ZNGA - Earnings call transcript Q3 2021

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Operator

Thank you for standing by and welcome to Zynga's Third Quarter 2021 results conference call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. now Vice hand in President Rebecca would to conference Corporate I Lau. host, your of Instructions] like the to over Finance, [Operator Investor Relations ahead. go Please

Rebecca Lau

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

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

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

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

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

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

Frank Gibeau

Company's and operating mobile afternoon, better-than-expected to history. the and the on leverage. quarterly call. track We Today, top-line results, best performance Thank are everyone, delivered are and ever you, and with our Zynga's we Rebecca. our audience strong in to revenue including Good welcome QX largest guidance full-year bookings annual earnings finish record XXXX raising in QX

record third a difficult tremendous expansion. delivered with of to XX% teams This with X% ahead our up million ago. XXXX [Indiscernible] strong by year-over-year. drive quarter guidance, and ever performance QX, multiple year our bookings We our a growth catalyst comparison was year-over-year from a and $XXX $XXX services QX for in beyond are highest including of results live place up our Starting continued well-positioned million, up revenue against

by Our top-line capped quarter year-over-year. beat Zynga was from Rollic’s million up million driven DAUs by XXX% XX% off mobile particular And average portfolio. and XXX first-year also performance AMUs average our strong hyper-casual Rollic’s to year-over-year. XX phenomenal up to at results. a another standout In drive helped mobile a advertising This

like Moving to year, QX some Zynga's and catalysts. next near-term highlight I'd growth of to

expect build momentum fast-growing services as head we First, developers The our closed acquisition. live diversified to Golf another portfolio. highly This of our to We XXXX. our into StarLark we adds services Rival. live recently talented franchise

by accelerate more We to further management, capabilities. leveraging acquisition also see Rival’s product Golf data opportunities and growth Zynga's science, best-in-class user

Dragon addition, Spells, of in we Quest beats and an including in Empires the prepared Harry Merge Missions in of Blast. Dragons and fees Potter: have in Bolt slate Piggy Bank Puzzles introductions and outstanding Alliance Fantastic QX, Puzzles, Toon for In

Second, respectively. never we to game free our re-imagination and worldwide, expect growth top iconic and new X launched be already has to has franchises App most the FarmVille the and as downloaded X number game The strong and iPad, been in stronger. Last the in week, iPhone we a of is X game start pipeline and Player well, X number Stores, positions contributor a very XXXX positive U.S. been feedback beyond. Zynga's has X platform. tremendous off for reached of mobile a FarmVille

game Wars we launches Universe, unveiling Star cross-platform Hunters in Wars and Next XXXX. launch technical when we the features new be gameplay Star characters in unique are soft The mobile markets. releasing play modes our are new in franchise, into week, available several first that select title will the

title popular franchises. soft are merge Gram with category performing of are proven where their of that developing track is topping the makers new by Blast. developed us player versus talented players X two Match launch. have games battles. chart additional Peak, player records hit Evolution, titles next mysterious Blockbuster Star and puzzle the Blast in and a brought studios Both creating brand-new also that Toy are well creating sea Game, engage like We islands in Games, explore Pirate games Toon Blast makers

games production the global Over steadily across make ramp up will progress we quarters, coming and on our both to meaningful also studios. the these titles, of expect development additional in

in Third, our one we trailing XX our surpassed in have our $X.X by we of bookings In categories, QX, months deliver strong we games, portfolio of Zynga's hyper-casual grew advertising advertising on year-over-year. expanding basis, expect revenue fastest-growing to now billion. a business. XX% And growth

drive live new our we development from releases, forward, is and momentum largest mobile game Rollic’s new process and genres the unique the of Hyper-casual to from publish hit to Moving portfolio. game expect services, more and Rollic’s and one advertising us fastest-growing on repeatedly positive design enables growth titles.

sustaining We and engagement. are we momentum, with and first player within expanding are X. third-party on platform build introducing key technologies. now bold hyper-casual enhancing are and developer our network To tools and new which are franchises, deepening publishing this Rollic’s their beats

Chartboost a significant next-generation and in platform. advertising integration well progress underway with mobile building Our is we making are

efficiently By side As advantage. important enhancing product, the platform are integration evolve, ecosystem platform, players mobile yields of the portfolio first-party Chartboost app be content we and Chartboost more operated out competitive meaningfully We're advertising our on scale. enable acquire advertising to with the at increasingly will will building to demand which ability improve data owned and continues also an and large our leveraging Zynga's platform of to us inventory. at-scale supply-side an high-value mediation

will We Chartboost also more generate advertising partners. that value for this expect

outlook Zynga's forward and in and now call the provides position addressable a diverse that, turned large mobile opportunity to QX With to total significant to more and reach marketers and discuss turn more audiences, advertising brands strengthens over expand highly our to fast-growing to our sector. our I market advertising like to platform would detail. the digital Ger As in results

