Zynga's earnings report for Q4 2012 shows $311 M in revenue, $48.5 M loss

Today, Zynga reported it made $311,165 in revenue, with $261,269 million in bookings for Q4 2012. In terms of revenue, that's flat year-over-year while bookings were down by 15 percent year-over-year (but up 2 percent from Q3 2012). Zynga's earnings report shows it had a net income loss of $48,561 million; up from Q4 2011's loss of $435 million (though the company could really go up from there), which was due to a $510 million stock-based compensation charge tied to its IPO in December 2011. As a result, Zynga's Q4 2012 was decidedly up from the $52.7 million loss in Q3 2012. The diluted net loss per share was ($0.06). Zynga's GAAP (generally accepted accounting principles) results show the company ended the year with a net loss of ($209.4) million. Diluted net loss per share for the year was ($0.28). This loss included $282 million stock-based expense and $49.9 million of income tax expense. Following last quarter's lowered 2012 guidance, the company was able to actually beat its projected estimated bookings between $1 to $1.1 billion (though this amount was already $500 million less than original projections for the year). The company's total net revenue for 2012 was $1.28 billion, while bookings managed to reach $1.15 billion. Zynga's outlook for Q1 2013 projects revenue to be between $255 million and $265 million, with a net loss of between ($32) million and ($12) million. As a result, it predicts EPS will be in the range of $(0.04) to ($0.02). Bookings are projected to be in the range of $200 million to $210 million. In this afternoon's earnings call, CEO Mark Pincus spoke about the company's renewed focus on creating mobile games, both with original IP and adapting mobile titles from established web games. Pincus went on to say the company's "number one focus" will be on mobile development. That said, Zynga's established web games are still making money; the biggest example was the news that FarmVille had passed the $1 billion mark in terms of total user in-app purchases. Pincus also said 2013 would see a major push from Zynga into the mid-core markets, based on how profitable the genre's proven to be. Leading up to today, analysts have been split with their predictions for how Zynga's earnings would go. The ongoing success of FarmVille 2 (which was recently dethroned as the No. 1 game in terms of daily active users but still reigns supreme with monthly active users) and CoasterVille's recent surges in traffic are certainly feathers in the company's cap, but things like Zynga shutting down a number of underperforming titles and the disappearance of high-profile sequel CityVille 2 from the charts (the performance likely recreating a sense of deja vú for anyone who watched The Ville flounder) were considered warning flags. Outside factors fueled some analysts' wary outlooks. EA's lackluster earnings report last week, which eschewed any mention of social titles in favor of mobile development, has been taken by some analysts as a sign of the continuing decline of social games. Additionally, Facebook revealed on Friday that Zynga's impact on the social network's revenue was continuing to shrink. As has been the case in past quarters, Zynga still has a lot of cash, cash equivalents and marketable securities on hand. Currently, the company has $1.65 billion in these, down from the $1.92 billion it had in Q4 2012. Zynga also doesn't have any short term or long term debt, according to Bloomberg. Cash flow from operations in Q4 2012 was ($114.3), or $119.4 million excluding the purchase of the company's headquarters in San Francisco. Zynga's partner publishing program has begun picking up steam, but its effects still haven't really started to make much of an impact on the company's bottom line. Although some of the early partners have games now playable on Zynga.com's platform and/or Facebook, Zynga hasn't turned on the full effect of its cross-promotion power to benefit these titles (many of which seek to tap into the lucrative core gamer market). Over the past quarter, Zynga had three major releases to help FarmVille 2 bring home the bacon: CityVille 2, CoasterVille and Bubble Safari Ocean. It didn't take long for CityVille 2's traffic to nosedive (it only appeared on our Top 25 Facebook games lists before it completely disappeared from them), but CoasterVille and Bubble Safari Ocean are still sitting fairly high up on the list of top-performing Facebook apps. CoasterVille currently holds the No. 2 spot among facebook apps in the 10 million MAU tier and the No. 11 placing in the 1 million DAU tier. Bubble Safari Ocean also sits in the 10 Million MAU tier with the No. 24 spot and the 1 million DAU tier at No. 61. According to Zynga, its number of daily active users shrank 6 percent from 60 million in Q3 2012 to 56 million, though that is up from Q4 2011 when the company had 54 million DAU. Monthly active users also increased year-over-year from 240 million in Q4 2011 to 298 million in Q4 2012. However, MAU was down 4 percent from Q3 2012, when the company had 311 million MAU. Monthly Unique users were also down from last quarter, dropping from 177 million to 167 million, though this is still up from Q4 2011 with 153 million.

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Zynga's earnings report for Q4 2012 shows $311 M in revenue, $48.5 M loss

Mike Thompson

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Mike Thompson