Buyout of OMGPOP helps Zynga in posting strong first quarter revenue

Draw Something is probably the hottest social gaming app right now and in late March, it had more than 35 million users on it. This abundant amount of success for an app that has taken the world by storm had prompted Zynga to acquire the app’s developer, OMGPOP for a whopping $180 million in cash. As per a report by Reuters, this acquisition appears to have benefited Zynga to a large extent as they have posted a strong first quarter revenue. As per the report, “Zynga Inc. posted first-quarter revenue of $321 million, beating Wall Street expectations on the back of strong performances from new titles, including “Hidden Chronicles” and “Slingo,” as well as the acquisition of social gaming startup OMGPOP.”

$321 million first quarter revenue

Speaking about the buyout of OMGPOP which propelled Zynga to post a good first quarter revenue, Sterne Agee analyst Arvind Bhatia, said “Even though it was during the last 10 days of the quarter, Zynga bought it when OMGPOP was generating a lot of revenue,” The report goes on to say, “On an adjusted basis, Zynga reported a quarterly profit of $47 million, or 6 cents a share. That compares with earnings of $16.7 million a year earlier. The adjusted figures exclude $133.9 million of stock-based expenses paid during the quarter by the company, which went public in December. On an non-adjusted basis, Zynga swung to a loss of $85 million.”

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The report goes on to state that the San Francisco-based company said monthly active users increased by 24 percent, to 292 million, Bookings increased to $329 million. That metric represents the cash Zynga pockets upfront when people spend money on virtual items in its games such as tractors, houses or poker chips. Analysts on average were expecting revenue of $317.25 million.

For those who are clueless regarding the Draw Something social gaming app, it is a game that is to be played with two people on their respective smartphones. It is based on the popular game Pictionary, where one has to guess what the other person is drawing. The person who is guessing is provided with a number of scrambled alphabets and blank spaces which can help them in deciphering the drawing. To know more about this app, check out our review here.