Newcomer CEO Mattrick outlines a 90 day plan, but says recovery won't be quick
Don Mattrick addressed investors in a company earnings call for the first time as Zynga CEO on Thursday, outlining his plans to get the company back on track.
Zynga has been in hot water since shortly after it went public in December 2011, with stock prices falling as low as $2.09 cents.
The news that former Xbox boss Mattrick would be taking over as CEO from founder Mark Pincus sent shares up a bit, but it's only today that the new chief executive shared his thoughts on the future of the company.
While acknowledging that it would take time for the company to find its feet, Mattrick did give an outline of the kind of work he was doing to set things right.
“We anticipate two to four quarters of volatility as we work through resetting and developing our strategy for growing topline revenue and profit,” he told investors.
“Getting a business back on track isn’t easy and isn’t quick. We have a lot of hard work in front of us but I believe we can succeed as a team and Zynga can do this.”
The results from the last quarter haven't been good. Revenue is down 31 percent from last year to $231 million, and it can only be a mild comfort to investors that the $16 million loss is an improvement from last year's drain of $23 million in Q2.
That was before Mattrick took the wheel though, and the executive is confident that the company has its “biggest days” ahead of it.
“It’s clear that the market opportunity around us is growing at an incredible clip,” said Mattrick.
“It’s also clear that today we are missing out on the platform growth that Apple, Google and Facebook are seeing.”
“In short, we can do better.”
Mattrick's outline of the next 90 days as CEO included “top to bottom business reviews,” evaluating the business against “market opportunity”, working with teams to improve product quality, and a re-evaluation and reset of the product pipeline.
“We need to get back to basics,” he said.
“That means taking a longer term view on our products and business, developing more efficient processes, and tightening up execution all across our leadership team and company.”
While this might sound to some like another round of layoffs in the making, Mattrick replied to one investor question by suggesting that Zynga shouldn't be scaling down, but using its size more effectively.
The recurring theme of today's call was 'focus', and it seems this new focus involves backing off the real-money gaming strategy Zynga has been talking up since last year.
“While the company continues to evaluate its real money gaming products in the United Kingdom test, Zynga is making the focused choice not to pursue a license for real money gaming in the United States,” read a statement from Zynga.
While avoiding specifics, Mattrick's comments about platform growth suggest the company isn't ruling out too many options in terms of where it targets its games.
“I see the potential in all parts of our business - from regaining share on Facebook to leveraging our IP, our network and our knowledge for mobile,” he said.
“And, because of what the company has already achieved, I believe we have the staying power to successfully navigate our transition and create connected experiences that span multiple devices and multiple operating systems.”
Mattrick wasn't shy about saying there could be some shake up. Aside from the talk of “volatility,” he spoke of changing some bad habits that had formed at the company.
“Zynga’s still a young company and we have the ability to break some bad habits and get back to some good fundamentals,” he said, wrapping up.
“And while my approach in the first few weeks is to listen and learn, when it becomes clear what change is necessary, I’ll move quickly and decisively to do what’s in the best long term interests of our players, employees and our shareholders.”