Ger Griffin

of best largest the our live bookings. ahead deliver third a versus ever COVID-XX and Thank ever net strong revenue on highest top-line performance our Zynga's $XXX stronger results, mobile lockdowns XX% our to of also the $XXX report due QX, the for beat. the guidance, a a difference Zynga, to by change revenue speed respect to profitability of addition X% Rollic's million revenue revenue XXXX. driving balance the in or us comparison revenue. million driven Dragons, primarily we by $XX revenue Today CSRX revenue, and you, Rival, driven and welcome our primarily and both update bookings guidance Puzzles, change against Company's XX% million performance The Toy a drove XX% maintaining history. in $XXX GAAP of We I million, primarily outlook. from driven was of was Frank. bookings communicated down million our million the deferred Golf release top-line by is $XXX portfolio. team in deferred estimate part raising annual strong net strategy growth multiyear deferred to performance profitability Revenue bookings In by release was with ago. revenue. release of Live developer difficult up QX and $XXX results bookings Merge year-over-year, of or advertising up We change and of non-GAAP year-over-year, of XXXX. revenue million audience services Empires is the the million. hit a a were an record Blast. would $XXX our Advertising $XX and in including On User franchise, the in Outside now million Revenue in revenue higher driven from was portfolio. services and our year-over-year, hyper-casual With year of track $XX quarterly we're deferred year-over-year, revenue and ahead of impact in full-year guidance, market-leading and deferred net of Execution previously a the are in of portfolio hyper-casual a ended revenue. with our $X quarter million up our which results deferred QX delivered $XXX of and was comprised QX -- growth $XXX talented driven X% and also to bookings services QX net generated our $XXX million $XX million million Rollic’s the deferred StarLark, by behalf of year-over-year pay $XX user million million has like live the our pay a advert a bookings

the which the a other $XX versus as equipment. deferred vacated better of in GAAP operating XX% release and other was improvement was and revenue, year-over-year. ago. in million, represented This lower to operating expected the of expense. income operating in one-time primarily net office of than one-time cross-platform vacated expenses by for million Non-GAAP due the improvement in live guidance in including the revenue new increased in a non-GAAP pipeline, incurred The acquisitions, or hyper-casual non-GAAP an incurred loss of of lease, as expense, contingent to of from marketing higher this and in of from million revenue deferred to from million, variance of XX% million of portfolio. loss cost change up impairment or office were We Outside stronger a driven by the an related year. year of I $XXX step-up guidance, our operating expense of our higher million GAAP primarily $XXX and to million a GAAP property FY XX% improvements, our $XX just other year-over-year, a the primarily reduced expenses. and $XX XX% This year-over-year particular, equipment. was by across QX the $XX a expense taxes. prior by one-time a our XX% The our expenses improvements, $XX the contingent was vacated cost our net partially represented expenses loss vacated operating leasehold projects due lower prior expenses $XX development. up impact related than partially by reported leasehold from $XXX expenses. this from lease. bookings operating lease, QX, This offset decrease consideration down of to Turning up the related included spend increased and property XX% to year-over-year well acquisitions. million expenses game million Non-GAAP increase year. $XX performance, investments noted, leaves net net drivers operating and partially impairment costs primarily operating offset expenses our offset incremental were In operating a and year-over-year revenue net driven This from of were one-time play our Rollic’s the included of the expenses, million and consideration related balance recent was expenses XX services. and

our in difference Our to in the QX driven primarily year-over-year We operating and was million of million, by guidance, primarily change down better-than-expected year-over-year, a $XX the higher increase million the revenue of period. $XX adjusted $XXX and higher flow better million, $XXX earn-out deferred EBITDA net driven due was than performance. net The revenue. release cash operating XX% deferred generated this payments by

October September the expect consideration utilized XX, acquisitions. for StarLark. of billion investments upfront million for $XXX primarily In approximately future we we to acquisition $X.X use which fund of of to cash As have the and we XX,

no on our amounts available $XXX facility, credit We had outstanding as million XX. of which also September have

previously our guidance bookings to we to in outlook. Overall and deferred profitability XXXX, Outside revenue, raising are GAAP non-GAAP of for the revenue estimated for are our communicated Turning update profitability full the XXXX. our change we our maintaining year guidance.

