Social gaming giant Zynga just released its fourth quarter earnings, the company’s first earnings release as a public company. Analysts expected earnings of $0.03 per share on revenue of $302 million. Zynga beat the street, with revenue coming in at $311.2 million for the fourth quarter of 2011, an increase of 59% compared to the fourth quarter of 2010. In terms of Diluted EPS, Zynga took s a loss ($1.22) for the fourth quarter of 2011 compared to $0.05 for the fourth quarter of 2010. Non-GAAP EPS was $0.05 for the fourth quarter of 2011 compared to $0.09 for the fourth quarter of 2010.
CEO and Founder Mark Pincus said in a release, “2011 was another milestone year for Zynga’s mission of connecting the world through games. We are seeing social games and more broadly play become one of the most popular pastimes on web and mobile. 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. We are excited about the opportunities in front of us to continue delighting our current players and to bring play to millions of new people.”
In terms of income, the company took a net loss of $435 million for the fourth quarter of 2011, which included $510 million of stock-based compensation expense for restricted stock units issued to employees that, in accordance with GAAP, was previously unrecognized until triggered by our initial public offering.
Zynga says bookings, which are its non-GAAP (Generally Accepted Accounting Principles) measure, were at a record level of $306.5 million for the fourth quarter of 2011, an increase of 26% compared to the fourth quarter of 2010 and an increase of 7% compared to the third quarter of 2011. Online game revenue was $283.9 million, an increase of 51% compared to the fourth quarter of 2010. Advertising revenue was $27.3 million, an increase of 230% compared to the fourth quarter of 2010.
In terms of traffic and user stats, Daily active users increased from 48 million in the fourth quarter of 2010 to 54 million in the fourth quarter of 2011, up 13%. Monthly active users increased from 195 million in the fourth quarter of 2010 to 240 million in the fourth quarter of 2011, up 23%.
Monthly unique users increased from 111 million in the fourth quarter of 2010 to 153 million in the fourth quarter of 2011, up 38%. And average daily bookings per average DAU increased from $0.055 in the fourth quarter of 2010 to $0.061 in the fourth quarter of 2011, up 11%. Monthly unique payers, which is a key stat for revenue, increased marginally from 2.6 million in the third quarter of 2011 to 2.9 million in the fourth quarter of 2011, up 13%.
The company also reported a growth in usage of mobile games in Q4 primarily from titles Dream Zoo, Words with Friends and Zynga Poker, which were among the top 10 grossing games on the iOS platform during the quarter.
For the full year, Zynga says bookings were at a record level of $1.16 billion in 2011, an increase of 38% on a year-over-year basis. Revenue came in at $1.14 billion in 2011, an increase of 91% on a year-over-year basis. Online game revenue was $1.07 billion, an increase of 85% on a year-over-year basis. Advertising revenue was $74.5 million, an increase of 226% on a year-over-year basis.
Non-GAAP net income was $182.5 million in 2011, a decrease of 24% year-over-year, which was due to the increased investment in developing new games.
In terms of projections for the full year, bookings are projected to be in the range of $1.35 billion to $1.45 billion. Zynga also warns that growth will be weighted towards the back-half of the year with slower sequential growth in the first half of the year.
As we’ve reported in the past, Zynga has had a bit of a rough start on the public markets, as investors are a little unsure what to make of the company considering it’s the first Facebook-oriented virtual goods business to be publicly traded. The stock has fluctuated below its $10 initial share price since the company went public in the middle of December amid concerns over a heavy reliance on Facebook for traffic, over the small number of paying users for most of its revenue, as well as its mostly flat traffic.
But in late January, Zynga’s stock rating got a boost, and traffic numbers are up. New game launches such as Hidden Chronicles and Scramble With Friends, as well as a resurgence in usage of older games like Zynga Poker have helped boost traffic numbers for Zynga.
Additionally, the news that Zynga will be introducing legal gambling to its games portfolio also helped drive the stock value up.
And with the release of Facebook’s S-1, we learned that Zynga accounted for 12 percent of the social network’s revenue in 2011, through a combination of virtual goods payments and advertising (you can see more information on Zynga and Facebook’s agreement here). And clearly, Facebook’s payments business is growing. Investors are more bullish on Zynga and these earnings should help.
It’s clear Zynga is looking for other revenue streams and recently struck a big licensing deal with Hasbro to turn games like FarmVille, CityVille, and its other hit titles into real world products and toys.
You can follow the earnings call, which is set to take place at 2 pm PT, below.
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