This page has been archived and commenting is disabled.

Zynga Files S-1: Summary Financials

Tyler Durden's picture




 

The much-awaited filing of the Farmville creator's $1 billion IPO can be found here.

Some highlights:

  • Q1 2011 revenue: $235.4MM, up from $100.9MM YoY, LTM revenue $731.9 MM
  • Q1 Net Income: $11.8MM up from $6.4MM YoY, LTM Net Income: $96.2MM
  • Q1 Adjusted EBITDA: $112.2MM, up from $93.5MM, LTM EBITDA: $411.4MM
  • Adjusted EBITDA definition also excludes stock based comp and change in deferred revenue
  • Cash: $995.6MM, almost the same size as the entire proposed IPO
  • Working Capital: $603.4MM

Quarterly financials:

The business model in a nutshell:

We are the world’s leading online social game developer with 232 million average MAUs in 166 countries. We have launched the most successful social games in the industry in each of the last three years and generated over $1.5 billion in cumulative bookings since our inception in 2007. Our games are accessible on Facebook, other social networks and mobile platforms to players worldwide, wherever and whenever they want. All of our games are free to play, and we generate revenue through the in-game sale of virtual goods and advertising.... In July 2010, we began migrating to Facebook Credits as the primary payment method for our games played through Facebook, and by April 2011, we had completed this migration. Facebook remits to us an amount equal to 70% of the face value of Facebook Credits purchased by our players for use in our games. We record bookings and recognize revenue net of amounts retained by Facebook.

In other words: people pay fiat created out of Bernanke's digital printer for fake fiat created out of a computer.

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 07/01/2011 - 12:34 | 1419247 RobotTrader
RobotTrader's picture

By the end of the summer when all the IPO's are rolled out....

The combined market cap of Facebook, Linkedin, Pandora, Zynga, Groupon, and Living Social will probably exceed the entire market cap of the XOM, or the top 5 companies in the XAU.

Who would have predicted that?

Fri, 07/01/2011 - 12:44 | 1419278 zeneta
zeneta's picture

It's interesting what people are spending their money on.

 

 

Fri, 07/01/2011 - 12:54 | 1419320 Dreadker
Dreadker's picture

lol agreed... I was told by a friend that i'm an idiot buying physical silver... until i pointed out he pays hundreds of dollars a year on his xbox live account... and his wife spends money on farmville etc.

But yeah... me swapping my fiat for physical makes me the idiot lol

Fri, 07/01/2011 - 13:21 | 1419451 Josh Randall
Josh Randall's picture

Idiots UNITE! I'm with ya Brother

Fri, 07/01/2011 - 15:01 | 1419762 What does it al...
What does it all mean's picture

Zynga is a bubble.  buy them and weep...

Fri, 07/01/2011 - 13:54 | 1419544 faustian bargain
faustian bargain's picture

Don't forget MySpace.

Fri, 07/01/2011 - 14:00 | 1419566 Overflow-admin
Overflow-admin's picture

Yeeeehaaaa let's all go play and save the world!

 

(and so much for the social networks bubble)

Fri, 07/01/2011 - 12:31 | 1419248 Deepskyy
Deepskyy's picture

So what's the O/U for this one to go from full retard to below IPO?

 

Considering the Holiday and other distractions... I give it 9 days.

 

Fri, 07/01/2011 - 12:40 | 1419282 n00b tube
n00b tube's picture

Just don't forget to BTFD. Less than 1,000 P/E is a value play.

Fri, 07/01/2011 - 13:14 | 1419434 NotApplicable
NotApplicable's picture

Zynga peddles digital crack. As long as they stay tied to CIABook, I don't see them failing to monetize the addicts. Of course, that doesn't mean they won't get hollowed out like any other listed company, but I'm guessing it's too valuable to screw it up just yet.

Fri, 07/01/2011 - 14:10 | 1419596 Panafrican Funk...
Panafrican Funktron Robot's picture

The one thing that may save it is that it actually generates a net income, which makes it signficantly better than any of the other internet IPO's so far.

