Zynga Seeks Turnaround as Q4 Numbers Emerge

By Steve Anderson February 06, 2013

Zynga hasn't exactly been having an easy time of things in the last few months, and while the numbers are showing some signs that the company isn't out of the game just yet, it's also going to have quite a time trying to make a comeback fully realized.

The firm has released its fourth-quarter numbers, and they show something of a mixed picture.

One of the biggest items on the roster of fourth quarter announcements was that full-year 2012 revenue was $1.28 billion – up fully 12 percent over the same time last year. But bookings came in at $1.15 billion, down 1 percent on the year. Zynga reported a full year net loss of $209 million, with a GAAP earnings per share of $0.28. Fourth quarter revenue came in at $311 million, flat over the same time last year, and bookings fell 15 percent to $261 million.

The fourth quarter was a major blow to Zynga, as it recorded a net loss for the quarter of $48.6 billion.

There were certainly some upsides for Zynga, as it capitalized on previous successes to bring out "FarmVille2" and keep the FarmVille brand going. The monthly audience for "Zynga Poker" saw some nice uptrend as well, with the audience growing 8 percent. Zynga's advertising efforts also saw a boost, which gave it a sound revenue count that let the company beat market expectations.

Work is steadily progressing on bringing its online gambling component to the U.K., and cash flow overall was actually up from the third quarter despite a share buyback effort. Both daily and monthly active users saw some gains as well.

But Zynga is also going to have serious challenges in the coming days. The firm’s third-party publishing efforts, featuring games like "Phosphor's Horn" and "Fat Pebble's Clay Jam," among others, will reportedly not have much impact on revenue for 2013. The first quarter will see fewer games launching overall, as Zynga redirects its focus to games that have the potential to become franchises and act on them accordingly.

There was a slight dip in mobile customers too, and if it sticks around, could represent some problem.

Looking forward, Zynga is projecting a net loss from $12 million to $32 million in the first quarter, but adjusted EBITDA is looking at a break-even point. Cuts in employees gave Zynga some room to breathe, but concerns were expressed about the losses in the leadership roster – though CEO Mark Pincus did highlight some key promotions and expressed faith in his management team.

There are some key questions that Zynga could stand to answer, especially its performance in the steadily growing mobile device sector – more mobiles, more opportunity, but Zynga needs to get some more skin in that game – as well as what it’s doing to get more users into the fray that aren't coming in from Facebook.

Moreover, we know Zynga is looking to bring out fewer games, but it’s badly in need of some growing revenue streams. The developers could use a few clearer plans about using what new games they do have coming out to get the growth restarted.

The next few months could be very important ones for Zynga, and may well represent the difference between complete shutdown and recovery into a vibrant future.




Edited by Braden Becker

Contributing TechZone360 Writer

SHARE THIS ARTICLE
Related Articles

Tables are Turned as Hackers are Hacked

By: Andrew Bindelglass    7/6/2015

In an ironic turn of events, one of the world's largest providers of surveillance technology was hacked last night. The Hacking Team is an Italian-bas…

Read More

VR Paint Allows You to Color Your World

By: Andrew Bindelglass    7/6/2015

Microsoft Research Labs has announced their newest augmented reality project, dubbed Semantic Paint. The project is essentially a way to bring Microso…

Read More

California Kill-Switch Law Set to Go into Effect

By: Andrew Bindelglass    7/6/2015

The use of smartphones in the United States has skyrocketed over the past decade, and with that growth has come an increase in functionality. In addit…

Read More

Adidas to Launch Shoe Created from Ocean Waste

By: Andrew Bindelglass    7/6/2015

Making shoes using materials from post-consumer products is hardly a new trend. Various independent companies have created shoes from old soda bottles…

Read More

Severed Internet Cables Causing Massive Outages in Bay Area

By: Joe Rizzo    7/2/2015

At 4:20 am. on Tuesday morning, three fiber optic cables providing Internet access to Sacramento were physically cut leaving California's capital with…

Read More