follows. Our guidance is updated and QX full-year as

For million million of and $XX our EBITDA million $XX net of prior-year up versus $XX in QX, XX% year-over-year. prior $XXX or million $XX $XXX year revenue in of or quarter. $XX deferred $XX a loss Bookings million And million. X% net $XXX million Adjusted increase quarter. loss then of of a million revenue of year-over-year, the versus million the up in

or million, $XXX million guidance. or XXX% $XXX $XX guidance. Adjusted million our increase million increase loss $XX year-over-year, $XXX prior our expect compared XX% of $XX than million we of of of million our prior $XXX an million $X.XXX versus million of prior of $X.XX A increase in our year, guidance. and deferred million versus of year, an or an $XXX full million increase are up billion guidance. prior up and and the $XX of $XX is million billion, the revenue in loss improvement year-over-year, of $XX net or year-over-year, For a guidance. of And XX% up Bookings and down year-over-year EBITDA revenue to net $XXX to our a XX% million lower an million that prior prior $XX versus

in to from growth Chartboost offset are in our investments we view user Rival include: investment ramping in in driven Rollic conservative and Growth acquisition in outlook will on our as live more launches our and primarily from expect Golf in addition year-over-year and said, against our advertising performance first by yields, X. Some to in by prior be account marketing launch and this initial services and life will older be for In of consider services to growth growth And factors from contribution acquisition lower collectively year-over-year a rate, and Versus service contributions partially our That contribute QX live live QX. X. our implied assessing declines Merge our mobile quarter new we our as [Indiscernible] FarmVille QX XX. adjusted guidance in QX with Dragons, QX our services, advertising more improvements Magic, reflecting portfolio growth Merge investments well later in QX to web our gradual hyper-casual primarily from the game titles. guidance, to will user FarmVille benefit we bookings and top-line have full

amortization impact as slightly, a partially GAAP a change expense. driven of percentage of For to the primarily by of non-GAAP cost expect QX, as deferred the to due On percentage stronger improve we of basis, cost revenue, year-over-year, revenue by improve expect a bookings offset in we to sales a sales positive of advertising mix. primarily

a operating partially a primarily and GAAP increases revenue as by expenses revenue. to QX percentage and G&A of marketing sales offset of increase as by in expect percentage We driven R&D

marketing QX of of non-GAAP operating percentage increase sales expenses offset to bookings. also by driven bookings as percentage partially increases by a R&D We and G&A expect in as primarily and a

will Rollic we look to growth 'XX, growth and double-digit hyper-casual live including year-over-year, we driven momentum as full-year ahead continued top-line from FarmVille by in be as Golf expect portfolio. contributions well X we As Rival, targeting are low in our services, which

year. be releases We also other release contributor, and expect later in growth new strong to games in worldwide including Hunters the 'XX Star of new a Wars our for potential the

of we 'XX expect from the years, influenced our the operating by margins our new and be on we invest over While marketing expand few to pipeline. in next expect next level we launching will the margins releases scaling waiver game of

scale, be and service Ger. increase occurs, game complete positive 'XX, in would to acquisitions remarks. used accelerate call fund we for As to closing generation, expect future flow meaningful I new our this in outstanding back cash of to Thanks, like live net we anticipate which earn-out them turn will to 'XX After expect primarily Frank growth expect to With we to that, the to the his our further beyond. a contributors QX most this commitments. In become our we portfolio.

the interactive free-to-play on best and Zynga's the is a about also I Company's largest for audience devices, in ever technologies, annual top-line new player and positioned to Before open to context in With long-term history. industry. entertainment. track We're with performance growth leading as innovations, how want entertainment interactive for the XXXX We're on questions, finish Zynga ahead mobile the excited additional the we provide call include world experiences. strengths. around market this within audience live continue our total share positioned next-generation and expand is engage social unique to this and immersive leverages expertise, growing market the people to Zynga first-party more more our and Zynga's will addressable that platform our discovering capture plays growing our sector. portfolio, deeply will to uniquely This global gaming services be These advertising content.

continued on growth and are strategy for in beyond. our has executing We multiyear that focused well-positioned 'XX us expansion

game We our pipeline. foundation, expect new well services to drive our launches growth game live exciting from from recurring new as as

our expansion, that games, building be platform growth an ad addition, play, contributors. progress In cross-platform anticipate significant each in we will hyper-casual and international

in We provide will emerging opportunities, additional also growth optionality. are investing which

as in The there's growth. technologies for and With begin. call to in to consolidation confident In we time and expect summary, to anticipated Operator, as entertainment generation, further questions. increase mobile technology, undergoing like Zynga. NFTs industry these games and fast-growing we advertising Zynga flow scale our dynamic like and net acquire in cash talented ability our you sector, more would is to be popular well on and expand never social within that, been may include at significant blockchain AdTech. platforms more open teams, TikTok. to of a industry direct-to-consumer a Snap Some The accelerate our up are we billing, the and live it. now exciting With interactive within franchises, continues