That said, I'm not sure what exactly they can do with $1 billion dollars apart from having an amazing dividend.  Making additional games is pretty inexpensive given that the underlying compensation platform is already built.   

Fri, 07/01/2011 - 12:31 | 1419250 Jason T
Jason T's picture

OT:  The videos of the greek riots you may not have seen. 

http://www.youtube.com/watch?v=ZZSErxATVZA&feature=related

 

Fri, 07/01/2011 - 13:04 | 1419366 Tuco Benedicto ...
Tuco Benedicto Pacifico Juan Maria Ramirez's picture

Fast forward to riots in which the peasants are not unarmed.

 

Tuco Benedicto Pacifico Juan Maria Ramirez

Fri, 07/01/2011 - 12:37 | 1419256 pendragon
pendragon's picture

wonder how your risk basket is looking versus the ES...presumably it has diverged somewhat? does anyone have the composition weights of the basket??many thanks.

Fri, 07/01/2011 - 12:58 | 1419356 pendragon
pendragon's picture

ta

Fri, 07/01/2011 - 12:38 | 1419259 youngman
youngman's picture

Why does a game maker that is making money need to go public???? This is all greed...and why would anyone buy into them...is this our new manufacturing boom for the US....games to keep the sheeple occupied...

Fri, 07/01/2011 - 12:44 | 1419294 blunderdog
blunderdog's picture

Have to do it soon so the execs can take some money and run while the stock market is still being levitated so effectively.

One day, this manipulation could end, and then the opportunity will be gone.

Fri, 07/01/2011 - 12:53 | 1419336 Dreadker
Dreadker's picture

+1 lol

 

Agreed - the only people making money from these IPOs lately are the initial stock holders who founded the companies... If I had zynga stock options i'd be flogging them all on IPO day... sell sell sell!

Fri, 07/01/2011 - 13:11 | 1419419 blunderdog
blunderdog's picture

I regret to this day I missed the opportunity to rip a bunch of investors off back in '99/'00 back when I was an Internet thousandaire.

Damn Sarbane/Oxley passed literally 2 months before a planned IPO.  Had the S1 done and everything.

We all cried into our Zimas when we realized the party was over.

Fri, 07/01/2011 - 17:30 | 1420267 sdmodiano
sdmodiano's picture

The VC's want to get liquid.  The founders too...

Fri, 07/01/2011 - 12:53 | 1419311 Long-John-Silver
Long-John-Silver's picture

All our troubles will be over when they can hook us up to the Internet and nourish our bodies.

http://www.globalpov.com/images/Matrix-pods.jpg

Fri, 07/01/2011 - 13:03 | 1419360 ghostfaceinvestah
ghostfaceinvestah's picture

At least this company makes money and sells a product that has some barriers to entry.  The biggest risk facing games makers is keeping their products fresh.  But they can be successful.

Online coupon marketers who do nothing but distribute coupons from other businesses, however...

Fri, 07/01/2011 - 13:02 | 1419374 Tense INDIAN
Fri, 07/01/2011 - 13:07 | 1419394 RobotTrader
RobotTrader's picture

I wonder when Eric King is going to interview Mark Zuckerberg??

Or maybe he can interview the guys running SharePost, the grey market for pre-IPO deals which allow the insiders to cash out for vast fortunes before the IPO hits?

http://socialtimes.com/four-pre-ipo-companies-with-white-hot-valuations-...

 

Fri, 07/01/2011 - 13:15 | 1419420 RobotTrader
RobotTrader's picture

Google wants to buy Hulu....

No wonder the stock is rocketing.

http://www.marketwatch.com/story/google-in-talks-to-buy-hulu-la-times-20...

 

Fri, 07/01/2011 - 13:20 | 1419442 stormsailor
stormsailor's picture

i believe this is a cash out for the insiders.  farmville is a pop-culture fluke like the pet rock.  its popularity has plateaued and will slowly decrease.

 

however, that being said who can predict stock values now.

