Q3 2013 Earnings Call Transcript

Transcript Call Date 10/24/2013

In summary, I am encouraged by the early results we've achieved as we control costs and become more predictable. Given today's Q4 outlook, you can see that we expect to be profitable once again for the full year and even more importantly we believe we're poised for future growth.

With that, I'd like to turn the call back over to Don.

Don Mattrick - CEO: Thank you, Mark. I'd like to reiterate what I said at the start of the call. I'm proud of the progress we've made and I'm pleased with our performance this quarter. Q3 earnings exceeded our guidance both in terms of bookings and adjusted EBITDA. I'm encouraged that we're seeing sightlines to future growth. We're committed to being a profitable Company and we believe we're poised for growth in 2014.

When I joined in July, I shared my belief that the Company has incredible assets that will assist us in taking advantage of the market and I firmly believe that our best days are ahead. We are at the forefront of an entertainment revolution in an industry with explosive smartphone and tablet growth. Whether you measure it in terms of the number of devices or absolute revenue, the market will more than double in the next four years with 2.5 billion people, approximately one-third of the world's population using smartphones by 2017.

Gaming continues to be one of the most important application segments on mobile globally, capturing 55% of all-time spent on mobile and 67% of all-time spent on tablet. I am excited and feel privileged to compete in a market with such incredible consumer adoption and billions of annual profits up for grabs. At its peak, Zynga reached bookings margins of 47% on $393 million in annual profit on an adjusted EBITDA basis.

I am confident that Zynga is rewiring itself in a meaningful way that will strengthen the core of our business and put us back on track to achieve even more significant growth and profits. The most important thing we can do going forward is deliver compelling entertainment experiences that people will really want, value and most importantly love. Entertainment is an excellent business and we have an opportunity to deliver compelling products with the fit, finish and polish that truly engages a mass market audience.

With that being said operator, we're happy to open up to questions.

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