Operator

one compile yourself by [Operator limit you stand to Instructions] the one ask follow-up. roster. question that We and we Please while Q&A

the comes question Fargo. Fitzgerald from of first of Our Wells line Brian

is line open. Your

Brian Fitzgerald

title Thanks, all, that cross-platform playbook guys. in does how at on the want maybe and does of if Wars marketing address a marketing -- -- there, terms a franchise at couple how to for the playbook, in of name differ, like all? Hey, differ, terms how for Star you titles your cross associated I of given platform specifically, ask things Hunters, if that

Frank Gibeau

little a play, The channel lot using be UA, marketing, is games. console, right Hey, performance of Both huge a are Brian, will to we'll is free are common PR, so component development, mobile marketing. titles it getting first-party is Frank. There those how scale will lot this using playbook fundamentals now but a to has We be see marketing of and to the now cross-platform between of the could that for mobile over feel we've that bit a mix. the of be into paid fall. more the but Nintendo. in those enough the years heat able We devices, lean harder we where differences to on launches the lean seen is in and terms of might we'll confident into market might acquisition be marketing TV bring

Brian Fitzgerald

Thanks, Frank. Appreciate it.

Operator

Thank you.

next Our Mario ahead. question go Please Barclays. from Lu, comes

Mario Lu

questions. taking Great, thanks for the

these blockchain, is and existing gaming, particular Matt Wolf to new rough is just going in VP The like I'm games and initiatives? best today you gaming first one is in be or be guys suited on what curious is virtual up. that genres from the and games their for games which you that announced both your going on to it's the think of blockchain ground timeline

Frank Gibeau

question. (ph), Okay, Mario good

that at how is about look IP lot we're the heat dynamics, where terms understanding really A category, flexibility of early is. The because we going do of gives to first wholly-owned is place this approach it more work us opportunity. that in and development the the to stage the

use So want wholly-owned to maximum we flexibility. IP for

cars, this first out, farm, terms that terms our today. so announced of the PMs like Directors at to we as at topic hiring Board our of for in this the RPGs, popular most make example. is category. and early of the best building public RPG category there's collecting days, interested builder we you you're to some the a lot It in collection X we'll probably commitment excited people feel in categories our just leader of this of think mechanics. looking this builder estate; It's are interesting, In to places new is really mechanics endeavor, we Zynga, a opportunity We but to mentioned, and internal Engineers are very how are in mechanics, of of that have the Also look. are a you value the real certainly where build

Mario Lu

guidance, both terms provide color the from XXXX? as such StarLark acquisitions just that's XQ and in a Chartboost any And and on in in you contributions recent Great, could Thanks. of guys the follow-up helpful.

Frank Gibeau

perspective, from we of, speaking bookings million. Chartboost roughly the quarter a probably of is in before, terms said around $XX In as

growth So then for roughly quarter-on-quarter, a guidance it's it a less Golf million the of our perspective. Rival, $XX obviously relates as from pickup And quarter. to assumes

Mario Lu

thank Great, you.

Operator

Thank you.

Please Thornton ahead. comes from Truist Matthew question of go next Securities. Our

Matthew Thornton

obviously the sufficient there Ger. them with vertically all-related. content market Hey, Zynga's. I There's of that kind couple first-party Frank. valuation a content to -- Hey, obviously ad apply networks of looks it significant gaming now, first-party X-part a is integrated guess endemic and and in out different question a are from

M&A that is about that the as at question my do to how at vulnerable just about you valuations context do the and thinking given or relatedly, then or but thinking gap? about buybacks. opportunity -- how look guess think M&A so in given this curious maybe being there, on between current? And for you again disconnect maybe Zynga and finally, an close to whereas delta Gerrick, worry going see Secondly, I'm in And of is that is, you're I kind valuations you're

that think starts there, would and in through Any kind do about fact Thanks that as and cash great. you buybacks balloon XQ As the final of kind be get earn-outs color from of guys. that the context? you to how

Frank Gibeau

Gerrick in I'll for the on come Thanks with first can the Matt. the and questions, start two one. third

I interesting working and the you Chartboost The know, for is acquisition, we've time. That's advantage. a destination life a we've what the platform, something is our data to that first-party ecosystem, companies an about, and combined powerful of those that companies content app think the examples the been against developer perspective on publisher, are have building lot the that there's and can symbiotic a do. platform, that and bit view to believe create noted, And we've that between when with as going starting a that platform they of is as an a the in game several what's next-generation component our you mobile we to been for same thing been, scale nature are ad concept. started now app that ad as is out companies. and thinking and and to platform from in of publishing vision mobile good of Are companies at we've from the competitive successful Zynga bring going

conversation that's ad for Company versus We advantage and For that power building a as There's there's buying gaming full and positioned that similarities. a lot platform us, a our we're future life commonality, just XX see in being an lot be starting platform platform a the of the to our overall years, frankly, having from positioning. game of like being as an assets. of to of manifesting would last part ad bringing at and it competitive

the piece there. our on in we and day. second be our vulnerability, one. business question a M&A The your dynamic would From summary on perspective, that's The on come gaming focus I every we guess growing is business what

