Zynga shares slip 4.9% after reporting a 7% quarter-over-quarter bump in bookings

Zynga swung to a fourth quarterly loss of $435 million on a massive $510 million stock-based compensation charge related to its December public offering. Excluding that charge and other costs, earnings per share were 5 cents, beating an average estimate of 3 cents, according to a Bloomberg survey of analysts.

Zynga says that non-GAAP net income (a measure that isn’t in line with generally accepted accounting principles) is $37.2 million compared to $63.2 million a year before. Again, that’s also not necessarily a fair comparison because Zynga only finished its transition to using Facebook Credits until April 2011. If it had been using Facebook Credits the whole time and giving Facebook a 30 percent revenue share, it would have seen a 65 percent year-over-year increase in revenue.

Still, it looks like traders expected a bigger quarter-over-quarter bump in bookings. Shares are down 4.9 percent in after-hours trading to $13.65.

Zynga’s shares had climbed over the past month in anticipation of a stronger-than-estimated quarter. Facebook’s IPO filing revealed that the platform’s payments revenue grew 20 percent quarter-over-quarter into the end of the year, suggesting that Zynga might see a similar increase.

But Zynga did not see a commensurate bump. The company’s bookings were up just 6.6 percent to $306.5 million from the previous quarter’s bookings of $287.7 million. That said, bookings were up 25.9 percent year-over-year from $243.5 million the year before.

For the full year, bookings 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 is counted 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.

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6 Responses to “Zynga shares slip 4.9% after reporting a 7% quarter-over-quarter bump in bookings”

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    [...] started sharing more details on its cloud service as of yesterday during its Q4 earnings call, stating that about 80% of its games catalog now runs on zCloud instead of on public clouds. A blog [...]

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

  4. Zynga execs selling over 20M shares in secondary offering says:

    [...] recover for a month. The stock has performed erratically since then and seen substantial gains and drops, though the revelation that Zynga accounted for 12 percent of Facebook’s 2011 profits helped [...]

  5. Facebook reports $1.184B in Q2 revenue, 955M monthly active users, 552M daily says:

    [...] billion of share-based compensation and related payroll tax expenses as a result. Zynga took a similar hit when it went [...]

  6. Zynga earnings report Q4 2012 shows $311 M in revenue, $48.5 M loss says:

    [...] 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 [...]

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