690,000 |
Unamortized debt discount | (117,094) |
Unamortized transaction costs | (14,512) |
Net carrying amount | 558,394 |
Equity component, net of transaction costs | $ 114,974 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense Recognized Related to Notes (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Debt Disclosure [Abstract] | ||
Contractual interest expense | $ 72 | $ 72 |
Amortization of debt discount | 897 | 897 |
Amortization of transaction costs | 111 | 111 |
Total | $ 1,080 | $ 1,080 |
Other Current and Non-Current_3
Other Current and Non-Current Liabilities - Schedule of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Current [Abstract] | ||
Accrued accounts payable | $ 46,171 | $ 22,669 |
Accrued compensation liability | 34,352 | 41,554 |
Accrued restructuring liability | 3,449 | |
Contingent consideration payable | 112,200 | 17,300 |
Accrued payable from acquisitions | 25,000 | 35,000 |
Accrued lease incentive obligation | 24,895 | |
Value-added taxes payable | 3,647 | 2,624 |
Other current liabilities | 8,512 | 9,338 |
Total other current liabilities | $ 229,882 | $ 156,829 |
Other Current and Non-Current_4
Other Current and Non-Current Liabilities - Schedule of Other Non-Current Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Noncurrent [Abstract] | ||
Contingent consideration obligation | $ 144,200 | $ 31,700 |
Accrued payable from acquisitions | 30,000 | |
Accrued restructuring liability | 7,613 | |
Uncertain tax positions liability, including interest and penalties | 10,424 | 10,065 |
Other non-current liabilities | 2,588 | 3,208 |
Total other non-current liabilities | $ 187,212 | $ 52,586 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation Expense Related to Grants of Employee Stock Options, Restricted Stock Units (ZSUs) and Performance-Based Awards (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 21,355 | $ 17,369 | $ 40,128 | $ 31,482 |
Cost of Revenue [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 397 | 564 | 681 | 995 |
Research and Development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 12,238 | 10,363 | 23,953 | 18,988 |
Sales and Marketing [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | 2,920 | 2,214 | 5,407 | 4,050 |
General and Administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Total stock-based compensation expense | $ 5,800 | $ 4,228 | $ 10,087 | $ 7,449 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Share Based Compensation Stock Option Activity (Detail) - Zynga Stock Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock Options Outstanding, Beginning balance | shares | 36,185 | |
Stock Options, Granted | shares | 4,647 | |
Stock Options, Exercised | shares | (7,720) | |
Stock Options Outstanding, Ending balance | shares | 33,112 | 36,185 |
Outstanding Options, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 2.35 | |
Weighted Average Exercise Price, Granted | $ / shares | 5.37 | |
Weighted Average Exercise Price, Exercised | $ / shares | 0.41 | |
Outstanding Options, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 3.23 | $ 2.35 |
Outstanding Options, Aggregate Intrinsic Value of Stock Options Outstanding | $ | $ 96,299 | $ 57,510 |
Outstanding Options, Weighted Average Contractual Term (in years) | 7 years 6 months 25 days | 6 years 2 months 23 days |
Stockholders' Equity - Weighted
Stockholders' Equity - Weighted-Average Grant Date Fair Value of Stock Options and Related Assumptions (Detail) | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Expected term, in years | 6 years |
Risk-free interest rates | 2.53% |
Expected volatility | 43.00% |
Weighted-average estimated fair value of options granted | $ 2.41 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Share Based Compensation Restricted Stock Units Award Activity (Detail) - Restricted Stock Units (ZSUs) [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unvested Outstanding Shares, Beginning balance | 52,482 | |
Unvested Shares, Granted | 11,091 | |
Unvested Shares, Vested | (12,577) | |
Unvested Shares, Forfeited | (2,248) | |
Unvested Outstanding Shares, Ending balance | 48,748 | |
Unvested Weighted Average Grant Date Fair Value, Beginning balance | $ 3.49 | |
Unvested Weighted Average Grant Date Fair Value, Granted | 5.47 | |
Unvested Weighted Average Grant Date Fair Value, Vested | 3.42 | |
Unvested Weighted Average Grant Date Fair Value, Forfeited | 3.37 | |
Unvested Weighted Average Grant Date Fair Value, Ending balance | $ 3.97 | |
Unvested, Aggregate Intrinsic Value of Unvested ZSU | $ 298,825 | $ 206,254 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Apr. 30, 2018 | Nov. 30, 2016 | |