Sometimes the such you are augmented can hot, not. by something on sometimes to tomorrow life front. are value really Zynga, overall whether trends value. is inorganic on in continue are we long than that we today. bring on just long add shareholder you're about growth, that and But that gaming and organic are 'XX and we believe think we growth don't vulnerable not and more thinking to -- just we're about We creating had beyond we're or to We that we

question. And Ger so off third now (ph) for I'll the to hand

Ger Griffin

unique done do be with but than of to capabilities opportunities the in in and That say will as room we next I talented the shareholders. of expand. did optionality to we Yes, earn-outs, see or absolutely teams on into bring Frank while to particular think lot acquisition, it's cash of small cash, of analysis, remarks material return still primary our it next buybacks few and our own other on cash-generation going QX have years. for there will that which are what be once said, meaningfully most will buybacks use through just Zynga the next build to I the through we get to to our into about we primarily going And a based say some of do we get year. some 'XX, it's my tranche the deal over essentially is actually to other relates When ones.

Operator

you. Thank

comes next of BTIG. Our Lampen, from Clark question

Your question, please.

Clark Lampen

of give under that umbrella. implied some of perhaps if marketing there I between for I the think of next of I'm us or and Rival have now, quarters, of the are X, you should that next or curious number run of guys upward for sense that that scaling right think to have sort the sort sort and we're key maybe over way either, year, about is rate we you marketing so Puzzle trend if Golf X counting that Thanks even Chartboost titles launching, something couple potential might one lot. a Combat, whether how on could up a X mitigate pressure. a like stand

right I second on you about a mentioned I letter that away base saw approaching and device could to if us relative now, I countries saw The about be sense Switch curious are installs launch. million how XXX question The you additive the hardware Switch. have is shareholder Switch mobile I was soft guys was might from give general base? on last a the for week current

Ger Griffin

context of relates to going to the is fiscal. a answer this Hi, question full marketing. it Gerald. I'll take in as I'm the first

launched year launch. the think and into soft Wars you during ramping extent Star We're a technical the we're Combat, lesser FarmVille about fiscal, Potter year. essentially Puzzle year live has entering -- current and Hunters to If services a and we just X this been Harry we've

Pirate Evolution Star have also Blast. You and

have of going marketing scale would obviously I the against as I new year. think significant year, we improve marketing those To I to into against it and optimizing margins relates these levers will new what Chartboost definition, to I our leaning think overall, stronger there on you've point, level about launch next is than think seen our leverage versus But 'XX. that and the what launches, investing your in expectation So to be operating overall titles current 'XX say U.S will services. a is marketing, and spend our be our by live put i.e. And as across our some pressure more

Frank Gibeau

I'll Ger question. the guess take I second

research Hunters. and We the be Android as audience see a Wars Star over a a the to more complementary something of up versions to are to We we're Nintendo's And the see example very bit that definitely on Switch a and summer. relative that opening to very iOS little device the an of the who test partner consumer platform it lot excited that is of younger are going -- in phones. playing

of We also that change can of you some Switch. the the like pace with get

on You it can room. big the play living screen the in

it's can couch. guys It A this mode the youth how of on the Nintendo or Switch. able be up gotten very about on more together, playing are is it people Switch, party of together. lot phone recess from your on game getting opens scenarios, and we've and allows whether think and being it's more together the to that on the and talks You user to match we research look think going great to and the at have that mix weekend just we available play complementary

Clark Lampen

Thanks lot. a

Operator

Thank you.

comes question Cowen. next of Doug Our Creutz from

Your open. line is

Doug Creutz

on won be bracing When quarter. weakness, IDFA. potential ad to you you. call, turned it guidance the [Indiscernible] seem you for And strong Thank the as for the some you guys out, gave achievers last to title

talk to some ones So ad think sort why relative of were can of extent [Indiscernible] Thanks. And big do platforms were alternative the trended what things obviously the to seeking IDFA. you people you expecting? better about than that benefited you by from you

Ger Griffin

if expected potentially we see this expect with QX into we QX is rolls some the than later idea Doug, it had Yeah, out. indicated Ger. to whole weakness and previously Overall, we in

was QX a of And we we into But that than momentum little portfolio I is momentum in As see continue yields bit through as to do audience up hyper-casual October, October. -- And continues QX. little we base. expect performance, in end QX a overall in actually drive it as Coming see it addressable advertising to plus we the well. really better indicated, to And picking portfolio our did were again. our and bit that highlighted relates softness of we expected. grow that doing

just advertising be So less we earnings expect very QX what call. a we strong at as, as a well set bit quarter we in would've will implied than last guidance the Thanks. little our when up

Operator

Thank you.

