Zynga’s shares slipped nearly 6 percent in after-hours trading as the company made its first-ever earnings report as a public company. Zynga swung to a loss of $435 million on a massive $510 million stock-based compensation charge related to its December public offering.
Excluding that charge, the company beat analysts’ estimates with earnings at 5 cents a share, higher than the 3 cents a share predicted by a Bloomberg survey.
Even though Zynga beat analysts’ estimates, it looks like traders were expecting a bigger quarter-over-quarter bump in bookings. Shares are down 6 percent in after-hours trading to $13.48.
Zynga’s shares have climbed more than 25 percent since Facebook’s IPO filing on Feb. 1 revealed that the platform’s payments revenue had grown 20 percent quarter-over-quarter into the end of the year. That suggested that Zynga might see a similar increase.
But Zynga did not see a commensurate bump. The company’s bookings were up 6.6 percent to $306.5 million from the previous quarter’s bookings of $287.7 million. Zynga said that non-GAAP net income (a measure that isn’t in line with generally accepted accounting principles and excludes that one time IPO-related charge) is $37.2 million compared to $63.2 million a year before. Net income is lower than a year ago because Zynga only finished its transition to using Facebook Credits in April 2011. If it had used Facebook Credits the whole time and gave Facebook a 30 percent revenue share, it would have seen a 65 percent year-over-year increase in revenue.
Bookings for the full year are up 38 percent to $1.16 billion while revenue reached $1.14 billion, nearly double what it was a year ago. Zynga expects to see between $1.35 and $1.45 billion in bookings for this year. The bookings metric factors in how much users paid upfront for virtual goods while revenue counts when users actually consume the virtual items they purchased.
Daily active users were flat over the quarter at 54 million while monthly active users rose to 240 million from 227 million in the third quarter. Monthly unique users, which doesn’t double count consumers who play more than one game, rose slightly to 153 million from 152 million in the third quarter.
However, Zynga is seeing growth into the first part of this year with daily active users up at 57.3 million.
The company is also growing its daily active usage on mobile devices. Mobile DAUs have climbed to 15 million, from the 13 million figure the company shared in December before the initial public offering. The company said mobile usage is up fivefold year-over-year and that it’s seeing “good growth” in payments on mobile platforms. Zynga didn’t share any specifics, however.
One thing to consider is that a big portion of Zynga’s daily active usage on mobile is through Words With Friends, which is more advertising dependent than other games. So one would expect that Zynga does not monetize its mobile users on a per-user basis as well as other freemium iOS or Android developers.
Zynga is trying to counter this by launching more virtual currency-dependent games like Dream Zoo, Dream Heights and Dream Pethouse, which are more female-focused and aspirational. Zynga calls them “vest and express” games.
The company also pointed out that it’s doing a better job at convincing users to pay. Monthly unique payers rose 13 percent in the fourth quarter to 2.9 million from 2.6 million in the previous one. Average bookings per user are also up to a record high at $0.061 from $0.058 in the previous quarter.
We’re still going to be updating this story as we go through the filing. Stay tuned.