Social gaming giant Zynga reported a year-on-year increase in revenue for the first quarter of its 2022 financial year, expected to be the last before the business is acquired by Take-Two Interactive, despite a decline in bookings.
Revenue for the three months through to 31 March 2022 was $691.2m (£558.9m/€653.5m), up 1.6% from $680.3m in the previous year.
Online games remained the main source of revenue, with this area of the business posting $537.7m, down 3.6% year-on-year. However, advertising revenue was up by 24.7% to $153.5m, a record first-quarter total for the group, helped by the acquisition of Chartboost for $250m.
Bookings, which adds deferred revenue to the total, were 3.5% lower at $695.0m, despite advertising and other bookings reaching a first-quarter-high of $167.0m.
Average mobile daily active users (DAUs) increased by 3.0% to 40 million, while and average mobile monthly active users (MAUs) jumped 27.0% to 209 million.
Looking at spending, operating costs were 1.4% lower at $676.2m, meaning Zynga was able to post an operating profit of $15.0m, compared to a $5.5m loss at the same point last year.
However, other expenses reached $15.7m and interest expenses totalled $3.1m, which left a pre-tax loss of $2.9m, though this was still an improvement on the $9.6m pre-tax loss posted in Q1 of 2021.
Zynga paid $21.6m in income tax during the quarter, meaning it was left with a net loss of $24.5m, slightly wider than the $23.0m loss last year.
“We started off 2022 with a strong quarterly performance, achieving our highest ever Q1 advertising revenue and bookings led by our hyper-casual portfolio,” Zynga chief executive Frank Gibeau said.
“Through continued execution across all aspects of our multi-year growth strategy including live services, new game development and investments in our advertising platform, new markets and technologies, we are strengthening our position as a leading mobile-first, free-to-play live services company.”
During the quarter, the business revealed that video game developer Take-Two Interactive agreed to acquire Zynga in a deal valued at $12.7bn. Take-Two, which owns both Grand Theft Auto publisher Rockstar and 2K Games, developer the NBA 2K series – will pay $3.50 in cash and $6.36 worth of shares of Take-Two stock for every Zynga share.
Following shareholder and regulatory approval, the deal is expected to close in the quarter ending 30 June 2022, which is the first quarter of Take-Two’s financial year.
Shortly after the end of the quarter, Zynga also announced that Bernard Kim is to step down from his role of president and leave the business later this month.