of question next from JPMorgan. comes Our David Karnovsky

please. Your question,

David Karnovsky

Hi, and thank you.

did was how your saw that, navigating can process general quarter more or think in to acquisition, Thanks. you related then way curious UA are you you difficult where view it the the on and cited know and pipeline user prior change is you you IDFA yields. scaling channels I'm Just on the than launching do process just terms And expand and the M&A? you in fundamentally of if maybe improving new think games, the even of about I then that through in maybe you change. what how

Frank Gibeau

David, UA comfortable is where to market improved to -- has week. Yeah, enough point the the launch FarmVille we last X felt

is user us. was -- as like gradually leaving period that's head the really that's releasing building and very also feel with currently layer we like We're that and tool quarter. QX time, scale a There October them. spends how that November, We're now, on the into year momentum. as as up you something but behind the was into back have It with were acquisition comfortable spending and we be really felt and that games that the live a worst Star we got that as release Hunters we to Blast feel as the growth is title new very Right side. early we the happened And operating we're starting as going Pirate that a techniques that changes So launch this Evolution. looked of comfortable And all next that on still know, we Star and systems can in successfully go really spending. Wars we services and us to into and we have good with Apple the use at new the pulled expected, to operating tools getting like Android obviously changes. we games allows that

So that. good we feel about

Unidentifiable Representative

Thank you.

Operator

Eric Please go comes question next of Handler Partners. ahead. MKM Our from

Eric Handler

the and bit a you decisions much. public allocation about in moment Are seeing of that's I disparity environment. at about you little wanted a now? the impacting M&A talk Thank multiples capital [Indiscernible] the and right bit to your multiples very a private how

Frank Gibeau

in be Yeah, now, the to -- we're active anything in marketplace terms changing in continue out the highly the opportunities would I of see. dramatic public we evaluating everyone for we -- I in don't are don't say markets there Eric, to see Obviously, valuations. and

the relates on more very a our that a from that energy for list, there in targets, looking talented still is can in a overall, obviously IP, to what you're right -- that perspective, got I -- that high and disparity so I some capabilities, think do a it is on and competition and Zynga is talent a it's we now at terms unlock we list, of the focused yeah, now, home, believe to pocket it's around on any much look you're we're a Zynga there. it's destination studio we As But least right if into perspective, different intense. think there's IP, lot more up bring there’s when at the there the that consolidation, of whether and And don't on studio, that, has further we whether from M&A, targeted if value that Zynga. are capability

Eric Handler

you. Thank

Operator

Thank you.

Our comes Mike Sachs. question Goldman from Ng of next

question, please. Your

Mike Ng

big the next afternoon. new wondering a I outlook Thank could just to soft-launch talk a if you. talk you million the follow-up, Evolution for year. good some Thank bit in are Blast much $XXX if of Star for question. low those was also instance, steady-state? how like wondering bookings magnitude Hi, very Pirate a could double-digit was contributions games you just be, just about little of these game I and about as for games could you the new And

Ger Griffin

in as Company we the And double-digit, Star do Gram that Rollic. the plus we've it in when not if Michael, should to think something the double-digit blockbuster it and in fledged majority you're going terms of opportunity year-on-year about of from that -- the think going see new than to obviously large a Games, perspective. challenge a games in the a at about the and our portfolio X, fully past you of from in FarmVille and we you is growth Peak that Also, if is we be new the an low that I the Overall, expect rise the our the bookings and the assumes -- be rate we as quarter Golf continued game, new come be other context major strong low that picture, will obviously expect grow Rival, the that momentum. as advertising, big Wars, guidance service 'XX. FarmVille, fundamental can from to lever the the we think will effectively launched in be obviously the see but live advertising growth lower And of the said like-for-like, haven't momentum next will growth. overall declared foundation bedrock be do are driver of again, that

Mike Ng

Ger. Thanks, Great.

Operator

next go Please our Stifel. of question comes Crum ahead. Drew Thanks, from

Drew Crum

wonder And I comment earlier in terms timing from Has synergies in of you your in performs that your you the year? acquisition. then on could light the and to do guys, on new Hi, afternoon. thanks. this Chartboost Okay, changed that games green good do if you view cost of amount before the the need update any other Star cross-platform are Frank, game see is titles? have for any Thanks. pipeline, separately, or you Wars how development other Hunters from

Ger Griffin

this Ger. is Drew,

good Obviously, and to give games, we're February somewhere previously prior color million leverage Chartboost we But moment to a we as going XX guidance that the from that and we'll as benefit call. synergies those will and get between launch that into games. new potential of to help Our is for on we expected XX there that's the scale Chartboost is obviously number that us we as number. contribution believe hold more and we earnings still the

Frank Gibeau

a of under cross-play, yes, for capabilities. terms cross-play have in of Drew new on handful development additional then games games And we

PC on In one X together in teams that that's as development works fact, announced. has on Echtra, to last working into is mobile more gameplay console developer we significantly haven't a going year we're the several of joined go us embrace There of start fully end that out are we rolling of And fact, that that and the this Mac one. that year. FarmVille games unannounced an version example

Operator

you. Thank

question of Please from Matthew Cost Morgan comes go ahead. next Our Stanley.

