Zynga posted a net profit of $4.8m for the first half of its 2021 financial year after a 63.7% year-on-year increase in revenue during the period saw the business to return to growth, while the social gaming giant has announced details of two new acquisitions.
Revenue for the six months to June 30 amounted to $1.40bn, up from $855.4m in the first half of last year.
Zynga’s online games business was by far the primary source of income during the period, with revenue here reaching $1.14bn, an increase of 56.2% on 2020. Advertising and other revenue also shot up 108.5% to $256.3m.
Bookings for the half were also up 51.8% to $1.43bn, with mobile bookings rising 53.4% to $1.39bn and advertising bookings 109.7% to $256.2m.
Turning to costs and total expenses for the half were up 23.7% to $1.33bn, though the rise in revenue meant adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was 114.3% higher at $296.8m.
After taking into account other costs, including $29.4m in interest expenses, this left a pre-tax profit of $43.1m, compared to a loss of $227.5m at the same point last year.
Zynga paid $38.3m in income tax, meaning it ended the period with a net profit of $4.8m, a significant improvement on the $254.2m loss it posted in 2020.
“We are pleased with our performance in the first half of 2021 and we are excited about our future growth potential,” Zynga said.
The developer’s positive first-half performance was helped by a strong second quarter, during which revenue increased 59.4% year-on-year to $720.0m, a new quarterly record for the business.
Online game revenue was 51.2% higher at $587.0m, while advertising and other revenue also increased 109.4% to $133.0m.
Zynga put this growth down to the performance of its live services, with better-than-anticipated showings from Rollic’s hyper-casual portfolio, Words With Friends and Zynga Poker, though this was partially offset by lower than expected user pay broadly across its portfolio toward the end of the quarter.
Total bookings in Q2 were also up 37.4% to $711.9m, representing another new quarterly record for Zynga. Mobile bookings were 38.7% higher at $691.2m, while advertising bookings also increased 111.1% to $133.0m.
In terms of costs, total expenses were 11.0% higher at $645.2m, which, when coupled with the increase in revenue, meant adjusted earnings before interest, tax, depreciation and amortisation (EBTIDA_ rocketed 148.1% to $173.7m.
When including $14.7m in interest expenses and $9.1m in other costs, this left Zynga with a pre-tax profit of $52.7m, up from a $131.1m loss at the end of Q2 2020.
Zynga paid $24.9m in income tax during the quarter, meaning it ended the period with a net profit of $27.8m, compared to a $150.3m loss last year.
“This Q2 performance capped off a dynamic first half of the year for Zynga and reflects our team’s commitment to connect the world through games during these unprecedented times,” Zynga said.
Meanwhile, Zynga has completed the acquisition of Chartboost for a total purchase price of approximately $250.0m. It had agreed the acquistion in May.
Chartboost is a unified advertising platform that includes a demand-side platform and supply side platform, as well as mediation capabilities.
“Together, Zynga and Chartboost possess all the elements of a complete, next generation platform for mobile advertising leadership: high-quality content, direct player relationships, massive reach and full-stack advertising technology that can be applied across Zynga’s game portfolio and Chartboost’s advertising partners,” Zynga said.
In addition, Zynga has struck a deal to acquire StarLark, the developer behind mobile golf game Golf Rival, from Betta Games for $525.0m in cash and stock.
Zynga said the purchase would bring to the business a talented development team, as well as expand its international presence by establishing a China-based studio with access to the region’s talent base.
The deal, which would see Zynga pay $315.0m in cash and $210.0m of its common stock, is expected to close in the fourth quarter of 2021.
“With the acquisition of Golf Rival, Zynga becomes home to a talented team with the proven ability to create a global hit, while expanding Zynga’s international footprint with a new studio in China,” Zynga’s chief executive Frank Gibeau said.
“Golf Rival has rapidly ascended to become the second-largest mobile golf game in the world, with six million downloads in 2021 alone. Together, Zynga and StarLark are well-positioned to grow Golf Rival faster together with additional new projects in early development.”