Zynga Files S-1, Plans to Go Public and Raise $1 Billion, Overcoming Credits Costs

Zynga, the leading social gaming company on Facebook, has filed to go public today, submitting its S-1 document detailing its business to date and its prospective valuation. The long-speculated numbers are finally in. The company made $597 million in revenues over 2010, with $235 million in revenues for the first quarter of 2011. It expects to raise up to $1 billion in the offering, giving it lots of ammunition for expanding across mobile and social. Although the company also appears to be sitting on nearly $1 billion in cash.

Our Inside Virtual Goods report estimated that Zynga had made over $500 million in 2010, while other reports put it significantly higher.

Net income came in at $90.6 million for 2010, with $11.8 million so far for the first three months of this year. The introduction of Facebook Credits, the exclusive paid virtual currency for virtual goods purchases on Facebook, appears to be cutting into profits as it has been rolled out in recent months.

Here’s some of what Zynga says about Credits and its Facebook business in the doc:

“In July 2010, we began migrating to Facebook Credits as the primary payment method for our games played through Facebook, and by April 2011, we had completed this migration. Facebook remits to us an amount equal to 70% of the face value of Facebook Credits purchased by our players for use in our games. We record bookings and recognize revenue net of the amounts retained by Facebook.”

Facebook has continued to say that its goal around Credits is to make it more profitable than any alternatives for all involved. Investors will now be keen to figure out exactly how effective it might become.

Overall usage is what we’ve regularly covered in our AppData tracking service. It has 148 million monthly unique users, which clarifies the otherwise nondeduplicated total monthly active user count that we track by adding together the traffic for each app on Facebook. The number also includes mobile users. It has 60 million daily active users on Facebook, according to AppData, which it cites.

Bankers on the deal include Morgan Stanley, Goldman Sachs, Bank of America, Merrill Lynch, Barclays Capital, J.P. Morgan and Allen & Co.

Here’s the link to the filing. More to come.

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11 Responses to “Zynga Files S-1, Plans to Go Public and Raise $1 Billion, Overcoming Credits Costs”

  1. Walt says:

    I fu*king knew it. This company’s numbers were WAY overstated by the media. 40% profit margin? 50% profit margin? Ha. Right.

  2. Pincus Sold $109 Million in Stock Back to Zynga in March 2011 says:

    [...] Zynga chief executive Mark Pincus and other early investors sold more than $233 million worth in stock back to the company in both January and March of this year, according to the company’s IPO filing today. [...]

  3. Zynga Reveals Actual Uniques at 148 Million Unique Users says:

    [...] in today’s S-1 filing by Zynga is the fact that the social game developer is revealing its actual unique user count — a [...]

  4. Zynga Shows Off Strong Financials but Questions Remain Around Impact of Credits, Off-Facebook Revenue says:

    [...] been a hectic four years since Zynga launched on the Facebook platform, and in most ways the business the company is now showing off to the public is extremely impressive. Revenue is on a run-rate towards $1 billion this year, following nearly [...]

  5. Zynga Files to Go Public — Our Coverage says:

    [...] Zynga Files S-1, Plans to Go Public and Raise $1 Billion, Overcoming Credits Costs [...]

  6. Zynga Doubled ARPU From Last Year Even as Facebook Platform Changes Slowed Growth says:

    [...] Zynga’s IPO filing on Friday, we finally got some numbers to bear out what had been common, but unproven, industry knowledge: [...]

  7. Zynga Launches PrivacyVille, a Gamification Version of Its Privacy Policies says:

    [...] Zynga edges closer to its initial public offering, the social game developer seems concerned with educating the masses both on social game revenue [...]

  8. What Do Facebook’s Developer Traffic Targets Really Mean for Zynga (and Everyone Else)? says:

    [...] were surprised this month when Zynga published terms of its agreements with Facebook as part of its S-1 filing to go public, because it seemed to show that Facebook was promising traffic for Zynga’s games on web and [...]

  9. Zynga Readies Adventure World Ahead of IPO says:

    [...] first moved toward IPO with an S-1 filling early this summer that has since been amended to include or exclude details on valuation, traffic [...]

  10. Zynga Lists its Shares on Nasdaq, Breaks Out Individual Game Revenues says:

    [...] We’ll have more information for you once we’ve reviewed the amended filing, perhaps including details on how much the developer paid for studio acquisitions in the last year. Zynga first submitted its Form S-1 on July 1. [...]

  11. Inside Social Games · Reuters: Zynga IPO Due Before Thanksgiving says:

    [...] filed its form S-1 back in July and has since made several updates to the document. The most recent update includes a third-party [...]

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