Matthew Cost

Hi, guys. the Thanks question. taking for

you games? do up of So your where what growth an Thanks. the put about the is envisioning decision? about business? that with end that had with you And soft you for prior that that do you non business, when you've about the coming see decision from? the how versus some hyper-casual think a greater like through scale ads of with your your drove in you the next there the interacting talked more launch just talk into of acceleration And hyper-casual terms then success up the a And do scaling leg revenue little in the opportunity that then so, bit platform Is about Rollic, to can ad games that you secondly, Can future? ad expectations? to if year; think

Frank Gibeau

put look is at think from business. coming ad business see expansion a that further that of And from hit we're with ad hyper-casual. system games. that can to products We start I'll growth from repeatable definitely the Matt, building. a types standpoint, has that territory Yes, We continue Rollic to a the we out contributors have the

place going look for that be growth. that to believe we to is one So

can our stack. the put with additional fully X where more has contemplated FarmVille of inventory games, quite haven't core releases ad are integrated yet are our with we Zynga games. operating in opportunities services in advertising into portfolio, new the Also games enable live existing for already core Second that watch-to-earn watch-to-earn example, our them; There other inside inventory, and it. have

'XX into we the We're new expand to helpful to releasing, of contributing as our that So account the addition in and But of that's not third-party that, us. a out. the for believe that going live, amount a of But to be can start is very right well head to between significant and hyper-casual, rest the now. Chartboost a growing part expansion important be Zynga parts to industry, Chartboost into that an we going games ad other through integration inventory of for longer we're through term as at lot level build can starting and growth. business overall We we of that as sure. that network business think

to lot the in learning and really other will up of integrate level to that The a We're investing machine the will platform the that. the platform, looking products continue look scale. attributes to platform and DSP, to supply looking and near-term, that yields the components augment side mediation and components at capabilities overall we're of the other start drive beyond that technologies also and of hit other parts order and in at expand that demand-side needs we at piece, further but we're

that 'XX, more showing it the a time really, strength we're renewed long about really know hitting getting new like ground. terms worth as in than and titles a Star The Blast 'XX that but we we really And second momentum launch Not titles it progress look in lot are felt we to communicating. good that and There just the development that the we're when we shortly, games to starting soft out fact, feel all and are that we There the together Thrones it contribute, past. remarks, go feels titles, will into are the slots cadence. really is hasn't and and are launching that's our soft lineup. off in forward well new has increased mentioned soft you was Potter and as haven't as 'XX, that really games an about. we come up contribute my going build It's its excited takes had in been notable stride launch pick In question and time. pipeline in that like Pirate of of as on launch other about studios in Harry in of Game I good saw growth going at to soft

Operator

you. Thank

comes Baird. of Our next question from Colin Sebastian

Unidentifiable Representative

This (ph) on (ph). is thank Great, you. Colin Dolton for

at in yields acquisition Just looking quarter-over-quarter. the you user that improvements saw

is of related some stronger Just far, able other with to launch versus that then what to came that platform. your user and you've And wondering different how can of so success on the of some been if game your FarmVille just quarter there. wondering, moving how to you've seen you specifically, Facebook given tied channels. comment drive yields last that that you. addition the the and to strategy on do the Thank from shifts acquisition around in versus of early And much Chartboost of maybe

Ger Griffin

of Gerald in this terms -- Colin. is [Indiscernible]

into or integrated, it's and the side, advertising I is in there, I yet, get building see said I QX would days much in On we because material and the and improvements the Chartboost early from of we it's will said improvement as Drew's think beyond. we against more 'XX but to as getting Chartboost will as see, question, tag I obviously Chartboost earlier, it's QX there wasn't opportunities

call, if from set the we've into the we bid, up perspective, you that So look if in look as board profitability we the QX, earnings QX, you did seen last with of and QX improvements at the see to across much towards end layered from from UA we as just some lean into opportunity the landscape. QX FarmVille, against in service not of in we've not because but And benefits our spending an obviously QX, see drive the investment titles. live perspective the

linked board; fixated much Facebook, historical Facebook, marketing very it's across one not mobile beyond on legacy FarmVille around to Obviously, FarmVille, diverse platform. of very terms the of in is it's marketplace where the a was we're the everywhere. but In any now strategy it's

So across investing user in we're actually channels. multiple acquisition

Operator

you. Thank

comes ahead. of question Johnson Capital Markets. go next Our BMO Gerrick from Please

