Zynga reports revenues of $329 million and earnings per share of $0.06 in Q1 2012

Whoops everyone, we reorted non-GAAP earnings. Here’s the real skinny from Reuters:

Zynga Inc posted a first-quarter loss of $85 million, or 12 cents a share. Revenue was $321 million, an increase of 32 percent from a year earlier. Analysts on average were expecting revenue of $317.25 million, according to Thomson Reuters I/B/E/S.

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Zynga beat analyst expectations with its first quarter earnings, bringing in $329 million in revenue, and $0.06 in earnings per share. This compares favorable with revenues of $311.2 million in the fourth quarter of 2011, in which the company lost some $435 million, or more than $1 per share.

Analysts had expected earnings per share of $0.05 per share, and revenues of $317 million. In after hours trading, the stock was down, but has since recovered, and is now in the green. How high it will go is anyone’s guess. The quarter represents the company’s strongest yet from a revenue perspective.

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Interestingly, Facebook reported that its dependence on Zynga had gone down, from an revenue share perspective; that Zynga has managed to grow through that may indicate that the firms can work well without one another, that they can indeed be independent.

The company saw continued user growth, perhaps indicating that the company has staying power larger than that of a single hit game:

Monthly active users (MAUs) increased from 236 million in the first quarter of 2011 to 292 million in the first quarter of 2012, up 24% year-over-year.  — almost a third of Facebook’s total users.

Daily active users (DAUs) increased from 62 million in the first quarter of 2011 to 65 million in the first quarter of 2012, up 6% year-over-year.

The company added some six games in the first quarter of 2012, implying that the company is looking hard for its next mega hit.

Perhaps absent from the release was any mention of the Zynga Platform. In the eyes of our own Drew Olanoff: “With the big buzz surrounding the launch of Zynga Platform, a way to in essence build its own discovery engine to distance itself from Amazon Web Services and Facebook, it’s surprising that more details of its success weren’t shared, even if it’s still in beta.” Perhaps we’ll see more on the topic in the second quarter of the year.

For the first quarter of the year, Zynga has managed to put up solid numbers.

The full earnings report from Zynga:

–          Highest Ever Bookings of $329 Million, Up 15% Year-Over-Year and Up 7% From Q4 2011

–          Strong Growth in Player Network with 182 Million Monthly Unique Users, Up 25% Year-Over-Year

–          Zynga Raises Bookings and EBITDA Guidance for Fiscal Year 2012

SAN FRANCISCO, April 26, 2012 (GLOBE NEWSWIRE) — Zynga Inc. (Nasdaq:ZNGA), the world’s leading provider of social game services, today announced financial results for the quarter ending March 31, 2012.

• Q1 record bookings of $329 million, up 15% year-over-year
• Q1 revenue of $321 million, up 32% year-over-year
• Q1 adjusted EBITDA of $87 million, down 23% year-over-year driven primarily by increased investment in new game development
• Q1 non-GAAP EPS of $0.06 and GAAP EPS of ($0.12)

“We’re pleased with the progress that Zynga has made in the first quarter growing our audience reach 25% year over year and nearly 20% quarter over quarter. Our team did a great job launching 5 new games across mobile and web including new hits like Hidden Chronicles, Slingo and Scramble with Friends,” said Mark Pincus, CEO and Founder of Zynga.

Financial Highlights (in thousands, except per share data)

	Quarter ended
Non-GAAP Results	Mar 31, 2012	Mar 31, 2011
Bookings	$329,164	$286,598
Adjusted EBITDA	$86,752	$112,263
Non-GAAP net income	$47,049	$75,415
Non-GAAP earnings per share	$0.06	$0.11
GAAP Results
Revenue	$320,972	$242,890
Net income (loss)	($85,351)	$16,758
Diluted net income (loss) per share	($0.12)	$0.00

