ZNGA - Earnings call transcript Q3 2017

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Operator

Good day, ladies and gentlemen, and thank you for your patience.

You’ve joined Zynga Third Quarter 2017 Results Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference may be recorded. to Investor call Ms. Relations like host to now of Director and would turn over the your I Corporate Finance, Lau. Rebecca Ma’am, you may begin.

Rebecca Lau

welcome quarter and Zynga's call. you, Thank to earnings third

Chief today Financial Chief Shortly, questions. we the Frank me Griffin, up Officer. with open for call and Gerard the Gibeau, On our call Executive will Officer; our are live

results as in forward-looking elsewhere for further may filings our future our business to the of course related our the from today's During materially recently well SEC risk clarification. for and differ call, Form well strategy results statements performance. review as expectations we as our XX-Q Actual our will make Please filed as plan in predicted. most factor

addition, discuss we'll In also non-GAAP financial measures.

and reconciliations will a slides not measures financial conference hours. our on earnings be at to non-GAAP Relations to and non-GAAP audio letter, substitute of GAAP replay Please reconciliations when include in be our our superior measures. being sure are to be for these will few look earnings XX-Q, a is filed, intended and the our website call as results. available or This Investor for GAAP Our webcasted

call turn over for I'll remarks. Frank the Now, opening his to

Frank Gibeau

million revenue call. quarter afternoon X% was you Good years. million performance $XXX.X up and bookings year-over-year. by and above $X.X our above year-over-year. Thanks, and Rebecca. our best and XX% $XXX.X past million up a for million We guidance joining thank strong our had revenue delivering Bookings four $XX.X guidance by QX in This were our over

million. significant in the XX% consecutive represents went our up net the Zynga XX% time We we public bookings. for high Mobile total $XX.X quarters. that Our bookings, revenue first quarter delivered This income and and now an and mobile income has respectively. user all-time hit net of in two growth revenue pay XX% since profitability achieving of year-over-year, represents both delivered

$XX $XX.X our million year-over-year in guidance. million, and quarter EBITDA up the adjusted Our was above

cash a flow by operations of more from improved track than $XX.X $XX.X the has ago. million doubled remain year our year-to-date on to from goals XXXX. deliver Our We margin end million, up to

performance Zynga our and the Friends. to CSRX of Words anchored franchises: due forever quarterly continued our live Poker, by With operations Our was strength

our and our continues to off. through in Specifically QX bold bold great franchises beats strategy are franchises. innovating significant our helped examples drive of growing three to beats where pay There forever in performance

Zynga driven The performance on mobile XX% First, revenue delivered beads, leagues. Poker’s by history popular were up bold two in and Poker with of challenges team's and games mobile year-over-year results continued the year-over-year. most Zynga quarterly XX% up its mobile on focus highest franchise bookings innovating

mobile latest of exclusively event, the six furious marked our The which Dodge film. beats great XXth up CSRXwith bold featured grew and the Second bookings by from fast supercars also up with by team occasion. the to Furious Ferrari’s CSRX players. in developed The driven XX%. had quarter revenue and in a another mobile QX of exclusive events CSRX sequentially was and X% for performance for series The Ferrari anniversary Demon due largely Fate

and million with to celebrated introduced bookings than of Friends mobile quarter, game, its been September up social past with XX beat With Since game XX% X% the This Xth Words which in mobile Words the sequentially pop launch inspired new revenue feedback. Third in strong our Friends, added launch, more we up and delivered the in the dictionary, which words dictionary player played times. new bold culture many social sequentially. performance anniversary by With have words XX,XXX new a

to four to beyond, we XXXX ways. grow and expect forward Zynga As in we look

science utilizes a expand a to our year, our innovative develop recurring of to bookings bold art we'll content and features will and from believe beat new growing through of in services services combination live live First, on Zynga vast predictable mobile live audiences. more and revenue In engagement continue grow focus strategy. increase our of and given the any designed to long-term portfolio to revenue comes this majority over services. our stream commitment and We provide the for long-term. Zynga unique