2018 Share Repurchase Program [Member] | Common Class A [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Repurchase of common stock | 0 | 0 | |||
2018 Share Repurchase Program [Member] | Common Class A [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock repurchase program, authorized amount | $ 200,000,000 | ||||
2016 Share Repurchase Program [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Treasury stock acquired, average cost per share | $ 3.59 | ||||
Stock repurchase program, aggregate number of shares repurchased value | $ 65,400,000 | ||||
2016 Share Repurchase Program [Member] | Maximum [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Stock repurchase program, authorized amount | $ 200,000,000 | ||||
2016 Share Repurchase Program [Member] | Common Class A [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Repurchase of common stock | 18,200,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance, Value | $ 1,741,729 | $ 1,596,610 | $ 1,643,865 | $ 1,641,240 | $ 1,596,610 | $ 1,641,240 |
Other comprehensive income (loss), net of tax | (10,564) | 6,977 | (29,721) | 23,107 | (3,587) | (6,614) |
Ending balance, Value | 1,722,951 | 1,741,729 | 1,599,594 | 1,643,865 | 1,722,951 | 1,599,594 |
Foreign Currency Translation [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance, Value | (118,441) | (118,441) | ||||
Other comprehensive income (loss) before reclassifications, net of tax | (3,638) | |||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | |||||
Other comprehensive income (loss), net of tax | (3,638) | |||||
Ending balance, Value | (122,079) | (122,079) | ||||
Unrealized Gains (Losses) on Available-For-Sale Marketable Debt Securities [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance, Value | 2 | 2 | ||||
Other comprehensive income (loss) before reclassifications, net of tax | 51 | |||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | |||||
Other comprehensive income (loss), net of tax | 51 | |||||
Ending balance, Value | 53 | 53 | ||||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||
Accumulated Other Comprehensive Income Loss [Line Items] | ||||||
Beginning balance, Value | (111,462) | (118,439) | (70,390) | (93,497) | (118,439) | (93,497) |
Other comprehensive income (loss) before reclassifications, net of tax | (3,587) | |||||
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | 0 | |||||
Other comprehensive income (loss), net of tax | (10,564) | 6,977 | (29,721) | 23,107 | (3,587) | |
Ending balance, Value | $ (122,026) | $ (111,462) | $ (100,111) | $ (70,390) | $ (122,026) | $ (100,111) |
Net Income (Loss) Per Share o_3
Net Income (Loss) Per Share of Common Stock - Additional Information (Detail) | May 02, 2018Voting_Rightsshares | Jun. 30, 2019shares | Dec. 31, 2018shares |
Earnings Per Share Diluted [Line Items] | |||
Conversion of stock description | On May 2, 2018, our founder, Mark Pincus, elected to convert certain outstanding shares of Class B common stock and all outstanding shares of Class C common stock controlled by Mr. Pincus and an affiliated investment entity into an equivalent number of shares of Class A common stock. As a result of Mr. Pincus’ conversion, the remaining shares of Class B common stock represented less than 10% of the total voting power of all Zynga stockholders and, accordingly, each remaining outstanding share of Class B common stock automatically converted into one share of Class A common stock. Each Zynga stockholder now has one vote per share on all matters subject to stockholder vote. Following the conversion, no shares of Class B or Class C common stock are outstanding and the total number of authorized shares of capital stock will be reduced to account for the elimination of the Class B and Class C common stock. Accordingly, beginning in the second quarter of 2018, the Company calculated basic and dilutive net income (loss) per share under a single-class method. | ||
Voting rights per share | Voting_Rights | 1 | ||
Common Class A [Member] | |||
Earnings Per Share Diluted [Line Items] | |||
Number of shares issued upon conversion of common stock | 1 | ||
Common stock, shares outstanding | 940,224,000 | 861,111,000 | |
Common Class B [Member] | |||
Earnings Per Share Diluted [Line Items] | |||
Maximum percentage of common stock outstanding required for conversion | 10.00% | ||
Common stock, shares outstanding | 0 | ||
Common Class C [Member] | |||
Earnings Per Share Diluted [Line Items] | |||
Common stock, shares outstanding | 0 |
