Zynga swings to loss but revenues surge
ZYNGA, the US developer of games for social networking sites, fell to a $435m (£277m) quarterly loss last night despite beating Wall Street revenue expectations in its first results as a public company.
Revenue soared 59 per cent to $311.2m, edging past analysts’ forecasts of $301.08m, as the FarmVille creator reported a 13 per cent rise in “daily active users” to 54m in the final three months of last year.
Founder and chief executive Mark Pincus said: “Zynga set new records in the year in terms of audience size, revenues and bookings. We saw great momentum in mobile and advertising and ended the year with a strong pipeline of new games.”
It posted a $435m fourth quarter net loss, or $1.22 a share, however, contrasting with net income of $43m, or five cents a share, a year earlier.
Since then Zynga has gone public and admitted it relies on Facebook for 90 per cent of revenues. Similarly Mark Zuckerberg’s firm declared in an SEC filing this month that 12 per cent of its revenue comes from the gaming company.
The firm said costs rose dramatically to $797.8m, with $510m in payments linked to employee stock options helping push up its outgoings.
Zynga publishes free games and makes money from selling virtual items, such as tractors and weapons, to be used by players. It floated at $10 per share in December, raising $1bn.
Zynga’s shares were trading at $13.93 after hours, down 2.9 per cent, after closing at $14.35 on the Nasdaq.