Second, creating to forever we through foundation game build plan new franchises. introductions goal the strong services new our on of live with of

licenses approach designed game audiences. extensive consumer taking ensure approach testing properties, that teams launch engineering how to to with intellectual global and new and development brands combine new will Zynga We're potential a to games developing Our soft strong rigorous to reinvigorated where to with appeal we're new strategic hits.

waiting franchise by I’m of giving skills requested challenge As part for This and next Friends week the share friends’ that new solo audiences. year sequel chance history features players progress this by X this of includes is some new a a to launching to players. they're of adding With global on improve excited their popular the move. most that effort, we're builds that their Words our This to while a eight

planning is the become millions has strategy of its keep look the to for ramp lives team a speeds Additionally, daily bold and Word Words forward to of competition Friends fresh and and to versus to X team around up the modernize feel. Friends. forever We've years player our With we're players. following also experience game With launch that the lightning an play new come. round beat and franchise play We pace introducing of in will way people's that offers to proud and part We're look world and supporting the fun the team accessibility updated steadily featuring this increase ambitious months anticipate brand for the an all

new Express the all in XXXX. developing and Strategy, and second expect titles launch in Action of in actively Invest we're to new addition, half of games Casual In categories or these some

that accessibility instant is an how imagination games iMessage the in Facebook and new gaming our way potential the and like and and intend shareholders. third with we the cars have grow of is create we're and drive bring ARCore We the use AR live augmented beat emerging world flow gamers balance value Fourth, and our operations of Zynga audience the will opportunities Zynga Later the growth to real be that mobile our ideal general reality social at positive around believe for like through from with allow captured going virtual game ARKit environments. gaming fit leverages chat bold investing in sheet innovative Apple's leadership, this world the M&A With The platforms enhance by CSRX we're by connecting to reshape games. it's reality. of experiences. to strength Google's a to augmented in accelerate mission new excited world. teams collections of month, and Apple's explore car Apple's to we’ll in particular nature ARKit by launching platforms cash blending to to players

will into successful Combined and entered the Okey Poker mobile Zynga add to and well games our of proven also and franchises additions portfolio the growing and Istanbul-based into this our of the our such Rummy card Peak's Plus strategy will Gin Peak and give that Zynga Zynga to Solitaire, evergreen margin world These direction. studio near-term excited to the around over that of with an talented spade, mobile Plus, talented bring card agreement enhance broad accretive the pleased goal with Our We're casual mobile largest studio long-term. the Games. closing. have largest the our millions These franchise millions teams card Rummy strategic will popular Plus games the card the to in portfolio. as appeal to game build games DAU world's to recent acquire as of team is portfolio world games our and the of Spades we're be growth to upon to of as Zynga they people goals. continue Today, audience adding announce align addition we've games on our to family. welcome This will

with As so can and know over to committed to the our value. guidance. more to with line more achieving long-term. our about peers he but with we're and there turn margins shareholder further ability excited the progress, I'd We're the create Zynga’s year, turnaround happy we end the discuss potential QX growth is approach QX work do. Gerard to We call over And that the our remain to that in our like of

Gerard Griffin

excellent in driven management. delivered quarter top-line our by live QX another Frank. from effective We and strong performance Thanks, cost services

year-over-year. and was $XXX.X The bookings is revenue the million exceeded revenue ahead $XX.X up comprised guidance of million, which year-over-year. Revenue $X.X a and net deferred bookings guidance Our a our in both in change net change was our of XX% versus of million; and our million deferred up guidance. guidance of X% Bookings of release release $XX.X were our million net of of ahead $X million. revenue $XXX.X

primarily Poker, CSRX mobile in of delivery Zynga Our the continued and With Friends. live over driven was Words strength by the particular services quarter in our

