Zynga Inc. (NASDAQ:ZNGA) has been on an upward trajectory in the last few weeks and in the last trading session the company gained 1.41% to close the day at $5.03. The positive transformation at the company has been a result of the turnaround engineered by Frank Gibeau who joined the company in2016 as CEO from EA.
Since going public in 2011 the company faced torrid times from 2013, and according to Gibeau it was a long journey, but the company has managed a turnaround. Zynga has completed a turnaround, and it broke even in 2019 with over 1,778 employees and 39% growth in bookings.
Acquisitions facilitated the turnaround
The transformation has been spearheaded by acquisition since November 2017 when the company acquired Peak Games board as well as card games for approximately $100 million. The company equally purchased Merge Dragons maker Gram games at the cost of $250 million and in December last year; they acquired 80% stake in Small Giant Games for $560 million.
Similarly, the company has doubled down on the “forever franchises” that can bring an additional $100 million annually to sustain the business for over five years. Growth has also been driven with games like CSR Racing 2 and Words with Friends. Although Zynga Poker is somehow struggling the company has already lined up nine new games.
Transition into mobile driving business
Frank Gibeau indicated that the company had a fruitful year with the company beating its guidance estimates for the quarter. The turnaround has been driven by how Empire of Puzzles and Gram with Merge Dragons have fit to the company’s portfolio alongside other new games. Going into 2019 the company has a strong outlook, and they have lined up nine new games that are currently under development.
The company has transformed its business into mobile and currently, over 93% is on mobile as a way of focusing where there is high growth. Mr. Gilbeau indicates that they anticipate 39% growth on the company’s top line in terms of bookings as they try to reach the $135 billion.