Fri, 07/01/2011 - 16:21 | 1419994 Use of Weapons
Use of Weapons's picture

+1/2

If you're not aware of the biz (I notice some people aren't aware of Farmville etc in here, so excuse the tutorial), Zynga is a fucking shark at monetizing & tying advertising revenue into its products... in many cases deliberately fraudulent advertisers ("sign up here for 400 tokens + new phone" or "sign up here for 400 tokens and CDs teaching you how to use computer" to paraphrase two of the largest scams tacked onto its product). They'll deny knowing that they're scams, but FB has been the Wild-wild-west of generating obscene profits for fuck all coding effort for a good time now - as a public company, they'll be forced to not take these dodgy bucks, which is your #1 warning sign that this is the cash out for the in-crowd (and cut for the usual suspects, GS / JP / etc) and a move onto the next big thing.

Ad revenue (as ever with "social media") is their major revenue, followed by user buy-ins - Matt Damon (yes, that one) recently tied his new water for Africa project into Farmville, raising $300k or so making a "blue water buffalo" that you could purchase into your farm. FB + Zynga are making $100's millions a year, and remember: FB gets a 30% cut of all 3rd party 'apps' running on FB, for doing nothing. Factor that into their IPO P&L (aka, if Google offers Zynga a better % cut, which they can afford to do, and are serious about google+, then there's nothing tying Zynga purely to FB) - then add in Mafia Wars & all the other 3rd party content [notice: when an autobanning bot recently started wiping out content, devs went ballistic; FB is looking at combating declining usages, and this was designed to combat spam; deleting at root content apps probably wasn't intended]. Recently there was serious interest in (re)investing into the next gen of MMOs - my advice was, sadly, FB users will pay more to click a cow, and a "WoW killer" can cost you $55 mil with no return, easily (hello, Vanguard). Said investor is likely to feature in this IPO - note that cash return was a secondary goal in their investment. (Full disclosure).

Zynga isn't a bet on Farmville, its a bet on a big shark being able to dominate the next social media revolution [tm] - and with no ethics (at all) holding them back from doing so (unlike mom&granny outfits like PopCap - which is getting eaten up http://news.cnet.com/8301-10797_3-20073523-235/popcap-games-snares-a-mys...).

Note to the wise: there's some major consolidation going on atm; Zynga is likely to maintain value, dependent on platform. Shares of Redwood City, Calif.-based Electronic Arts fell 73 cents, or 3.2 percent, to $21.81 in afternoon trading. In the past 52 weeks, the stock has traded between $14.06 and $24.79. When the market reacts to rumours of EA buying PopCap (which has an outstanding record for monetizing easy code & tapping into your mom's free time) and the major player is this volatile, I know that the suits haven't a clue.

 

tldr;

The product is specifically designed to be a) addictive, b) waste time and c) spur you into monetizing your addiction.

This was most famously parodied by "Click the Cow" http://www.bogost.com/blog/cow_clicker_1.shtml  > which, in turn, became a smash hit. And yes, you just. Click. An. Animated. Cow. Once. Every. Six. Hours.

 

Making money from monkeys pressing a button for their next 'incentivised' peanut is a no-brainer; the IPO is more than likely (ahem. *cough*) a buy-out of the original owners by larger & serious (more.. hmm... interested in control) players. Aka, it won't be allowed to fail.

 

 

 

p.s.

 

Terraria - 6 months to code, 3 people team, 400k+ units sold @ $10 a pop, take a look at how to do it. Comparing costs to the AA titles, it shows that "gamification" is a real theory - but mostly touted by people who /fail.

Fri, 07/01/2011 - 13:38 | 1419496 spekulatn
spekulatn's picture

What the **** is a farmville?

Fri, 07/01/2011 - 13:53 | 1419556 faustian bargain
faustian bargain's picture

it's pretty much nothing like being an actual farmer.

Fri, 07/01/2011 - 14:13 | 1419609 blunderdog
blunderdog's picture

It's an updated version of Minesweeper. 

It's an online "game" simple enough that you can "play" it while you chat about meaningless drivel on six different clients and send tweets and browse LOLCATZ and stream Hulu clips into your brain at the same time.

(I personally also believe it's the means by which the machine-takeover is going to identify the first wave of humans to be encapsulated into their new pod-homes.)