Turning our revenue operating would expenses operating I operating $XX.X FY operating impacted In consideration QX year-over-year XX% by to million comparable $XXX.X expenses. the $X.X XXXX of XX% $XX.X year. driven offset out bookings year-over-year a million XXXX partially spend. an prior of XX% were credit expenses compensation X% negatively down representing revenues. items from by expenses, in asset higher GAAP XX% There down contingent of that marketing prior our of were million, revenue of down FY offsets G&A expenses of million, prior QX down $XXX.X and year. operating from non-GAAP or no by from Stock-based was QX operating by representing XX% QX million X% in lower in in the total, down FY $XX.X items Non-GAAP in were million. XXXX in represented these GAAP revenue XX% revenue GAAP like was down year-over-year X% of the expenses to bookings XX% call R&D were intangible of year. partially decrease The of representing impairment

better contributed All income of million improvement a to $XX.X of net year-over-year. million, than of $XX.X guidance our and million an $XX.X this

$XX.X in by million million turnaround pleased with company adjusted year-over-year. above improvements progressed was net making as $XX million. deferred through $XX.X We're and This million across we’re revenue, we release $XX.X year. Our the which up EBITDA, this the was our guidance includes

more foundation in we continue to and margin achieving focus to a with line future peers with XXXX stronger as over the of margins end delivering much on the expect the by our goals long-term. We for XXXX improved end

ended on end marketable $XXX quarter QX of cash in the Looking we sheet, operating was million with generated increase $XX.X flow. sequential This principally XXXX. million, to we up $XXX the our FY securities from and million cash the at balance of due

several $X release our of of Net versus million XXXX. a will $XX in offset On XXXX of web NaturalMotion revenue be related net in million our we $XX benefited million million versus follows, to million QX a Quarter-over-quarter, QX in to business. of note of party income FY $XXX guidance. expect Turning loss bookings would $XX by is as FY QX grow XXXX. closeout user million growth factors to games. both QX more of XXXX. than revenue $XX.X live versus deferred from we $XXX.X and increase by and guidance basis, I FY our one-time net versus versus that our technology of licensing of a some $XXX guidance, older XXXX, million for of mobile to Bookings FY EBITDA and QX FY FY consider EBITDA There in QX XXXX. also in million to advertising net the mobile services. Adjusted million million third in declines $XXX.X revenue QX advertising QX $XX our are driven anticipate in pay adjusted our of year-over-year in like a

with down our margins to line gross in we to QX and year-over-year expect in and in our expenses percentage in expect be our absolute be QX We performance operating terms.

mobile today term announced expect and purchase Peak to asset $XXX margin card acquisition mentioned, planned we we of our studio million Frank Games. studio for price our in will near goals. cash this the The the is of As accretive game be

talented this Zynga the family. are bring team to We excited to

our in transaction We QX, to included have late expect in QX, guidance. and QX the close not

are mind you your as number to I'd a for in models Looking you keep at of XXXX, there like points that tune year.

majority should will Our revenue services, of sharpening enhance mobile committed our remain driven by in bookings operating profitability be be our model, top-line vast which our live our which the to XXXX. for further the services. will and of sustainable live responsible We

web our We games. growth offset compared QX mobile QX our to and in decline the a partially previous. experience be in and by expect revenue seasonal decay bookings We mobile older in to continued typically the as

Express and games of new the new second strides Strategy, Casual and to making some in developing In up to launch actively our relates XXXX. all year the categories was strong we in expect in unlocking be are excellent Zynga. it or turnaround. in As games, Invest Action another to of in and these in summary, QX value what shaping quarter we're is a inherent great titles half

ahead and to to Looking beyond, lie XXXX With of your take excited we're questions. happy that us. the that opportunities we're about

Operator

[Operator the O'Shea you, first Jefferies. Thank sir. question of Our from Instructions] line Tim of comes

Your line is open.

