[Techtaffy Newsdesk]

Zynga has announced financial results for the fourth quarter and full year ended December 31, 2011.

Mark Pincus (Founder and CEO, Zynga): 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.

Business Highlights

  • Daily active users (DAUs) increased from 48 million in the fourth quarter of 2010 to 54 million in the fourth quarter of 2011, up 13%.
  • Monthly active users (MAUs) increased from 195 million in the fourth quarter of 2010 to 240 million in the fourth quarter of 2011, up 23%.
  • Monthly unique users (MUUs) increased from 111 million in the fourth quarter of 2010 to 153 million in the fourth quarter of 2011, up 38%.
  • Average daily bookings per average DAU (ABPU) increased from $0.055 in the fourth quarter of 2010 to $0.061 in the fourth quarter of 2011, up 11%.
  • Monthly Unique Payers (MUPs) increased from 2.6 million in the third quarter of 2011 to 2.9 million in the fourth quarter of 2011, up 13%.
  • Zynga launched 12 games during 2011, including 4 titles on web-based platforms and 8 titles on mobile platforms.
  • As of December 31, 2011, Zynga had the top 5 most played games on Facebook, based on DAUs, including CastleVille, which launched in the fourth quarter of 2011 and reached 7 million DAUs in two weeks.
  • Zynga saw strong growth from mobile games in Q4 primarily from titles Dream Zoo, Words with Friends and Zynga Poker. These three games were among the top 10 grossing games on the iOS platform during the quarter.

 

2011 Annual Financial Summary

  • Bookings: Bookings were $1.16 billion in 2011, an increase of 38% on a year-over-year basis.
  • Revenue: Revenue was $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.
  • Adjusted EBITDA: Adjusted EBITDA was $303.3 million in 2011, a decrease of 23% year-over-year, largely due to our increased investment in developing new games.
  • Net income (loss): Net loss was $404.3 million in 2011, which included $510 million of stock-based compensation expense for restricted stock units issued to employees.
  • EPS: Diluted EPS was ($1.40) for the full year 2011, compared to 11 cents for the full year 2010.
  • Cash flow: Cash flow from operations was $389.2 million for the full year 2011 compared to $326.4 million for the full year 2010. Free cash flow was $137.3 million for the full year 2011 compared to $309.3 million for the full year 2010.

 

Fourth Quarter Financial Summary

  • Bookings: Bookings 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.
  • Revenue: Revenue was $311.2 million for the fourth quarter of 2011, an increase of 59% compared to the fourth quarter of 2010 and an increase of 1% 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.
  • Adjusted EBITDA: Adjusted EBITDA was $67.8 million for the fourth quarter of 2011, a decrease of 34% year-over-year due primarily to our increased investment in developing new games, and an increase of 17% from the prior quarter.
  • Net income (loss): Net loss was $435.0 million for the fourth quarter of 2011, which included $510 million of stock-based compensation expense for restricted stock units issued to employees.
  • EPS: Diluted EPS was ($1.22) for the fourth quarter of 2011 compared to 5 cents for the fourth quarter of 2010.
  • Cash and cash flow: As of December 31, 2011, cash, cash equivalents and marketable securities were $1.92 billion, compared to $738.1 million as of December 31, 2010. Cash flow from operations was $164.0 million for the fourth quarter of 2011, compared to $57.8 million for the fourth quarter of 2010. Free cash flow was $101.9 million for the fourth quarter of 2011, compared to $86.4 million for the fourth quarter of

 

2012 Outlook

  • Bookings are projected to be in the range of $1.35 billion to $1.45 billion. Zynga expects that growth will be weighted towards the back-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 $390 million to $440 million.
  • Stock-based compensation expense is projected to be in the range of $400 million to $425 million excluding the impact of equity awards granted in connection with potential future acquisitions.
  • Capital expenditures are projected to be in the range of $140 million to $160 million.