Gerrick Johnson

you. Good afternoon thank and

installs is game in be And per or revenue my you. StarLark Rollic off, from First forward, ad are or meaningful growth that and question, more contributors they productivity Thank additional -- on from is going better the second ReVamp, game? like expected these can novelty? Rollic there ad games productivity more

Ger Griffin

the of all terms in be it'll Yeah, of Rollic, above, Gerrick.

like of -- to actually opposed earnings, hyper-casual games. more some services, the core this we're seeing as sustainable the starting behave is business, of what on In and that live terms key in-and-out we with the to last franchises talked actually what they about are

looking the work developers into also into of continued team sort sort So and to build plan from But we of we of, iterative with that that we the some 'XX. of the events third-party franchises. ball to to expand perspective, have continue to beats network first-party is and do and that

overtime, AdTech those stronger see even partner we leverage as you Zynga. developed on Rollic, ultimately games third-party strong drive of through we'll coming flow-through a into obviously So platform, bookings both And will able and to be the games. IP obviously our flow-through of

Frank Gibeau

doing really and we of we lot novelty those to we're lot want what really from The not transitions thesis efforts Frank, We're at Snap with scale. also that there's learning that the the the experiment and heat. announced and if with its entertainment are history it highly sake perspective see early so in it's has TikTok, these environments platform with could all. experimentation social and then is hit new to work a a platforms. Gary do It you getting that engaged platform a on now on and for development. Interactive our industry in can today so social Company, gaming and

learn putting about same other Company games. environments. sure, not also for work we're it teams networks to and these the the we're as So how on but to work we're understand what helps and to betting virals we us our can putting at see it the brands It to relates to time, market

of are they on So bets mainline in and if developing can are be viable to benefits business in these we they being secondary right our or on platforms addition position. platforms, we're the the in whether that actually the and these then early to affects are part not

think we way the about that's So it.

Gerrick Johnson

very you much. Thank Great.

Operator

you. Thank

ahead. Our last Martin from go the please line comes Company, of question and Oppenheimer Yang of

Martin Yang

-- afternoon, question. good taking you Good for evening thank my

and geography And is hiring, associated NFT? now what or gains at first? with you what NFT developing why -- are First your on question regarding blockchain strategy, second you related question you would to is: are of Maybe can elaborate your game type that target stage for direct-to-consumer

Frank Gibeau

you question. thank for Martin, your Yeah,

In forms. on we terms go direct-to-consumer. different takes it PC, direct-to-consumer couple of the a Obviously can the idea, of

work bill, console the service platform. all and get for handle we platforms with or So from may other you that customer potentially distribute can example, platforms mobile services to other

out. of for that. strategy opens we using position do services ecosystem us the for future the It like and look things that DXC. So to platforms in point then goal these have building billing, we the develop can strategy Zynga our to forecast activity on it's -- and would is accumulating where tailwind in ability But for and in out But our difficult includes out we our is we're to a have at direct-to-consumer Macs live place for in building those our If that that new identity be event DXC. to and It some these our for muscles system across we're be start given capabilities mobile obviously to email, courts. and part PC up the building business. the capabilities

would well just will Europe, the doing Asia, frankly opportunity games In cross-platform where highlight as be them. terms all We're important of increasingly America, of that release, as GOs, this that that too. our we in on to North direct, go I can the we an start especially

In on now of a I this the we internally second NFT, interest your think category. in why our terms lot question, from have of perspective,

Company area now. to -- to ascribe lot unveil make core term. felt talent of we and think start bring s it too things together the about start is time it. we was fast IP, him something been part of the facet part built As game that one of a to Zynga's And I or loop. ideas. that's in do value an that and a Matt earlier just of this 'XX blockchain any Board mentioned within of like way, We internally Company guidance level, how and right blockchain How and Way with And at and came be growth this as components an And like in to this of gameplay we talking developed to the into going is we long the interactive like fabric start time the this put hit the and the lot conclusion to to the speed, along forward. at on but met a inception from entertainment of NFTs technology was timing and operating owned will for to right unfold our the worked values go on the we Zynga our existing Wolf NFTs the some our that games the can getting and we've teams. where early are I any past category to core that it's portfolio, call obviously capital NFT we with of right the

we once leadership intend we do. we some we in think we bring what the talent place, and that's So to that ideas can to have got to start and the life

Martin Yang

Frank you, Thank it. Got

Operator

Lau call Thank for this I'd time back to over the turn you. At to remarks. closing Rebecca like

Rebecca Lau

to for joining look forward further call Thank coming weeks. connecting you Latiff. the I earnings our over today want thank everyone and again to

Operator

you concludes for today's participating. call. this Thank And conference

may You now disconnect.

Zynga (ZNGA) 9 Nov 212021 Q3 Earnings call transcript