Tim O'Shea

mobile Yes, so card with studio Games, second the we've or – year. card is it's Peak casino-type past from in the acquisition this seen the

So mind, optimism should And think pillars us what's Casino of four help considering like assets? and M&A now? right there this the integrate Social growth with could the genre from the fourth we what's strategy acquired Is then, I about growth then to expect these the it and further, just actively as how that maybe we drive in one? might you're thought more time? you with assets behind pillars, driving – something understand transformative understand one more Thank over one of Or deals you. your of types the leverage

Frank Gibeau

this Tim, Frank. is

about card category cards. Poker sensitive me new in lot overall is spades, in in adjacent development, an a games a development, what great a the learned we've about and last feature we've seen little audience global rummy. into as to audience. types content card invested There's Poker and And games. like X.X years, some by investing lot the been that over a a results. different learned of we've crossover the highly plays it's Let like we've lot start It's of talking bit of We've players. new It's

Friends an as was card there the Casual there saw and in We at well. With also, opportunities Slots for business, when our had we affinity and also Words looked players that of those business both our crossover games categories

for multiple opportunity, period building portfolio that the at long that engage overall we So we time of them a when the we a of time that look the can by offering games, players right believe at card across types we from give can very right they're as advertising audience do to doing. from new in a enhances advertising cross-promotion also looking overall and marketing And and or size for we the standpoint. and platform what a addition it can builds after something an to for they're go

success a together long very of for studio time. like games in with in Peak And this with because both been of their a also had We have But They're also very lot world. franchise. really they've very, at that liked part the been done their the of in market, They're global more orientation a talented. low-cost rummy and well Okey they've spades. local they've

mix. have expanding that with like the some affinity regional also the but of globally, in already for we products hotspots an So have looking that we both other does

company. Peak a are with also, with that's plugs Games And transformation, really mix. it's we're which overall seeking for, I franchises the at as or delineation. that's talented particular into think kind that longer And and term, are it's We're we're multimillion franchises. kind nicely on same even for in of together. – looking been that based DAU see into that, talent. first to We're assets bring asset, What you're a looking that have in then we're we're teams for from that card looking this teams if that direction of the going that, In foremost, can tuck-in case, scale, at our the strategically better. that they're really beyond teams studio, interested standpoint we're of whether looking our a assets talented going in we of not portfolio that a have types

Gerard Griffin

as that. we're studio, define add already great of much breaking bookings deal looked EBITDA that a me just time perspective, they're obviously, our live And we with getting From accretive talented this overall games a an When of a group strong a in sense it at the some gave the from that that portfolio developers with I'd of existing have are are in perspective, financial this generating XXs games a our me a we of to worked very to and portfolio. XXXX. studio, portfolio into contribution. internally affinity And interesting goal for that very decent

looked multiples it it And So to perspective, we the creative perfect financial and from economics a from at were sense. when perspective, very attractive made a here us.

So this from was to our it – a addition perspective, good the portfolio.

we we've approach going just been the to tenure and in see as creative trying fundamentals really that But or from to will impressed look year, are we year, natural structured any option. acquisitions in transformation have whether And to both a you creative how company internally. evolve Similarly, see can my overall, the platform. emerging Frank say, forward, Looking here, evaluating believe we're a to over you over And in how business an it's to been market. take But we very is with in the key teams managed to that we I've over transaction. our did M&A obviously an evolve that see this now tell chat the lot we perspective, two of have enhance a portfolio a we it over in time. us if said, that's Messenger, that of can of can that card And help Casual what I a will opportunities last platform, already I way, deals. here we're very I've strong but the them to robust

Tim O'Shea

it. appreciate I Thanks,

Operator

Thank you.

Olson comes Piper question next Michael from Jaffray. Our of

please. question Your

Michael Olson

Hey, good afternoon.

that early, but XXXX, regarding release, will this Peak years? how mobile what And Peak new the for over that impact you at can seen it much expect different the acquisition, run the point excluding add studio past Thanks. low or second, then, have of was? you'll it's the anything if press of sounds I least in but of to I’m or mobile single realize revenue Is year. remarks reason not cards in there the business titles studio, we've later it high sure the growth rate couple the to double-digit On some was kind the in than like XXXX share to

Frank Gibeau

We expect near-term other contribution that I basis economics EBITDA than the will to didn’t exact we an disclose accretive our be did from on Peak indicate the goals.