Business Highlights

• Daily active users (DAUs) increased from 62 million in the first quarter of 2011 to 65 million in the first quarter of 2012, up 6% year-over-year.
• Monthly active users (MAUs) increased from 236 million in the first quarter of 2011 to 292 million in the first quarter of 2012, up 24% year-over-year.
• Monthly unique users (MUUs) increased from 146 million in the first quarter of 2011 to 182 million in the first quarter of 2012, up 25% year-over-year.
• Average daily bookings per average DAU (ABPU) increased from $0.051 in the first quarter of 2011 to $0.055 in the first quarter of 2012, up 8% year-over-year.
• Monthly Unique Payers (MUPs) increased from 2.9 million in the fourth quarter of 2011 to 3.5 million in the first quarter of 2012, up 21% sequentially.
• Zynga experienced growth in both mobile and web bookings year-over-year and quarter-over-quarter, with the majority of bookings growth coming from mobile.
• Zynga added six games during the first quarter of 2012, including two titles on web-based platforms: Hidden Chronicles, our first game in the hidden object category, and Zynga Slingo, our first game in the arcade category. Zynga added four titles on mobile platforms:Scramble with Friends, Dream PetHouse, Dream Heights, and Draw Something, which we acquired in March 2012.
• As of March 31, 2012, Zynga held eight of the top ten games on Facebook, based on DAUs, including CastleVille, launched in the fourth quarter of 2011, and Hidden Chronicles, launched in the first quarter of 2012.
• In March, we launched the Zynga Platform, which includes Zynga.com (beta release), a new destination for social games, and Zynga Platform Partners, a program that enables third-party developers to publish their games through Zynga.

First Quarter 2012 Financial Summary

• Bookings: Bookings were $329.2 million for the first quarter of 2012, an increase of 15% compared to the first quarter of 2011 and an increase of 7% compared to the fourth quarter of 2011.
• Revenue: Revenue was $321.0 million for the first quarter of 2012, an increase of 32% compared to the first quarter of 2011 and an increase of 3% compared to the fourth quarter of 2011. Online game revenue was $292.8 million, an increase of 27% compared to the first quarter of 2011 and an increase of 3% compared to the fourth quarter of 2011. Advertising revenue was $28.2 million, an increase of 117% compared to the first quarter of 2011 and an increase of 3% compared to the fourth quarter of 2011.
• Adjusted EBITDA: Adjusted EBITDA was $86.8 million for the first quarter of 2012, a decrease of 23% compared to the first quarter of 2011 due primarily to increased investment in developing new games. Adjusted EBITDA was up 28% from the prior quarter.
• Net income (loss): Net loss was $85.4 million for the first quarter of 2012 compared to net income of $16.8 million for the first quarter of 2011. $133.9 million of stock-based expense was included in the net loss for the first quarter of 2012 compared to $14.5 million of stock-based expense included in the first quarter of 2011.
• Non-GAAP net income: Non-GAAP net income was $47.0 million for the first quarter of 2012, a decrease of 38% compared to the first quarter of 2011 and an increase of 27% compared to the fourth quarter of 2011.
• EPS: Diluted EPS was ($0.12) for the first quarter of 2012 compared to $0.00 for the first quarter of 2011.
• Non-GAAP EPS: Non-GAAP EPS was $0.06 for the first quarter of 2012 compared to $0.11 for the first quarter of 2011 and $0.05 for the fourth quarter of 2011.
• Cash and cash flow: As of March 31, 2012, cash, cash equivalents and marketable securities were $1.5 billion, compared to $995.6 million as of March 31, 2011 and $1.9 billion as of December 31, 2011. Cash flow from operations was $78.8 million for the first quarter of 2012, compared to $103.7 million for the first quarter of 2011. Free cash flow was $43.8 million for the first quarter of 2012, compared to$53.4 million for the first quarter of 2011.
• Secondary offering: On April 3, 2012 Zynga completed an underwritten public offering of 49,414,526 shares of its Class A common stock. As part of the offering, all selling stockholders, as well as all officers and directors, agreed to lock-up agreements that extend the transfer restrictions on their shares until at least 90 days following the offering.  The principal purposes of the offering were to facilitate an orderly distribution of shares and to increase the company’s public float. Zynga did not receive any proceeds from the sale of shares in the offering.

2012 Outlook

As of today, we’re updating our outlook for 2012 as follows:

• Bookings are projected to be in the range of $1.425 billion to $1.5 billion. We expect that growth will be weighted towards the second half of the year with slower sequential growth in the first half of the year.
• Adjusted EBITDA is projected to be in the range of $400 million to $450 million.
• Stock-based expense is projected to be in the range of $420 million to $445 million excluding the impact of equity awards that may be granted in connection with potential future acquisitions.
• Capital expenditures are projected to be in the range of $390 million to $410 million which includes the purchase of our corporate headquarters building in April 2012.
• Our effective tax rate for non-GAAP net income is projected to be in the range of 25% to 30%.
• Non-GAAP weighted-average diluted shares outstanding are projected to be approximately 880 million shares in the fourth quarter of 2012.

Full year 2012 non-GAAP EPS is projected to be in the range of $0.23 to $0.29.