Zynga shares up 20% on solid Q4 results

Steven Loeb · January 30, 2014 · Short URL: https://vator.tv/n/34b5

Mobile gaming giant releases earnings report one week early

Zynga surprised everyone on Thursday when it decided to post its quarterly earnings report a week before it was scheduled. And investors could not be happier.

The company, which saw its stock go up 4.09% in regular trading, is now up nearly 21% in after hours, after the company posted earnings that came out ahead of the Street. Shares had been halted following the release of the report earlier today.

This was the good news for Zynga in this report: it came out ahead of expectations by reporting bookings of $147 million on a loss of three cents a share, beating out analyst expectations of $141 million on a loss of four cents.

It reported a net loss of $25 million for the quarter, which was down from a net loss of $49 million for the fourth quarter of 2012 and up from a net loss of $68,000 for the third quarter of 2013.

For the full year 2013, Zynga's bookings were $716 million, a decrease of 38% on a year-over-year basis.

The company also took the opportunity to announce a new acquistion. It bought NaturalMotion, a mobile game and technology developer, for approximately $527 million in cash and equity.

But there was also some bad news in the report, namely when it came to user numbers. Zynga saw its numbers go down significantly from the same period last year, and the company is being forced to cut staff even further.

It's Monthly Unique Players were 1.3 million, less than half of the 2.9 million it was seeing a year ago. They were even down 16% quarter to quarter.

Daily active users (DAUs) dropped to 27 million in the fourth quarter of 2013 were 27 million, from 56 million in the fourth quarter of 2012. They were down 12% from 30 million in the third quarter of 2013. Monthly active users were also down, going from 298 million in Q4 2012 to 112 million in Q4 2013. They also went down 16% from 133 million in the third quarter of 2013.

Zynga also announced a cost reduction plan that will save it up to $35 million next year. It included a workforce reduction of approximately 314 employees or approximately 15% of its current workforce.

Non-adjusted revenue for the quarter was $176 million, a decrease of 43% compared to the fourth quarter of 2012 and a decrease of 13% compared to the third quarter of 2013.

Online game revenue was $152 million, a decrease of 44% compared to the fourth quarter of 2012 and a decrease of 13% compared to the third quarter of 2013.

Advertising revenue was $24 million, a decrease of 35% compared to the fourth quarter of 2012 and a decrease of 15% compared to the third quarter of 2013. FarmVille 2Zynga Poker, andFarmVille accounted for 26%, 21% and 15% of online game revenue, respectively, for the fourth quarter of 2013 compared to 22%, 19% and 18%, respectively, for the third quarter of 2013.

Zynga is projecting revenue for Q1 2014 to be in the range of $1575 million to $165 million, with a projected net loss of between $56 and $49 million.

Non-GAAP loss per share is projected to $0.01, based on a share count of approximately 860 million shares

(Image source: https://www.123rf.com)

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Zynga is the largest social gaming company with 8.5 million daily users and 45 million monthly users.  Zynga’s games are available on Facebook, MySpace, Bebo, Hi5, Friendster, Yahoo! and the iPhone, and include Texas Hold’Em Poker, Mafia Wars, YoVille, Vampires, Street Racing, Scramble and Word Twist.  The company is funded by Kleiner Perkins Caufield & Byers, IVP, Union Square Ventures, Foundry Group, Avalon Ventures, Pilot Group, Reid Hoffman and Peter Thiel.  Zynga is headquartered at the Chip Factory in San Francisco.  For more information, please visit www.zynga.com.