Zynga’s Q2 was ugly this year. The company’s profits fell more than 90 per cent – not the stuff that makes updating your S-1 a pleasant affair. Well, the social gaming leader is set to go public in the next two weeks, and its Q3 results are now available. Again, it isn’t the kind of performance you want to talk about on aroadshow.
According to the LA Times, Zynga’s research and development costs surged 4X year over year, which meant that doubling revenue for the same period wasn’t enough to protect the company’s margins. For Q3 2011, Zynga’s top line reached $306.8 mn, and more than 150 mn people played its popular games. A year earlier, Zynga logged $170.7 mn in revenues.
Meanwhile, profits took a beating. Net income plunged 54 per cent year over year to $12.5 mn – down from $27.2 mn. The 54 per cent YOY decline is better than the 90 per cent plummet logged YOY for Q2, but it’s still far from positive.
Source: LA Times