One-time Farmville titan Zynga has continued its shift toward a mobile game provider, unveiling its financial results for the first quarter of 2017. Total revenue was $193 million, a 4% increase year over year, as well as comfortably above its previous guidance of $185 million. Net losses were $9.5 million, a significant drop from $26 million in losses for Q1 2016 and the $14 million expected for Q1 2017.
In its quarterly earnings letter, mobile was the chief source of Zynga’s revenue, clocking in at $161.6 million, 83% of overall revenue, the highest that vertical has reached in the company’s history. Mobile revenue grew 19% year over year and was up 4% from last quarter. The main contributors to mobile revenue were casino games Zynga Poker and Social Slots, with additional contributions from racing app CSR2. Total revenue from user payments was $153.5 million, up $16.4 million (12%) year over year. The company did not break down the amount of user payments brought in via mobile.
The company’s user base reflect the ongoing transition to mobile: of the company’s 72 million monthly active users (MAU), 63 million were mobile players, approximately seven times as many MAUs as those on web. Mobile MAU has grown 19% since Q4 2016, while web MAU shrank approximately 9% in the same time period. In terms of active paying accounts, approximately 1.3 million buy virtual goods from Zynga, up 35% year over year. Zynga remains far from its 2011 peak, when it recorded 225 million MAUs.
The company’s advertising business, which supports games like Words With Friends, dropped significantly, down $8.9 million (18%) year over year. Zynga’s operating expenses for the quarter were $138.4 million, down 15% year over year and 4% from last quarter. The company’s share buyback continues, with $73 million left of $200 million allocated to the program.
In an interview with Reuters, Chief Executive Frank Gibeau said, “From our perspective, we’re very encouraged by the results, (but) we’re not declaring victory by any means.”
Zynga expects the second quarter to somewhat more impressive than the first and has issued guidance of $200 million in expected revenue for Q2 2017, with a net loss of $6 million.