Net Income (Loss) Per Share o_4
Net Income (Loss) Per Share of Common Stock - Schedule of Computation of Basic and Diluted Net Income (Loss) Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
BASIC AND DILUTED: | ||||||
Net income (loss) attributable to common stockholders | $ (55,830) | $ (128,828) | $ (911) | $ 5,609 | $ (184,658) | $ 4,698 |
BASIC: | ||||||
Net income (loss) attributable to common stockholders | $ (55,830) | $ (128,828) | $ (911) | $ 5,609 | $ (184,658) | $ 4,698 |
Weighted-average common shares outstanding – basic | 937,334 | 858,666 | 931,813 | 864,117 | ||
Net income (loss) per share attributable to common stockholders – basic | $ (0.06) | $ 0 | $ (0.20) | $ 0.01 | ||
DILUTED: | ||||||
Weighted-average common shares outstanding – basic | 937,334 | 858,666 | 931,813 | 864,117 | ||
Weighted-average common shares outstanding – diluted | 937,334 | 858,666 | 931,813 | 890,285 | ||
Net income (loss) per share attributable to common stockholders – diluted | $ (0.06) | $ 0 | $ (0.20) | $ 0.01 | ||
Common Class A [Member] | ||||||
BASIC AND DILUTED: | ||||||
Net income (loss) attributable to common stockholders | $ (55,830) | $ (911) | $ (184,658) | $ 4,698 | ||
Weighted-average common shares outstanding | 937,334 | 931,813 | ||||
Net income (loss) per share attributable to common stockholders | $ (0.06) | $ (0.20) | ||||
BASIC: | ||||||
Net income (loss) attributable to common stockholders | $ (55,830) | $ (911) | $ (184,658) | $ 4,698 | ||
Weighted-average common shares outstanding – basic | 858,666 | 864,117 | ||||
Net income (loss) per share attributable to common stockholders – basic | $ 0 | $ 0.01 | ||||
DILUTED: | ||||||
Net income (loss) attributable to common stockholders - basic | $ (911) | $ 4,698 | ||||
Weighted-average common shares outstanding – basic | 858,666 | 864,117 | ||||
Weighted-average common shares outstanding – diluted | 858,666 | 890,285 | ||||
Net income (loss) per share attributable to common stockholders – diluted | $ 0 | $ 0.01 | ||||
Common Class A [Member] | Stock Options and Employee Stock Purchase Plan [Member] | ||||||
DILUTED: | ||||||
Weighted-average effect of dilutive securities | 10,803 | |||||
Common Class A [Member] | Restricted Stock Units (ZSUs) [Member] | ||||||
DILUTED: | ||||||
Weighted-average effect of dilutive securities | 14,093 | |||||
Common Class A [Member] | Performance Based Restricted Stock Units (ZSUs) [Member] | ||||||
DILUTED: | ||||||
Weighted-average effect of dilutive securities | 1,272 |
Net Income (Loss) Per Share o_5
Net Income (Loss) Per Share of Common Stock - Shares excluded from Calculation of Diluted Net Income (Loss) per Share (Detail) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount | 86,242 | 91,814 | 86,653 | 12,457 |
Stock Options and Employee Stock Purchase Plan [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount | 34,683 | 38,278 | 35,721 | 9,737 |
Restricted Stock Units (ZSUs) [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from computation of earnings per share amount | 51,559 | 53,536 | 50,932 | 2,720 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Contractual Royalty Payments to Licensors and Marketing Commitments (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2019 | $ 8,966 |
2020 | 40,886 |
Total | $ 49,852 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Minimum Purchase Commitments (Detail) $ in Thousands | Jun. 30, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2019 | $ 13,077 |
2020 | 20,400 |
2021 | 9,513 |
Total | $ 42,990 |
Commitments and Contingencies_3
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Commitments And Contingencies Disclosure [Abstract] | ||
Uncertain tax positions liability, including interest and penalties | $ 10,424 | $ 10,065 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Leaseback Agreement [Member] - Subsequent Event [Member] $ in Millions | Jul. 01, 2019USD ($)ft² |
Subsequent Event [Line Items] | |
Lease back building | ft² | 185,000 |
Operating lease, term | 12 years |
Lease option to extend | true |
Lease option to extend term | 22 years |
Operating lease rent | $ | $ 10.7 |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Percentage of increase by an annual amount of rent | 3.25% |
First Option To Extend Lease [Member] | |
Subsequent Event [Line Items] | |
Lease option to extend term | 8 years |
Second Option To Extend Lease [Member] | |
Subsequent Event [Line Items] | |
Lease option to extend term | 8 years |
Third Option To Extend Lease [Member] | |
Subsequent Event [Line Items] | |
Lease option to extend term | 6 years |