Zynga set expectations extremely low, then it surpassed them. The beleaguered Facebook games company lost 7 cents a share on $316 million in revenue, versus its own recently revised forecast of losing 12 to 14 cents a share on $300 million to $305 million in revenue. In ZyngaVille that counted as a win.
Zynga also raised its end-of-year projections slightly and announced a $200 million stock repurchase plan.
Shares of Zynga shot up nearly 16 percent in after-hours trading just after the earnings announcement before later settling in a bit, up 13 percent.
Zynga broke even, meeting analyst expectations on an adjusted basis, which excludes a charge for overpaying for OMGPop. Zynga grew revenue 3 percent over last year, better than the decline analysts expected.
No one was expecting much. Less than three weeks ago, Zynga warned it was lowering its financial outlook, including the forecast for this quarter. And yesterday Zynga cut 150 staff, or around 5 percent of its workforce, in at least two satellite offices and announced it was discontinuing 13 games, including the four-month-old Sims-style game TheVille.
In a conference call with analysts, Zynga said its "bookings" -- sales of virtual goods to players -- were now 20 percent from mobile devices versus just 6 percent a year ago. "We have by far the biggest position in the West on mobile by daily active users and engagement," Pincus said.
Zynga has been struggling to retain casual gamers as Facebook users shift to mobile devices, where Zynga’s offerings are weak, and as Zynga’s games are filtered more aggressively from the Facebook news feed. Even with today’s after-hours bump, the stock is still down 71 percent over the last six months. Anticipating this, Zynga put what it hopes is an ace up its sleeve: A plan to launch an online gambling operation in the U.K.
"We see this as a first step into real money-gaming" Zynga CFO Dave Wehner said in a conference call with analysts, "toward what we think is a large opportunity for Zynga."
If all else fails, there's always wagering (and not the kind that involves buying Zynga shares).