live be service our on live that will in think about basis service this portfolio And Peak that deal fundamentally by portfolio QX. part As I'm the XXXX of we'll as XXXX, you driven characterizing the portfolio. close

relates it As to do as we a say, are the intend to And number year. games. new, of about in the new, to launch think of new games way half the we second building I new

from new we're next with from the on about the them. Peak do The me, the the we more we will certain to of the a at we've the year Friends launched around we'll overall services, Words we're called extent, will but listened the long to I going if our take we of next year. as grow next way, come majority will those. will contributor, about if chat year. only long-term key a successfully will launch be the look to in remarks, to they opening but bookings. Mike, kind games will talked aggressive would AR. live half, the – as standpoint, a of wouldn’t as term be contributors as – I be if contributors is in business lot live – and excited and importantly For in first well about vast XXXX, live any think very that contributing And revenue second as to service a the an there want the thing into But present small we obviously point, Ger's out The be an a be XXXX. We significant it's front, but frankly, M&A you that themselves, be company. add they opportunities you games ways And to part those is X those our is, you we have optimism four about momentum grow

We market aggressively commitments as there. a requirements will the make investors, There's dynamic we've opportunity, and moving a to conform sure present to made those our multiple across but out that and we're it's of themselves. opportunities they management genres and a lot that to team

Michael Olson

thanks. right, All

Operator

Thank you.

question of from Brian next comes Nowak Stanley. Morgan Our

open. line Your is

Brian Nowak

I taking for thanks have Great, my two. questions.

improve the kind on next where marketing. services like part the tackling – for and on Peak live you Then overall monetization? us can the live your of one, of is Just by wondering, see Frank, to first second year. driven service Games, blocking user opportunities give still examples of you core of the one, the it cross franchises, incremental sounds Was this couple a

mobile Frank, be to Just you of mobile confidence these gives to can and of the kind in what Peak users? going kind talk that Thanks. about of able your just management, years some you to game you're challenges and market game game cross of

Frank Gibeau

Brian. Sure,

On we think point, we all that first have the services. of live in opportunities

to come If Words Words With ways that Friends game we're you going squealing open up we're adding X, to all believe play new opportunities we look that to is new Friends at With to how the add but more PvP like function. beats the out there's to feel opportunities case depth growth nice CSR, this we've seen of to we year, with In still year. next really bold

last looking those continue Wizard from feature go you or you line opportunities will And able there just our And or manufacturers from see largely Jackpots X lot Match a two; that here staffing a titles. more whether they a Oz as where new are we and system player how bullish at to after Match doing versus advance quarters unfold impact. multiple so the week of because of Magic compound year We're and make released challenges. it. more beats to quarter-by-quarter an can So, consumer approach accordingly. these other and each game, position look quarters really on to more We're choices. We're beats. go that getting Titans long-term and sure A in kind to we're view bold add bold basis. on impact it's companies we’re that on we right just build Dawn at there, a of more if the being well down created up as the to car next over about player Poker We is the we've a excited example is research as new into process how of the year. resourcing or and as look

we and value So feel new internally actually with game cool and this Zynga. really think approach that development. inside process it’s started and as getting this we're like like We just game unlocked of development a lot live innovative about It's treat it. we

In needs really them. front it of the be distant of Action there is card Strategy very to important for affinity that a the in and cross-promotion putting terms It's promotion a cross the game of in look, thing RTS that an front absolute hard player. Casual of you're component to take piece, put

is interact social offer dynamics and in incentives get over, strong you Words of if a or cross-promotion them, and Poker cases. Slots and especially the percentages those do behavior in that how put consumption Friends But find So curves see there low their to them if together the and and in are ability to with move With and very you they you Solitaire player with positive. the player,

what's that's decision-making the there. So strategy the and driving

Brian Nowak

thanks. Great,

Operator

you. Thank

Our Sebastian of Baird. Colin next question from comes

line open. Your is

Colin Sebastian

model lengthening think, more there's I enough internationally the question, the is growth sharpen to rationalize you're but I and, go expense you there course, how still that year? or period, could expense room to to a live In the But is your Great, this mean thanks some might particularly base I take the it as services margin out you. pursuing just going as to guys. Or hoping be hit the when of down dial perhaps through does opportunities. events particular, of am also Thank room you base platforms. those interesting growth some new as, the targets? and well Good as much original quarter. describe know isn’t there

