Online social games developer Zynga Inc. (ZNGA) said Tuesday that it swung to a fourth quarter loss, hurt by huge stock-based compensation expenses that were previously unrecognized until triggered by the company's initial public offering in mid-December. Quarterly revenue rose 59% from last year on strong bookings growth.
Excluding items, the company's adjusted earnings per share came in above analysts' expectations. At the same time, the company forecast full year 2012 earnings above analysts' current consensus estimate.
This marks the company's first quarterly earnings report as a public company. Zynga shares began trading on the on the Nasdaq Global Select Market following a $1 billion initial public offering.
Zynga shares are currently trading down 4.40% in after hours after closing Tuesday's regular trading session at $14.35, up 93 cents or 6.95%.
Zynga is the world's largest developer of online social games. It was founded by Mark Pincus in January 2007 and named after his late American Bulldog Zinga. The company's offerings include FarmVille, CityVille, Words With Friends, CastleVille, and Zynga Poker.
Zynga's games are popular in social networking sites such as Facebook and on mobile platforms. The San Francisco-based company offers games for free, deriving its revenues through sale of virtual goods that enhance gaming experience, as well from advertising.
Facebook Inc. disclosed in its own IPO filing that Zynga accounted for 12% of its $3.7 billion revenue last year.
Under a global partnership announced last week, toy maker Hasbro, Inc. (HAS) has been granted the license to develop products based on Zynga's games and brands.
Zynga said Tuesday that daily active users of its games increased 13% year-over-year to 48 million in the fourth quarter, while monthly active users grew 23% to 240 million.
As of December 31, Zynga had the top 5 most played games on Facebook, including CastleVille, which launched in the fourth quarter and reached 7 million daily active users in two weeks.
The company also saw strong growth from mobile games during the quarter, mainly from titles Dream Zoo, Words with Friends and Zynga Poker.
The company's bookings increased 26% to a record $306.5 million in the fourth quarter.
For the fourth quarter, Zynga reported a net loss of $435.0 million or $1.22 per share, compared to net income of $43.0 million or $0.05 per share for the year-ago quarter.
The latest quarter results include $510 million of stock-based compensation expense.
Excluding items, adjusted net income for the fourth quarter fell to $37.2 million or $0.05 per share from $63.2 million or $0.09 per share in the prior year quarter.
Revenue for the fourth quarter rose 59% to $311.24 million from $195.76 million a year ago. Analysts polled by Thomson Reuters expected the company to earn $0.03 per share on revenue of $302 million for the fourth quarter. Analysts' estimates typically exclude special items.
Online game revenue for the quarter rose 51% from a year earlier, while advertising revenue jumped 230% from last year.
Looking forward, the company forecast full year 2012 adjusted earnings of $0.24 to $0.28 per share. Analysts currently expect the company to earn $0.22 per share for the full year 2012.
The company also projected its 2012 bookings in the range of $1.35 billion to $1.45 billion.
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