Zynga Drops 9% After Its $192M Q4 Revenue And Guidance Disappoint

Zynga reported its fourth quarter financial performance today after the bell, including revenue of $192.5 million and earnings per share of $0.00. Investors had expected the company to earn $0.00 on revenue of $201.11 million. The firm also reported bookings in the quarter of $182.4 million.

The company’s flat earnings per share is based on adjusted profit. Using normally accepted accounting methods, Zynga lost $45.13 million, or $0.05 per share. In the year-ago period, Zynga had revenue of $176.36 million, on which it lost $25.24 million, or $0.03 cents per share. So, Zynga grew its revenue by just over 9 percent in the last year.

Zynga announced in its earnings that it will close its games studio in China, impacting 71 employees. The company anticipates savings of $7 million per year.

The company was off around 5 percent today in regular trading, and, following its missed earnings has tanked nearly 10 percent after hours.

On a more positive note, Zynga has cash and equivalents of $1.15 billion, and saw its “monthly mobile consumers” rise 87 percent on a year-over-year basis. So, the company has plenty of cash to keep growing its mobile business.

Zynga, a company that grew massively on the back of Facebook’s platform years ago, struggled to execute a shift to mobile gaming. The company’s revenue’s slid from north of $300 million, to under $200 million. The company hired a new CEO, Don Mattrick, from Microsoft to aid in its turn around.

International revenue, as compared to top line from domestic sources, totaled 35 percent, a figure that is inside the normal band of deviation for the gaming company.

On the vanity metric side of GAAP, Zynga reported that it had 25 million daily active users (DAUs), and 108 million monthly active users (MAUs). Those compare to the sequentially preceding quarter’s 26 million, and 112 million, respectively.

The company’s revenue miss does not fully explain why Zynga is down as sharply as it is in after-hours trading. The rest of that answer guidance. The company anticipates that it will generate between $155 and $165 million in revenue, and lose between $60 and $52 million. On an adjusted basis, Zynga expects to lose $0.03 to $0.02 in the current quarter.

Investors had anticipated that it would report flat adjusted profit, and revenue of $200.87 million. Ouch.