Earnings

Zynga CFO resigns as monthly users decline

David Lee, CFO of Zynga.
Source: Zynga

Shares of gaming company Zynga zigzagged in extended hours trading Tuesday, landing up slightly after it announced a C-suite departure as monthly users declined.

The company behind "FarmVille" delivered third-quarter results that slightly topped analyst expectations, posting earnings that broke even on revenue of $176 million. Analysts had predicted revenue to decline 3 percent year on year to $170 million, according to consensus estimates by Thomson Reuters.

Zynga's chief financial officer, David Lee, will be leaving his role effective immediately, the company said.

Monthly active users (MAUs), a key metric for Internet companies, declined 27 percent year on year during the quarter.

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"I believe Zynga is in a much stronger position today than it was when I joined the company, and I want to thank [founder and CEO] Mark [Pincus] for his partnership. We've moved the majority of our business to mobile and are focused on growing our new IP and existing franchises, while significantly reducing our cost structure," Lee said in a statement.

Chief Accounting Officer Michelle Quejado will take over as interim CFO, as the search begins immediately for Lee's successor, the company said. Shares of Zynga are have fallen 4.3 percent over the past year.

Zynga also announced a $200 million stock buyback, and issued guidance for a net loss of 6 to 8 cents per share (a non-GAAP net loss of 0 to 1 cent) for the fourth quarter.

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The company will also postpone two new games, "Dawn of Titans" and "CSR2," to 2016, Pincus said in the earnings release.

"Based on the opportunity we see for 'Dawn of Titans' and 'CSR2' we have made the deliberate decision to invest in future development of these games and move their launches into 2016. As we get closer to our players behavior over time, we believe there are a few key areas that we can optimize to increase long-term player retention. ... We are able to make these hard decisions, because of the cost reduction program that we put in place earlier this year," said Pincus.

Earlier this year, Zynga announced it would lay off 18 percent of its global workforce. And the "Words with Friends" maker isn't the only mobile gaming company seeing big changes.

Video game maker Activision Blizzard announced on Monday plans buy "Candy Crush Saga" creator King Digital Entertainment for $5.9 billion, Reuters reported, as the heavyweight of console and PC gaming makes a major push into the faster-growing mobile market. King had tried to replicate the success of "Candy Crush" with titles like "Farm Heroes" and "Pet Rescue," but saw revenue fall 16 percent in the second quarter, the news agency reported.

Correction: Activision Blizzard announced plans to buy King Digital on Monday. An earlier version misstated the day.

— Reuters contributed to this story.