Fri, 07/01/2011 - 14:26 | 1419657 SheepDog-One
SheepDog-One's picture

And people think the DotCom era was the height of irrational exuberance....merely quaint slight overvaulation compared to this new full retard world.

Fri, 07/01/2011 - 16:18 | 1420061 Use of Weapons
Use of Weapons's picture

The game theory behind it is a whole lot smarter than that; delayed time incentives are part-n-parcel of any MMO / social media game these days. Steam "achievements" (yes, Timmy, you get a gold star too for finishing the race) are mostly this hidden behind a nice .jpg / name.

If you want to get cynical about this, the recent trend is for games that do not allow you to fail. Modern AA titles such as "CoD-Black Ops" are getting smart enough to adapt to the skill level of a player, and prevent them ever from dying. This is (if you understand anything about RL "why failing is good for you") potentially the most dangerous use of (proto) AI yet.

 

Death to videodrome! Long live the new flesh!

Fri, 07/01/2011 - 17:04 | 1420202 blunderdog
blunderdog's picture

You take it too seriously.  People voluntarily submit to this dumbening, and honestly, keeping those wretches out of the way by jacking them into entertainment podules is a reasonable approach to building a better society.

You can't *force* anyone to think or be free.

Fri, 07/01/2011 - 17:21 | 1420228 Use of Weapons
Use of Weapons's picture

Yes, you can.

It is a zero sum test: fail, and die - pass, and live. (usually by psychological direction, aka, subject terminates themselves after test due to inability to rationalise / emotionally deal with double bind + stress). Proponents like to believe that they act 'beyond detection', however, some subjects can recognise the process, which leads to issues over authenticity. Rarely subjects will game back (kikashi / myoushu).

 

It is rarely applied in non-specific circumstances, however, it is used.

Fri, 07/01/2011 - 18:01 | 1420316 3rdWorldAmerica
3rdWorldAmerica's picture

ZYNGA and the IPO proves the Average American is an Idiot!

C'mon people really?

Read a book, get a second job, spend some time learning something new for christ sake. Stop spending 20 hours a day on facebook wondering if one of your 500M friends likes their new mountain bike.

Stop wasting your night on the Bravo network with housewives of Atlanta or watching a bunch of millionaires play with a ball?? Their on strike, they want you to spend $1000 to take your family to the game. They deserve a piece of the owners profits just you do working your corporate job? How is your leverage - Would they get corporate jobs if there was a salary cap? Idiots with no education making $15M a year - because YOU value them at that price!

Read! Eat better! Workout, live within your means, stop wasting money, invest and stop paying attention to all these distractors which keep you from improving your career, life, relationship, family and standard of living. This is why it's all going to end BADLY!

 

 

Fri, 07/01/2011 - 18:34 | 1420355 Use of Weapons
Use of Weapons's picture

Intelligence and conditioning are two totally separate issues. To rephrase a cliche, Nazi commanders could appreciate classical music, enjoy ballet, care for their children, think about strategic and geopolitical impacts of warfare, and during their day job... slaughter (in many cases, personally execute) thousands of human beings.

So, it isn't as simple as you'd like.

Countless "intelligent" Americans go for gold aiming for that MBA from Harvard -- and it means nothing; in fact, accurate research has shown that a MBA, despite being the most costly Masters, is highest in a) lacking content, b) lacking real educational testing, since every institution with a MBA hikes the results up / annum to 'stay competitive' and c) users spend the least time of all students in class / studying.

 

Now, if you're a smart boy, try this:

http://www.cf.ac.uk/psych/home2/papers/sumner/2010/Boy_sumner_2010_CB.pdf

 

GABA levels & susceptibility to subconscious primers.

 

 

If you can read that, and understand it, then you're on the road. Note: if you understand it, you should be scared. Really, really, really fucking scared.

Fri, 07/01/2011 - 19:22 | 1420454 blunderdog
blunderdog's picture

Oh, please.  "Really, really, really fucking scared"?

