Zynga - Revenue

Revenue

According to the company’s first-ever earnings report, revenues from advertising and the sale of virtual goods grew by 59 percent compared with the same period the prior year. A net loss of $435 million included a one-time $510 million employee stock compensation expense that was triggered by the company going public.

The company's top three games – FarmVille, FrontierVille and CityVille – accounted for 57 percent of online game revenue. Total revenue was $329 million for the quarter ending March 31, 2012.

Zynga approached a billion dollars in revenue in four years since inception, surpassing the market value of the longtime console game company Electronic Arts. Zynga's rapid growth has been seen as an indicator of the vastly different playing field from only a few years before, where games have become able to gain significant public acceptance in a shorter period of time, with the cost of entry being much lower.

On July 25th 2012, Zynga reported revenue of $332 million for its Q2 2012, which was up 19 percent year over year, and reported that Q2 bookings increased 10 percent year over year. However, the company also reported a net income loss of $22.8 million, and reduced forecast for bookings for 2012 from 1.47 billion to 1.15 billion. Following Zynga’s weak Q2 2012 earnings, Zynga’s stock dropped by 40 percent in after hours trading, and analysts heavily criticized Zynga, with Richard Greenfield of BTIG taking the rare step of apologizing for having recommended the stock. Zynga executives listed several reasons for the Q2 earnings: changes to Facebook's gaming platform that hindered Zynga users; a delayed release for an important new game; and several new games that didn’t meet expectations.

In late October 2012, Zynga's stock price increased as much as 16 percent after it had posted revenues of $317 million during its third quarter, beating estimates of $256 million. Its revenue boost and stock price jump was a result of Zynga's $200 million share buyback plan that the company decided to instill to help improve its recent stock price declines. Another factor included Zynga's announcement that it was moving into real-money gambling in the U.K. While acknowledging Zynga’s continuing challenges such as slowing sales and its low stock price, some analysts were more upbeat after the Q3 2012 earnings than they had been after Q2 2012 earnings were announced. “Every single thing that they are doing is what you would want them to do,” said Michael Pachter, an analyst with Wedbush Securities Inc. Comparing Q2 to Q3 earnings conference calls, journalists noted a change in former CEO Pincus’ tone. “Instead of blaming an uncertain economy, wandering consumer tastes or a weird alignment between Jupiter and Mars, the former CEO's message to Wall Street was clear: Blame us,” wrote CNET.

In early 2013, Zynga former CEO Mark Pincus announced that FarmVille, one of Zynga's most popular games, had reached $1 billion in total player bookings.