Frank Gibeau

operating we’re lifting would the low at what start in of And particular, sort our prioritizing Yeah, way call done is, the much for around operating the as as managing we the looking lot more are turnaround at model. heavy past XXXX, XX-plus very sharpening looking of plans and I a revolving model it's the months. into it’s We've hanging XXXX, work over we And live more new our areas our and innovation Friends we spend. the areas or take than we've we we've where, new where to to Words against looked or new other into there's more against And R&D to investments bottom at line, we've flowing need invest in technology. – With into games, taken in said it directly areas. into rather chat need experimentation

And I majority to bold flexibility, our in beats where what largest of building spend. terms spend operating need the people look would we we've is in the developing say games that's is, the the right we live got into or operating new component of at focus into against spend, my to my feel So model and prioritize levers, terms and of when the operating of games. and you

where of investing we're weekly marketing, at basis. basis that is a group on a smart and and expense we've largest day-to-day how that very next money the nimble got people look Secondly, a

we sort is managing The aim progress terms that. that there continue So of a manage some key is momentum. the P&L. the – of goals, to as in our over and margin of lot flexibility is fundamentally middle to We've made near-term of towards the it year how last the

as have long that resetting we're But bar. in delivering the we've feel managing moderate near-term towards should you more you you're margin be expecting will is of hockey you growth XXXX, operating expect investing, will say, into percentage as what my prioritizing bookings. and spend. handle and we're an goals. major services our We in be in obviously And a got when any step-change stick as growth And a we're acquisition, of middle any The but lines. R&D on how us that only as – be I come the will we growth the where to shouldn’t comfortable our bring see live in marketing, can

Colin Sebastian

And maybe one just quick Ger. follow-up,

guys at that how more, that's it looking you you Thanks. markets in still valuations more or at sounds rational overall a up looking you the – possibilities opening seeing and like are are level and market now M&A the overall? environment would You're are more describe

Gerard Griffin

market I – over the all a the little still is think it's bit place.

we team active that of Corporate are lot very looking opportunities. a So at Development have a

there's worth. that I ups of have their still a if particular, there in that think terms in expectations out you start think high lot companies about – of

at building obviously a spend lot the the technology or we so into. the they're time looking of And building they're teams, IP

So, it’s I strengthen to look for fit that I time within going a areas rich immediate place. or to that opportunities say opportunities. think, we're take it’s right enhance. looking the wouldn’t the we’re dynamic to our market And with

Colin Sebastian

Thanks.

Operator

you. Thank

comes Our of Sachs. Merwin next Christopher Goldman question from

Your open. line is

Christopher Merwin

All I questions. a right, of couple just thank had you.

question that conversion. in per but little DAU, revenue more a First that bit improvements was was than by is year-on-year, offset

do you Friends year So announced think drive bit demand. to Words launch I paying in the over recently little you next room the do also talked bookings user conversion think for With advertising you a per then Or moderation see time? lever? higher and And be you will bigger about

more are to do maximize advertising sales So title? this Thanks. the just over you about with strategy the in to advertising And direct can you for time? opportunity talk looking