A correlation between a specific neurotransmitter in a specific brain region's effects on a subliminal response should be super scary?  What the fuck, man?  You think there shouldn't be any data which correlates with these kinds of data points?

Some folks should stay away from science. 

Sat, 07/02/2011 - 15:57 | 1421446 Use of Weapons
Use of Weapons's picture

Hmm, did you mis-read the paper?

Specifically; the higher the GABA levels, the less susceptible to the effect of subconscious priming the subject was. (and only in one part of the cortex)

Now reverse that: the lower the GABA levels, the more susceptible to to the effect of subconscious priming the subject was.

Now go read the damn conclusion to the paper.

The paper claims this is leading to 'curing' schizophrenia, bi-polar etc. Sure, pharmatech can make great money of providing neutral levels of GABA, but... you know. I'm looking at all the products out there that lower GABA levels (high frutose corn syrup?), and I'm seeing more money in that. I'm imagining that insurance can determine your genetic 'predisposition' to high/low GABA levels, we can test kids @ 12 to see their levels to determine whether they're sheep or can be trained, whether the vast arrays of advertising will work on them or not (targeted social media, durrrr, its the grail)... The possibilities are endless.

 

Some folks should stay away from science + not being able to link it to the 'real world'.

 

tldr;

 

Do some decent due diligence into GABA, and why it isn't "just another neurotransmitter". It's the core to a whole slew of procedures (addiction, susceptibility to triggers, cognitive enhancers and so on) and is very exciting. But then again, have you ever considered taking Piracetam or other drugs? Because its a growth area... and there's a lot of money in it)

Fri, 07/01/2011 - 19:48 | 1420491 Contra_Man
Contra_Man's picture

Introducing the next paperless-based SDR (special drawing rights), QE8 styled share certificated monetary expansion allowing squids and friends to profit on the build up as a another form of a global currency reserve, and then to profit as this new SDR will be destroyed - also for the benefit of squids friends in low-backed chairs.  

So exciting is this.  A brand new, uncontrolled money laundering virtual global currency that can be manipulated to the nth degree; so back up the bus on this one.  Loader up... no, really... buy, buy, buy it if you can.

Fri, 07/01/2011 - 19:49 | 1420494 Contra_Man
Contra_Man's picture

Introducing the next paperless-based SDR (special drawing rights), QE8 styled share certificated monetary expansion allowing squids and friends to profit on the build up as a another form of a global currency reserve, and then to profit as this new SDR will be destroyed - also for the benefit of squids friends in low-backed chairs.  

So exciting is this.  A brand new, uncontrolled money laundering virtual global currency that can be manipulated to the nth degree; so back up the bus on this one.  Loader up... no, really... buy, buy, buy it if you can.

Fri, 07/01/2011 - 20:30 | 1420560 taca
taca's picture

All of our handbags are priced between wholesale fashion jewelry with a money back guarantee if you are not 100% satisfied with your purchase. We also offer you FREE UPS Ground shipping on all orders over

Sat, 07/02/2011 - 09:47 | 1421130 tradewithdave
tradewithdave's picture

There is a sweet irony in that the only thing more fragile and anti-social than the offering itself (online gaming and facebook credits) is the currency that the offering is priced in - U.S. dollars.

Sandberg better be the new SecTreas because it is the only hope of protecting the social media monopoly (i.e. Facebook) from being ravaged by Bitcoin which bridges the real and virtual worlds while not violating legal tender laws.

Facebook does not exhibit the same characteristics of value perceptions in the human consciousness that PGP level encryption does when human nature exhibits a natural tendency towards self-preservation of which personal privacy is a cornerstone that is rising in significance.

Dave Harrison
www.tradewithdave.com

Sat, 07/02/2011 - 15:39 | 1421451 Use of Weapons
Use of Weapons's picture

You might want to factor in BitCoin being hacked to death in recent weeks, and two (now three) market sites being totally ravaged by haX0rs.

 

Or did you miss that?

Sat, 07/02/2011 - 21:09 | 1421871 tradewithdave
tradewithdave's picture

A bank was robbed this week too.

Do NOT follow this link or you will be banned from the site!