With Zynga operating as one of the biggest and most notable mobile gaming companies in the world today, the closing of its latest fiscal quarter was well worth examining among the earnings results coming out recently. Indeed, Zynga recently put out its Q2 2021 earnings results, but it probably didn’t have the kind of news you were hoping for if you were an investor. While Zynga didn’t report a bad quarter, it did offer timid guidance on the rest of its fiscal year due to the fact that Apple’s ad-tracking changes on iOS have muddled a business format that Zynga relies heavily on as a mobile game developer.
Zynga released its Q2 2021 earnings results on its investor relations website on August 5, 2021. The company didn’t have a bad Q2. Quite the contrary, in fact. Zynga put up $720 million in total revenue for the quarter, which was 5.55 percent up from Q1 and 59 percent up from Q2 2020. The company reported a number of similar wins across the board. Where it was flimsy was in full-year guidance for the 2021 fiscal year. According to Zynga, iOS’s changes to ad-tracking are to blame.
Back in its Q1 2021 in May, Zynga suggested that it didn’t see Apple’s ad-tracking transparency options on the then-new iOS 14.5 update as a threat to its fiscal year. That tune has changed here in Q2, where Zynga admitted that these new options have caused issue with usual Zynga business models that rely on user data and provide ads accordingly.
“We are navigating market dynamics related to the great reopening and Apple’s privacy changes that have created choppiness in our business,” Zynga’s Q2 2021 letter to shareholders said. “The adoption of Apple’s privacy changes resulted in a higher cost to acquire our players. In response, we scaled back our UA spend to maintain target returns, resulting in fewer players installing our games during this period.”
Further along in the future outcomes portion of the report, Zynga admitted that both Apple’s changes and the opening up of business and lessening of COVID-19 restriction introduces difficulties to the company’s overall guidance.
“Given the level of continued volatility and uncertainty around the COVID-19 pandemic and Apple’s privacy changes, there is the potential for a wider range of outcomes – both positive and negative - as it relates to our ultimate business results.”
As such, due to Zynga’s uncertainty in guidance, the company’s stock saw a rather hefty dip from $9.74 to a low of $7.75 per share in after-hours trading. Zynga has more than enough money and worthwhile products to continue to coast, including its acquisition of mobile developer StarLark and its popular Golf Rival game, but it seems as though business stability in Zynga’s future will revolve around figuring out a solution to the problems Apple’s iOS ad-tracking transparency presents for its regular business model. Stay tuned for more earnings results reporting as further companies close out the previous fiscal quarter, right here at Shacknews.
TJ Denzer posted a new article, Zynga (ZNGA) Q2 2021 earnings results offer weak full-year guidance due to iOS ad-tracking changes
Good. Get fucked.
If your business model relies on tracking users to advertise to them, I have zero sympathy for you.
TIL Zynga still exists