Frank Gibeau

Frank. and paying is conversion this user per room average – Chris, the player maneuver Yeah, paying more user. bookings to per There is revenue in in

to going introduce modes. we're new start So to

create the like Friends be the week, we'd But the there that Friends we're new that in revenue to more out build boost that we the the in economy still complement game. case With that on new to value have example the X to term. opportunities this in the come The For of launched starting majority to players for IEP advertising and With will with long Words from near game able term, exchange advertising Words against. in over of will

everyone upgrading the else. there's our into a If be at advantage this was advertising level services, came information information slower you year relative look because of has is the the We've the yes, to about a Google little distinct or inside able lot of more systems a to with market. first a provide Facebook which overall, part advertisers that been that consumers inventory a of to pricing on

next From advertising make company. transact video okay that and game my of allow deal think display tools some business. did that overall, investments for down the should these robust total is in to based the our those from and don’t making for us and that percentage that continue units, continue strength the the And mix with XX% of that And problem be so the Unity, component to to we’re new key XX% to us, way When advertising as we will seeing down. me. with we’re this perspective, area mobile add revenue around to in terms that value players to DAU that a investment year our help we by have advertising of grow you inside the investments have year, look to create year continue that to last platform I a overall more we us but source and our at as company. an of a start going us with I best should advertising different you're example, of maintain that's a to But

Christopher Merwin

thank Okay, you.

Operator

you. Thank

Creutz Our comes Doug next of Cowen. from question

open. is line Your

Doug Creutz

thanks. Hey,

one. a small Just

a benefit quarter. some you out technology think, a how I business called You a of in sense said shutdown was? revenue of big that NaturalMotion you Can the from, give

Gerard Griffin

million. $XX

Doug Creutz

you. Okay, thank

Operator

Thank you.

Douglas comes JP question Morgan. next of Our from Anmuth

Your question please.

Dae Lee

this Words My This launch instead you've of to seen successful CSRX. try you plan X secondly, Thank share around launch the to is question users is with forever reengaging realized could on sequel I your sequel introducing your title. you in strategy something my With in And Dae like past for existing to franchises And your Lee the forever then have the updates for Poker. decision around other is Doug. taking to franchises? Friends your you beats question. the for that bold your then, new in

Frank Gibeau

and new collection When this moves features of you it. actually bold beat place a sometimes course the game is Sure, that level rises where Frank. get chart above a can you into a for of sequel and frankly, a a and content

harnesses that. technology CSRX, to team are And critical time a technology, the it new game. to with we conclusion that play, interface, we've was that sequel. that case saw features at modes. was play, you the content such was event added a new mass So came the to of was the It solo looked There that as in we a there new new and of user bunch

And beat in new had a believe is, to Words that, had players with in might to want So divide together appeal risen new offering Words never in didn't more case though, had a a of would that that also to we what Friends is felt Friends, players. lapsed. important bold a existing critical With quality thing product. activate not. engagement a to community. It reactivate would put And because that point sequel potentially us would the that we the I successful in level that, players With that new sequel-level out would our One of do we it that to way that played was it the

an and to new that can Friends right they who in own risk do in time up games With when it and play So their fact, that. take in time be We X. players didn't to if pace of want With Words a spent to audience, Words abrupt games you migration able will. the can bit and Friends feel felt the community want do risk at ready they a that backwards-compatible, playing fair they didn't their in against Friends Words And getting With and are are that breaking actually we we now, to own to migrate be people the so like

that reactivations, look three terms key we we any at beat bold In build, segments. of

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system, ready through is types for beat Poker could the we But of this With all is franchises year in So content, not games sequel X we other And about beats of steps sequel. need these a great, think process and there – a said up. week is like long are the our are just very opportunity Friends for timing a in a quite to a when the in talk not is probably and bold doing time. player right well Words was game that the of a go over we about felt strategy the what the as the that use level mix great next bold so. being these a course or

Dae Lee

you. thank Great,

Operator

you. Thank

comes of Our next Schachter question from Macquarie. Ben

open. Your line is

Ben Schachter

are What still? is what the is analytics for these broadly, about you about time? guys just days you and and thinking are you platform is it the how there needed business? outsourcing how pieces how Could evolving important over Just analytics talk

Frank Gibeau

very Zynga, a the and both team. the it's awesome. to half. a products great as inside if data and and how science you talent about at deal from And as socially be analytics quantitative inside learned a I've over excited last pretty the I've out, I capabilities standpoint, that been of well part really and a year Zynga management really thinks Well, from blown to away the with I was product came of organization. look the And quality the

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new use across there's to many We level places We So now machine games. right and think with we inside on We're learning expanding our the expand interest a do that. relationship lot in capabilities. at also social in ways understand can of a looking players the that business.

our of us allow lot a and there's our opportunity to beat of data strategy. capabilities processes continue inside our to enhance product that So and would expand our bold sciences to management

Operator

[Operator you. Mike next Our of Hickey question from Benchmark. Thank Instructions] comes

is line Your open.

