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"Today Zynga reported its quarterly performance, with revenues of $317 million and non-GAAP earnings per share of $0.00. On a GAAP basis, the company lost $0.07 per share.\r\n\r\nThe company had previously pre-announced its earnings, with expectations of revenue between\u00A0$300 million and 305 million. On a non-GAAP basis, Zynga expected to lose a cent per share, or lie flat. On a GAAP basis, the firm expected to be deeply negative. The company generally\u00A0outperformed\u00A0expectations. In perspective, however, Zynga's revenues were up just 3% on a year-over-year basis.\r\n\r\nCritically, the company was net cash positive from its operations in the quarter by some $30 million.\u00A0Zynga anticipates earnings in the fourth quarter of $0.02 to $0.03. The company also intends to buy back some 200 million shares.\r\nThe company's highly negative financial GAAP performance bears in mind its steep writedown - impairment charge, if you must - of its purchase of the gaming company OMGPOP. The company's hit from that purchase was a significant\u00A0percentage\u00A0of the total dollar value the deal.\r\nAdding to the painful quarter, yesterday the firm\u00A0abruptly\u00A0fired 100 of its staff, a 5% reduction, during Apple's event, a move that was widely viewed as designed to avoid bad press. It didn't work. The company's stock has fallen from highs in the teens to just over $2. In normal trading, Zynga bounced around, managing to be both up and down during the day.\r\n\r\nThe firm's CEO, in a note to investors, acknowledged the rough patch that his company has navigated: &amp;quot;the last several months have been challenging for us.&amp;quot; Get that man an award for understatement.\r\n\r\nThe company is up sharply in after-hours trading, thus far climbing more than 15%. That Zynga managed to right its ship, in a sense, is something that could help it turn around the currently negative narrative that surrounds the company. The rise in its stock could also help it retain employees perhaps\u00A0disappointed\u00A0in its performance thus far as a public company.\r\n\r\nPerhaps troubling is that even as the firm's monthly and daily active user counts are rising on a quarterly basis, its bookings from that activity are down:\r\nAverage daily bookings per average DAU (ABPU) decreased from\u00A0$0.058\u00A0in the third quarter of 2011 to\u00A0$0.047\u00A0in the third quarter of 2012, down 19% year-over-year.\r\nThat could indicate that the company is having a harder time monetizing new titles, as its older hits age. FarmVille 2, however, appears to be breaking fresh ground for the company.\r\n\r\nWhat follows is Zynga's earnings release, with charts excised:\r\nSAN FRANCISCO,\u00A0Oct. 24, 2012\u00A0(GLOBE NEWSWIRE) --\u00A0Zynga Inc.\u00A0(Nasdaq:ZNGA), the world's leading provider of social game services, today announced financial results for the third quarter ended\u00A0September 30, 2012.\r\n\r\n\tQ3 Revenue of\u00A0$317 million, up 3% year-over-year, nine months year-to-date revenue of\u00A0$970 million, up 17% year-over-year\r\n\tQ3 Bookings of\u00A0$256 million, down 11% year-over-year, nine months year-to-date bookings of\u00A0$886 million, up 4% year-over-year\r\n\tQ3 EPS of\u00A0($0.07), down from\u00A0$0.00\u00A0in the third quarter of 2011, nine months year-to-date EPS of\u00A0($0.22), down from\u00A0$0.00\u00A0in the first nine months of 2011\r\n\tNon-GAAP EPS of\u00A0$0.00, down from\u00A0$0.04\u00A0in the third quarter of 2011, nine months year-to-date non-GAAP EPS of\u00A0$0.06, down from$0.20\u00A0in the first nine months of 2011\r\n\r\n&amp;quot;While the last several months have been challenging for us,\u00A0Zynga\u00A0remains well positioned to capitalize on the growth of social gaming. We're implementing a number of steps to drive long-term growth and profitability. The successful launches of FarmVille 2 and ChefVille in the third quarter demonstrate that when we develop great games, our large player audience engages. It's more clear than ever that along with search, shop, and share, play is a fundamental pillar of the Internet, and\u00A0Zynga\u00A0continues to be the leader,&amp;quot; said\u00A0Mark Pincus, CEO and Founder,\u00A0Zynga.\r\n\r\nBusiness Highlights\r\n\r\n\tDaily active users (DAUs) increased from 54 million in the third quarter of 2011 to 60 million in the third quarter of 2012, up 10% year-over-year.\r\n\tMonthly active users (MAUs) increased from 227 million in the third quarter of 2011 to 311 million in the third quarter of 2012, up 37% year-over-year.\r\n\tMonthly unique users (MUUs) increased from 152 million in the third quarter of 2011 to 177 million in the third quarter of 2012, up 17% year-over-year.\r\n\tAverage daily bookings per average DAU (ABPU) decreased from\u00A0$0.058\u00A0in the third quarter of 2011 to\u00A0$0.047\u00A0in the third quarter of 2012, down 19% year-over-year.