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Bengaluru, NFAPost: Nasdaq-listed Zynga Inc. registered highest revenue and bookings performances in its history as Q3 revenues touched $503million, up 46% year-over-year, and bookings of $628million, up 59%year-over-year basis. 

This growth is registered by beating guidance by$8million and up $233million or 59%year-over-year. The company also generated record user-pay revenue of $436 million, up 55% year-over-year, and user-pay bookings of $561million,up69% year-over-year.

The company’s net increase in deferred revenue was $125millionversus our guidance of $175 millionandQ32019 net increaseof$50million.The primary driver of the year-over-year net increase in deferred revenue was the deferral of initial bookingsfromToon BlastandToy Blastconsistent with standard accounting practices for newly acquired games.We endedQ3with a deferred revenue balance of $655million versus $403million a year ago.


Commenting on the company’s performance, Zynga Chief Executive Officer Frank Gibeau said Zynga delivered strong results in Q3, ahead of guidance across all key financial measures, including its highest ever quarterly revenue and bookings and best Q3 operating cash flow.

“Execution of our multi-year growth strategy has driven our tremendous results to date and generated positive momentum across our live services and overall business,” said Zynga Chief Executive Officer Frank Gibeau.

Zynga Chief Executive Officer Frank Gibeau also said extending the company’s strength in live services, Zynga recently launched one of its key franchises Harry Potter: Puzzles & Spells to global fanfare and positive player reviews and closed our acquisition of Rollic on October 1 – marking our entry into the high-growth, hyper-casual games category.

“Today, we are raising our full year 2020 guidance and are uniquely positioned to be an interactive entertainment growth leader in 2021 and beyond,” said Zynga Chief Executive Officer Frank Gibeau.

GAAP gross margin decreased to53% of revenuefrom61% inQ32019primarily due to a higher net increase in deferred revenue, amortisation of acquired intangible assets and user-pay mix.GAAP operating expensesdecreasedto77% of revenuefrom83%inQ32019driven by stronger operating leverage primarily from R&D and partially offset by higher marketing investments year-over-year.Non-GAAP operating expenses decreased to44% of bookingsfrom52%ayear ago due to greater operating leverage primarily from R&Dand G&A operating expense line items.

Adjusted EBITDA was $38million, above our guidance by $83million,primarilydue toourlower thanexpected netincrease in deferred revenue andimproved operating performance.On a year-over-year basis, Adjusted EBITDA increased$10million driven byimprovedoperating performance, partially offset by a higher net increase in deferred revenue.

Wehave ahighly diversified live services portfolioofForeverFranchises as well as our Social Slots and Casual Cardsportfolios. In any given quarter,we expectthatthe performance ofindividual titlesmay vary, withourcollective portfoliodeliveringrecurring growth and the vast majority of our overall performance.

Our live services performed wellin Q3andwe are excited for the bold beatswehave planned for Q4 and beyond.CSR2hada record Q3, marking its highest revenue quarter ever and second highest bookings quarter.

The AmericanRoad Trip event series took players virtually acrossthe countrywhile unlocking unique cars created in partnership withrenowned American builders. Forthe finale event, we also worked with NASCAR to release theChevrolet Camaro ZL

1 1LErace car.In Q4, Fast&Furious TM returns to CSR 2 for an event series that features 10 new franchise cars, and we alsoexpecttolaunchElite Tuners, which provides enhanced customization of tires, body kits, spoilers and more.

Empires & Puzzles kickedoffa strong Q3with a new summer event, Sand Empires, followed by a new feature, GoblinBalloon, which enables players to claimadditionalin-game items after completing Wanted Missions. Inadditionaleventsthroughout the quarter, we also introduced six new legendary heroes including Lady Loki and Frigg. Looking to Q4, wehave more exciting events planned for the title, including a brand-new Ninja Tower experience anda ‘Return to Morlovia’Halloween celebration.

Harry Potter: Puzzles & Spells,the only Match-3mobile gamebased on the originalHarry PotterTMbooks and movies,launchedinlateSeptember and is off to afantasticstartwith positive player feedback and strong initial playerengagement.Inthe game, players enter a Match-3adventure brimming with the spells, humor, color and characters oftheWizarding World.In support of the game’s debut,popstar Zayn Malik joined Zynga in igniting social media globally.

Merge Dragons!was acorecontributor in Q3 asplayers enjoyedAnniversary, Friendship, Egyptian and Underwaterthemed eventsfeaturingunique items and special dragons.In Q4, we will globally launch ourRoyalPass feature and runour first Camp&Chill event as well as other seasonal eventsforHalloween, Thanksgiving and Christmas.

Merge Magic!releasedArcane Forest, Fiery Elements, Thunder Mountains and Golden Spirits eventsin Q3,in addition toongoing launches of Season Pass.In Q4, we plan on rolling outa newSeason Vault feature, which will release additionalcontent to players who have completedSeasonPass early.Across bothMergeDragons!andMerge Magic!, we are alsocontinuing to test new features to amplify the long-termplayer experience

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