Mike Hickey

Nice in. for guys. getting me quarter. Thanks Hey,

makes maybe market Are some Casino. big all the help on lose of sort market. obviously, you've And here Seems are pipeline But me course work seems bet try big questions. It and And like I obviously, a two guess a the left the opportunity. of could if you competitors managing of to and your bets resources characterize seeing second of first and Just one that asset of doubles at so question company or have construct have and is base? game for Obviously, mobile grow OpEx done in terms majority given in we're in of area. new if your that the singles of but in to is that feels mapping releases. the historical don't home the something obviously, a sense, track terms kind terms you you maybe industry can franchises. of the true, to guess of the you to and like good get want And – I that's that history we here. to Social excited also of run. of always your dead us But category, is make looking still one that massive in then, pretty least optimizing been forth. it's a

manage your So curious you. that on asset? Thank you sort thoughts grow of to just on how

Frank Gibeau

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brands our strong pipeline we're from have Zynga perspective, so category teams, with properties the we in have brands, building with especially you intellectual And of and ourselves coupled Invest very here, that a audience towards Express that said, The like opportunities. have great Villes titles large talented

genres with goals. company investors, the we in why And first our but have margin that the Social position with building what are think believe don’t deliver With and our out those turnaround have ops. of some been sure, Friends on the for work Action live and direction that where in at with focus on going order a in, that's of as key we kind doing Words are we has this like our should you personified We like Casinos. about Invest Casual relentless of to we really genres that in put growth one our in When to Strategy, we're Express, part we looking

important us. for is Casino Social an category

and Poker is competitive business. Slots very Our business a

the about a haven't We lot business. talked Slots

or adding we Wonka a But in more been to as of Diamond, opposed games whether lot builds there we it. It wanted had, those slot of of news Oz new Rich!, out really of have it. take Hit that portfolio We to product was it machines Black new or Slots alongside investing the releases, Wizard it of terms in in games terms

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XXXX, new AAA hits. pipeline in with XXXX, some produce second XXXX the in that's coming half we big So so ideas, we’re terms that teams in investing the actively can of and of

Mike Hickey

Thank you.

Operator

of comes from Wingren of the Capital last And Evan line question Markets. KeyBanc our

Your line is open.

Evan Wingren

you. Thank

Is So, Poker the the engagement year, and out mobile rate it and that Challenges called all a to bookings key us help would as say specifically? highest Leagues? fair by bookings Challenges and beat driver. and being secondarily, how growth accelerated be context That you scale to And in you is Leagues understand year-over-year this primarily of driven potential can you're about the helpful. then, thinking Thank jackpot's you. growth

Frank Gibeau

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harder Poker works inside additional than We are business. because others, the And beats actively than some bigger working know, are bold beats others. it’s on some you entertainment, bold

staying our old that are It's is And we’re to – we so It's franchise. commitment ten years it. going this forever at year. a

too it’s and continue going great growth, early awesome but coming. we’re will to it. to growth tell seeing a add to but be be are We Jackpots might ideas more there driver, to

Operator

this Rebecca At to to Lau the call remarks. like I over back time, any Thank for turn you. Ma’am. closing would

Rebecca Lau

earnings joining come. forward All want over call to you to We with right, to thanks weeks thank Lucheif connecting for look we today and the our everyone [ph].

Operator

Thank concludes ladies This you, you and today’s and gentlemen. thank Ma’am, conference.

You may disconnect lines. your

Zynga (ZNGA) 8 Nov 172017 Q3 Earnings call transcript