Zynga shares wobble as biz bleeds $85.4m in Q1
Farmville HQ reports net loss despite revenue hike
Freshly public online gaming outfit Zynga reported a first quarter net loss of $85.4m to Wall Street yesterday.
The company, which has catapulted its sales off the back of Facebook, where it derives around 93 per cent of its revenue from the social network, had earnings of $17m in the same period a year earlier.
Revenue rocketed 32 per cent year-on-year to $321m – a figure that outshone analyst expectations. Sales were relatively flat compared with Zynga's fourth quarter, however.
The firm's recent purchase of OMGPOP – the startup behind gaming titles such as Draw Something – helped it beat Wall Street forecasts.
Shares in the company, which debuted on Nasdaq in March this year, have fallen nearly 40 per cent with analysts questioning the company's ability to bring in tons of cash in the long term.
Facebook, which is expected to IPO in the next few months, retains a fee of up to 30 per cent of the face value of user purchases in Zynga's games on its network. That deal is in place between the two outfits until May 2015.
Shares in Zynga dropped 8 cents to $9.34 in after-hours trading on Nasdaq. The stock had a price tag of $10 when the company floated in March this year. ®