\r\n\tMonthly Unique Payers (MUPs) decreased from 4.1 million in the second quarter of 2012 to 3.0 million in the third quarter of 2012, down 28% sequentially, largely driven by\u00A0Draw Something.\r\n\tZynga\u00A0launched four games during the third quarter of 2012, including two titles on web-based platforms:\u00A0ChefVille, a social 'ville-style cooking game, and\u00A0FarmVille 2,\u00A0Zynga's\u00A0next-generation game built entirely in 3D and the new chapter in its\u00A0FarmVille\u00A0legacy; and two titles on mobile platforms:\u00A0Gems With Friends, the sixth title in the With Friends franchise, and\u00A0Montopia, a role-playing game that challenges players to collect monsters through an adventure.\r\n\tWe are seeing positive early results from the recent launches of\u00A0ChefVille\u00A0and\u00A0FarmVille 2.\u00A0FarmVille 2\u00A0already has 60 million monthly active users according to AppData with approximately 500,000 unique payers.\r\n\tAs of\u00A0September 30, 2012,\u00A0Zynga\u00A0held five of the top ten games on Facebook, based on DAUs as reported by AppData, including some of its most established titles,\u00A0Words With Friends\u00A0and\u00A0Zynga Poker, and some of its newest games,\u00A0Bubble Safari, ChefVille,\u00A0andFarmVille 2.\r\n\tIn the third quarter of 2012,\u00A0Zynga\u00A0continued to expand its platform offering for third-party publishers and introduce players to new gaming genres, launching five partner games on\u00A0Zynga.com\u00A0\u2014 Sava Transmedia's\u00A0Rubber Tacos, RocketPlay's\u00A0Sports Casino,\u00A0Majesco Entertainment Company's\u00A0Mini Putt Park, 50 Cubes'\u00A0Fashion Designer,\u00A0and Row Sham Bow's\u00A0Knights of the Rose.\u00A0The Company also welcomed nine new partners, including\u00A0Antic Entertainment, Big Bite Games, CrayonPixel, Eruptive Games, JamRT, The Method, Playnery, RocketPlay, and TikGames.\u00A0Zynga's\u00A0third-party mobile offerings also took flight with its first game launch \u2014\u00A0Horn\u00A0by Phosphor Games.\r\n\r\nThird Quarter 2012 Financial Summary\r\n\r\n\tRevenue:\u00A0Revenue was\u00A0$316.6 million\u00A0for the third quarter of 2012, an increase of 3% compared to the third quarter of 2011 and a decrease of 5% compared to the second quarter of 2012. Online game revenue was\u00A0$285.6 million, a decrease of\u00A0$2.3 million\u00A0compared to the third quarter of 2011 and a decrease of 2% compared to the second quarter of 2012. Advertising revenue was\u00A0$31.1 million, an increase of 64% compared to the third quarter of 2011 and a decrease of 24% compared to the second quarter of 2012.\r\n\tBookings: Bookings were\u00A0$255.6 million\u00A0for the third quarter of 2012, a decrease of 11% compared to the third quarter of 2011 and a decrease of 15% compared to the second quarter of 2012.\r\n\tNet income (loss):\u00A0Net loss was\u00A0$52.7 million\u00A0for the third quarter of 2012 compared to net income of\u00A0$12.5 million\u00A0for the third quarter of 2011.\u00A0Net loss for the third quarter of 2012 included an impairment charge of\u00A0$95.5 million\u00A0related to the intangible assets previously acquired in connection with our purchase of\u00A0OMGPOP. Net loss for the third quarter of 2012 also included\u00A0$37.8 million\u00A0of stock-based expense compared to\u00A0$22.6 million\u00A0of stock-based expense included in the third quarter of 2011.\r\n\tNon-GAAP net income (loss):\u00A0Non-GAAP net loss was\u00A0$0.4 million\u00A0for the third quarter of 2012, down from non-GAAP net income of$31.7 million\u00A0in the third quarter of 2011 and non-GAAP net income of\u00A0$4.6 million\u00A0in the second quarter of 2012.\r\n\tAdjusted EBITDA:\u00A0Adjusted EBITDA was\u00A0$16.2 million\u00A0for the third quarter of 2012 compared to\u00A0$58.1 million\u00A0for the third quarter of 2011 and\u00A0$65.3 million\u00A0in the second quarter of 2012.\r\n\tEPS:\u00A0Diluted EPS was\u00A0($0.07)\u00A0for the third quarter of 2012 compared to\u00A0$0.00\u00A0for the third quarter of 2011 and\u00A0($0.03)\u00A0for the second quarter of 2012.\r\n\tNon-GAAP EPS:\u00A0Non-GAAP EPS was\u00A0$0.00\u00A0for the third quarter of 2012 compared to\u00A0$0.04\u00A0for the third quarter of 2011 and\u00A0$0.01\u00A0for the second quarter of 2012.\r\n\tCash and cash flow:\u00A0As of\u00A0September 30, 2012, cash, cash equivalents and marketable securities were approximately\u00A0$1.6 billion, compared to\u00A0$926.3 million\u00A0as of\u00A0September 30, 2011\u00A0and approximately\u00A0$1.6 billion\u00A0as of\u00A0June 30, 2012. Cash flow from operations was$30.1 million\u00A0for the third quarter of 2012, compared to\u00A0$47.5 million\u00A0for the third quarter of 2011.\u00A0Free cash flow was\u00A0$16.7 million\u00A0for the third quarter of 2012 compared to\u00A0($17.6) million\u00A0for the third quarter of 2011.\r\n\r\n\r\nTop Image Credit:\u00A0Emmanuel Huybrechts"^^<http://www.w3.org/2001/XMLSchema#string>
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