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2 Gaming Earnings Calls To Watch This Week: Zynga And King Digital

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2 Gaming Earnings Calls To Watch This Week: Zynga And King Digital
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  • Zynga Inc (NASDAQ: ZNGA) will report its third-quarter financial results on Tuesday, after the market closes.
  • King Digital Entertainment PLC (NYSE: KING) is scheduled to announce its third-quarter earnings on Wednesday afternoon.
  • The Street and crowd's sentiments are rather lackluster; Hannu Verkasalo, CEO of Verto Analytics, has provided commentary ahead of the earnings.
  • Zynga

    Flat is not bad, but it isn’t exactly great either. This is what the Street is expecting for Zynga: a flat (both year-over-year and quarter-over-quarter) net loss of ($0.01) per share on revenue of $167.82 million, down from $176.6 million in revenue reported a year ago.

    According to Verto analytics, Zynga's apps and websites attained an average of 39 million monthly users over the third quarter, reaching 16 percent of the online population in the United States (247.7 million people above 18 years old).

    In terms of average daily reach, Zynga hit 18 million users a day, which translates into a Verto Stickiness Index figure of 44 percent for the quarter. As investors might expect, 69 percent of users accessed the content via mobile devices only.

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    “On average, Zynga's users spent 4 hours per month on the company's content,” a Verto report explained.

    King Digital

    King Digital, for its part, is expected to deliver its worst quarter ever in terms of earnings. The Street is modeling consensus earnings of $0.38 per share on revenue of $478.27 million, down from EPS of $0.56 on revenue of $514.4 million retrieved a year ago, and from EPS of $0.49 on sales of $489.53 million reported last quarter.

    Over the third quarter, King's apps and websites reached on average 51 million users monthly (21 percent of the online population), hitting an average daily reach of 19 million users, Verto stated. This translates into a Verto Stickiness Index of 41 percent.

    “Out of the daily users, the average number of mobile-only users was 15 million (78 percent),” the report added. “On average, King's users spent 7 hours per month on the company's content.”

    There Can Only Be One King

    To conclude, Hannu Verkasalo, CEO of Verto Analytics expounded, “The U.S. mobile gaming market is quite fragmented; there are more than twenty publishers in the top 30. Zynga is one of the most recognizable mobile gaming brands along with Supercell, but it has not yet found the recipe for making addictive games like King has. Words with Friends was Zynga’s only game in the top 30, while King had six games on the list.”

    He continued, “Additionally, the level of loyalty among King’s users is remarkable. For example Candy Crush Saga’s reach among players of the other King games is between 44 percent and 71 percent.”

    Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

    Image Credit: By Susanne Nilsson (Flickr: Candy Crush) [CC BY-SA 2.0], via Wikimedia Commons

    Latest Ratings for ZNGA

    DateFirmActionFromTo
    Aug 2016Cowen & Co.UpgradesMarket PerformOutperform
    Feb 2016UBSMaintainsBuy
    Feb 2016Credit SuisseMaintainsUnderperform

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