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Zynga slightly beats target in first quarterly results report

Today, Zynga issued its very first quarterly earnings report as a publicly traded company, and it fell in just slightly above analyst expectations with $311 million in revenue.
Social networking giant Zynga slightly beat targets in its first quarterly earnings report as a publicly traded company. For its fiscal fourth quarter ended December 31, 2011, Zynga reported revenues of $311 million, just above an analyst consensus of $302 million, and up from $196 during the same time period in 2010. The company, as expected, reported a loss for the quarter: the $435 million in losses was due primarily to the $510 million in stock-based compensation the company had to pay its employees when it went public. The company also reported consistent growth across its games network, noting that it saw 54 million users during its fourth quarter, up 13 percent from the 48 million users in the fourth quarter of 2010. Monthly active users saw a full 38 percent jump to 153 million, up from 111 million. Alongside this growth, Zynga found even more users willing to pay for its suite of free-to-play titles. For the fourth quarter, monthly unique payers hit 2.9 million, up 13 percent from the 2.6 million payers in the fiscal third quarter. In terms of its individual titles, Zynga said it saw strong growth for mobile games such as Dream Zoo, Words With Friends, and Zynga Poker. In all, its mobile audience hit 15 million daily active users in 2011. On the social side, Zynga said that in terms of daily active users, it had the top 5 most played games on Facebook by the end of the quarter, one of which was its recent Q4 release, CastleVille. While CastleVille ended up exceeding expectations, other titles didn't fare as well. During its investor conference call, Zynga's John Schappert said that titles such as Mafia Wars 2, YoVille, and Treasure Isle all fell below expectations for the quarter. In terms of its overall head count, Zynga confirmed during its conference call that it employed 2,846 individuals by the end of 2011, up 96 percent from 2010 and up 2 percent from its fiscal third quarter. When looking at its full 2011 fiscal year, Zynga reported revenues of $1.14 billion, up from $597 million in 2010. In all, the company lost $404.3 million, compared to profits of $90 million year over year. Looking forward to 2012, Zynga said it expects to pull in $1.35 billion to $1.45 billion for the full year. It expects most of that growth to occur in the second half of that period, with slower growth throughout the early months of the year. Just before Zynga released its earnings report, its stock price jumped significantly, reaching an all time high of $14.55 during the day. By market close, its stock price landed at $14.35 per share, up 6.95 percent overall. While Zynga had a rough start on the stock market when it made its IPO in December, the company has since seen its luck turn around, with stock prices rising fairly regularly, especially since Facebook revealed that Zynga makes up a full 12 percent of its revenue.

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