Shares of Zynga Inc. (ZNGA) have been racing higher on three key catalysts.

1. ZNGA just reported solid earnings growth.

“In an unprecedented year, our talented and resilient teams finished Q4 strong, delivering our highest quarterly revenue and bookings in Zynga’s history. Our execution throughout 2020 added meaningful scale to our live services platform and strengthened our position as one of the leading mobile game publishers in the world,” said ZNGA Frank Gibeau, CEO.

He continues, “Our live services portfolio is off to a tremendous start in 2021 led by our Forever Franchises, momentum in Harry Potter: Puzzles & Spells and two new top downloaded hyper-casual games from Rollic. Zynga’s multi-year strategy of growing our live services, launching new games and investing in exciting growth opportunities has us well positioned for growth in 2021 and beyond.”

The company achieved its highest quarterly revenue of $616 million, up 52% year-over-year, and record quarterly bookings of $699 million, up 61% year-over-year.

Our results were well ahead of guidance across all key financial measures driven by an all-time best revenue and bookings quarter for Words With Friends, in addition to record Q4 performances by Empires & Puzzles and CSR2 as well as its Social Slots and Casual Cards portfolios. For 2021, the company expects to deliver revenue of $2.6 billion, up 32% year-over-year, and bookings of $2.8 billion, up 23% year- over-year.

2. Glu Mobile is being acquired by Electronic Arts in a $2.1 billion deal.

This is raising speculation that Zynga could eventually be acquired, too.

“The acquisition will immediately add significant scale to Electronic Arts’ mobile games business. The combination of Electronic Arts and Glu creates a leading mobile product portfolio that includes more than 15 top live services across fast-growing genres with a combined $1.32 billion in bookings over the last twelve months.”

3. The gaming industry is still seeing incredible growth.

For all of 2020, video game spending just in the U.S. totaled $56.9 billion, which is up 27% year over year, according to NPD. About $7.7 billion of that was spent in December 2020 .

In addition, according to NPD, more people played mobile games in 2020.

They noted, “The U.S. and Canadian mobile gaming market saw significant growth in 2020, with mobile’s accessibility as a platform creating a go-to option for consumers looking for new or expanded entertainment options while under restrictions and lockdowns.”

“Players are more engaged than ever before, with the average number of hours per week spent playing games on a smartphone or tablet increasing to eight hours in 2020 from six hours a week in 2019,” they added.

At the time of this writing, Ian Cooper did not hold a position in ZNGA stock.