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.

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 in with monthly active users) and the 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 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. That’s down from the $1.92 billion it had in Q4 2012, but the company 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).

Following last quarter’s lowered 2012 guidance, the company was able to meet its projected estimated bookings between $1 to $1.1 billion (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.

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.

We’ll continue to update this story as we further examine the company’s earnings report and listen to the earnings call, set to begin shortly.

Developing.

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Facebook shares back up to $28; company to report Q4 earnings Jan. 30

Facebook shares are up 5 percent today, closing at $28 on the first day of trading in 2013. The company also set the date for its 2012 fourth quarter earnings call: Jan. 30 at 2 p.m.

Today’s share price is as high as it has been since Dec. 13. This is only the third time Facebook has reached or exceeded $28 a share since late July.

The surge today is likely related to a number of analysts’ upgrades. Bank of America Merrill Lynch released a report predicting that Facebook’s mobile ad revenue will surpass its desktop revenues in 2014. BAML analysts expect Facebook to report 37 percent growth when it releases results for Q4.

BMO Financial Group upgraded Facebook stock from “underperform” to “outperform” and upped its price target from $15 to $32. J.P. Morgan Securities increased its price target to $35 from $29.

Facebook reported $1.262 billion in revenue for the third quarter of 2012 – a 32 percent increase year over year. On Jan. 30, we’ll get a look at how Facebook’s advertising business fared during the holiday season and an idea of how Facebook Gifts may be contributing to revenue growth in the U.S.

Related article: How Facebook’s latest monetization efforts may take shape in 2013

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Zynga shares endure a brutal day, dropping nearly 18% after first earnings report

Zynga’s shares endured a brutal day today, dropping almost 18 percent to $11.80, after the company’s first earnings report as a publicly-traded entity. That wiped out more than $1.7 billion from the company’s market capitalization.

Yesterday, Zynga did beat analysts estimates, with earnings of 5 cents a share excluding a massive, one-time $510 million charge related to the initial public offering. Analysts on average had estimated Zynga would earn 3 cents a share, according to a Bloomberg survey.

But it looks like traders — who had bid the stock up more than 35 percent since the day before Facebook filed for an initial public offering — were hoping for more.

In Facebook’s IPO filing at the beginning of the month, the company said it had a 20 percent quarter-over-quarter increase in payments revenue, suggesting that developers like Zynga might see a comparable boost. But Zynga’s bookings grew about 7 percent quarter-over-quarter to $306.5 million from the previous quarter’s bookings of $287.7 million.

It suggests that Facebook, which Zynga is dependent on for 93 percent of its revenue, is diversifying its payment revenue sources while Zynga has yet to prove that it can truly live off the social network’s platform.

At the same time, research and development costs are rising as Zynga aims to produce another CastleVille-class hit on Facebook, mobile and more. Costs popped this quarter in part because of a $510 million one-time charge related to stock-based compensation around the initial public offering plus infrastructure investment to move server and hosting expenses off Amazon. Just today, the company point to how much it had invested in its own cloud hosting services, saying that nearly 80 percent of its games are self-hosted.

Zynga is also looking to break away from Facebook this year with its own games network, titled Z-Live or Zynga Direct. Though no launch date is set for the service, Zynga confirmed during its earnings call yesterday that it was in closed beta — and we’ve heard rumors that the service may publish third-party games too.

Zynga also did not break out any new mobile statistics beyond daily active usage for its emerging iOS and Android business the way that comparable publicly traded companies like Electronic Arts do. It said only that it had 15 million daily active users on mobile, up five-fold from a year before. Zynga’s mobile gaming business is likely to be more dependent on advertising than virtual goods compared to many other mobile-social gaming companies because of the huge footprint that Words With Friends has.

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UK Facebook users could soon gamble their earnings away (for real)

As in, gamble their real cash away with the chance of actually winning money in return. According to eGaming Review (eGR) [paywall link], Facebook is talking with a number of UK to possibly open up its platform to real-money gambling. And the change could happen as soon as the first quarter in 2012. We can almost hear the sobs of British men in the gutter already from bad Zynga Poker matches.

eGR reports, citing anonymous sources (of course), that Facebook is considering providing eight licenses to UK operators looking to get into a market that developers are already trying to crack. According to the website, Facebook is already staffing up in preparation for the initiative. This type of thing is likely years away from happening in the US, where online gambling is, for all intents and purposes, illegal.

The UK-based online gambling companies in question reportedly include Gamesys and 888 Holdings. However, more details on how age gates, payment solutions or revenue splits between Facebook and the companies would work aren't available. The website speculates that Facebook could be using the UK as a testbed for similar efforts in other countries.

The news comes as particularly striking considering the number of mock-casino and betting games that have hit Facebook in recent months from DoubleDown Casino to Yazino's games and Bet Tycoon, to name a few. In fact, Yazino CEO Hussein Chahine thinks that the social gaming market would be vastly different today if not for how the US handled online gambling prior to the rise of the genre. Well, it looks like those floodgates are about to open--at least elsewhere in the world.

[Via TechCrunch]

[Image Credit: Gabriel Not]

Would you ever gamble real money on a Facebook game? What do you think is the likelihood of such games hitting the US? Sound off in the comments. Add Comment.

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